In 2008, the bottom fell out of the economy. The Great Recession devastated world financial markets, the banking industry and real estate. During this time of great economic upheaval, CUNA Mutual Group launched what would become a series of informational presentations to raise thought-provoking questions and share strategic insights to help inform Credit Unions\u2019(CU) strategies for surviving the recession and thriving beyond. Some of the topics explored included \u201cWhy the Credit Union System is Needed Now More Than Ever\u201d and \u201cBattle for the American Consumer\u201d. As a member of the team that produced and delivered these early thought leadership presentations, I conducted much of the secondary research on these topics and helped create this content.\u00a0<\/p>\n
Fast forward 13-years. The COVID-19 global pandemic ushered in a new worldwide recession. And I now lead CUNA Mutual\u2019s annual thought leadership research effort to help inform CU strategies.<\/p>\n
According to research cited in CUNA Mutual Group\u2019s newest study titled, \u201cMaking Strategic Choices for Growth,\u201d the CU value proposition is under attack as evidenced by:<\/p>\n
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- Three in five CUs with total assets of less than $1 billion lost members between 2017 and 2020.<\/li>\n
- Credit Union\u2019s share of total Primary Financial Institution relationships declined from 21% in 2018 to 12% in 2020.<\/li>\n
- Credit Union\u2019s market share for certain loan classes has declined in recent years. For example, CUs\u2019 share of total new and used vehicle financing declined from 22.7% in Q2 2018 to 18.2% in Q2 2021 according to Experian.<\/li>\n<\/ul>\n
It\u2019s enough to make you feel like the sky is falling! And when you feel like the sky is falling the last thing you want to do is look up. But\u2019s that exactly what you should do. You should look up and learn from those (in this case CUs) that are successful. Fortunately, CUNA Mutual\u2019s research this year explored the strategic choices of these top-performing CUs. Based on top performers\u2019 strategic choices, you may want to consider these three strategic do\u2019s and don\u2019ts.<\/p>\n
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- DON\u2019T assume member service is a competitive advantage; validate it<\/strong><\/li>\n<\/ol>\n
Forty-one percent of CU executives with more than $250-million on their balance sheets list member service as one of their top three competitive advantages. However, CUs lagged banks on the courtesy and helpfulness of staff – 84 versus 85 points \u2013 according to the 2020 American Customer Satisfaction Index (ACSI). They were also on par with banks in terms of call center satisfaction with both at 79.\u00a0 Credit Unions\u2019 scores for these two service-related metrics have declined in recent years. If CU leaders believe their institution leads competitors on service, the ACSI results suggest that it may be prudent to validate this belief through a survey comparing members\u2019 and competitors\u2019 customers\u2019 ratings of service.<\/p>\n
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- DO consider what metrics matter to your Credit Union <\/strong><\/li>\n<\/ol>\n
Through this year\u2019s research, we learned that the strategic choices of loan growth, membership growth and Return on Assets, differed in important ways. Credit Unions seeking to learn from top performing CUs may want to consider which metric matters most. For example, many CUs are de-emphasizing branches and dedicating more resources to expanding their digital offerings like digital auto loans and mortgages. However, if your CU is focused on membership growth, you may not want to move away from branches just yet. Membership growth leaders are more likely to say branches will be a top-three distribution channel in 2022. CUs focused on membership growth still view branches as being mission-critical.<\/p>\n
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- DO Focus on organizational culture and internal alignment<\/strong><\/li>\n<\/ol>\n
Our survey found that organizational culture, i.e., a credit union\u2019s core values, norms [e.g., how employees act \/ behave when no one is looking], accountability systems, talent management, etc., was cited by only one-in-three CUs surveyed as a top-three source of competitive advantage. However, the critical importance of culture is more likely to be recognized by top-performing CUs. A majority of these CUs agree that:<\/p>\n
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- Their leadership team fosters a positive culture that helps them differentiate in the marketplace.<\/li>\n
- Leaders and employees at their credit union are aligned on their strategy and how it will be executed.<\/li>\n<\/ul>\n
As our research has shown, top performers\u2019 answers to the \u201cPlaying to Win\u201d questions differ in important ways from other credit unions.\u00a0 However, making the right choices might not be enough.\u00a0 Having a performance culture and ensuring leadership and frontline staff are rowing their proverbial boat in the same direction help ensure a CU\u2019s strategic choices are successful.<\/p>\n
These were just some of the insights found in this year\u2019s thought leadership study, \u201cMaking Strategic Choices for Growth.\u201d CUNA Mutual provides its annual thought leadership research to help inform credit unions\u2019 strategic discussions and planning to ensure a vital, thriving credit union system for years to come. \u00a0You can learn more about this year\u2019s findings by visiting our landing page<\/a>.<\/p>\n
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[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n ","protected":false},"excerpt":{"rendered":"
[et_pb_section fb_built=”1″ _builder_version=”4.9.4″ _module_preset=”default” custom_padding=”0px|||||”][et_pb_row _builder_version=”4.9.4″ _module_preset=”default” custom_padding=”0px|||||”][et_pb_column type=”4_4″ _builder_version=”4.9.4″ _module_preset=”default”][et_pb_text _builder_version=”4.9.4″ _module_preset=”default”] By: Steve Heusuk, CUNA Mutual Group\u2019s Sr. Manager, Customer Intelligence In 2008, the bottom fell out of the economy. The Great Recession devastated world financial markets, the banking industry and real estate. During this time of great economic upheaval, CUNA Mutual Group […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.ncultheaffiliate.com\/index.php?rest_route=\/wp\/v2\/posts\/3845"}],"collection":[{"href":"https:\/\/www.ncultheaffiliate.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ncultheaffiliate.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ncultheaffiliate.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ncultheaffiliate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3845"}],"version-history":[{"count":0,"href":"https:\/\/www.ncultheaffiliate.com\/index.php?rest_route=\/wp\/v2\/posts\/3845\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ncultheaffiliate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3845"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ncultheaffiliate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3845"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ncultheaffiliate.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3845"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- DO Focus on organizational culture and internal alignment<\/strong><\/li>\n<\/ol>\n
- DO consider what metrics matter to your Credit Union <\/strong><\/li>\n<\/ol>\n
- DON\u2019T assume member service is a competitive advantage; validate it<\/strong><\/li>\n<\/ol>\n