LAS VEGAS-For credit unions looking to grow in 2013, one expert says they need to do more listening.
Dr. Brandi Stankovic, partner at Las Vegas-based credit union consultancy Mitchell, Stankovic & Associates, suggested CUs allow members to voice how they would like to see the relationship with their credit union.
"We cannot assume that we understand members unless we engage in dialogue," she said, adding mobile, social media, online banking and branches all are components of the member experience. "We have a program, 'I AM a Credit Union,' that has focused on capturing this member story. This allows credit unions to fine-tune their business strategy around their membership story, while creating a custom credit union experience."
Stankovic told Credit Union Journal member storytelling is one part of what she sees as a "holistic approach" to the CU/member relationship, which she said leads to opportunities.
"Many credit unions are taking a look at the entire member relationship," she said. "If they use MCIF system reports and walletshare analysis they can focus on more organic growth. That way, the credit union is cross-selling products and services based upon the whole relationship. We call it 'Mine and Build,' which allows credit unions to understand their members and proactively make offers for loans."
This holistic/relationship-based approach is necessary today, she continued, because the marketplace is changing. No longer is one traditional standby an automatic get for CUs: the auto loan.
"It is difficult to compete with 0% financing," she observed. "But loan growth remains the biggest opportunity."
Debit Is King
While some CUs have sought to limit growth in recent years for a variety of reasons, Stankovic cautioned "shrink to profitability" is not necessarily a strategy. She reminded credit unions cannot just cut expenses to achieve profitability; they must grow revenue. Among Stankovic's recommendations for doing so:
- Debit cards are being used for everything as some members never carry cash. Re-examine the business model to make the debit card the core product. Instead of focusing on checking, focus on the transactions generated by debit cards.
- Debit can be linked to mobile or online touchpoints, which members use to ask questions, then cross-sell. Use MCIF to examine usage patterns and time frames to tailor offerings.
- Not a lot of credit unions capitalize on their analytics, she assessed. Some don't have substantial back-office operations or a separate e-services department, but there are a lot of companies that help with making sense of member data.
- Some CUs have held out on any fee examination. While raising all fees is not recommended, Stankovic suggested focusing on member behavior modification or fees for extended services, including offering notary services.
- Stop excessive fee waivers. Stankovic said some credit unions waive the majority of fees. "We suggest an examination of internal procedures in cases where a member might be getting a fee over and over."
- Implement loan recapture programs. CUNA Mutual, for example, offers an auto loan recapture program that targets members with existing loans.
- Increase emphasis on student loans. Stankovic sees cooperative efforts to share the risk of student loans while strengthening the member relationship.