There have been alarming stats of late that indicate a significant uphill battle smaller credit unions face in today's market. The NCUA classifies small credit unions as those with less than $100 million in assets, and more than 4,000 of the 5684 credit unions in the United States fall into that category. While the overall credit union industry is improving, the data for small credit unions doesn't look good, with assets and member size shrinking. More than 215 credit unions classified as small closed their doors in 2017, with average membership rates declining 4-8%. If you find yourself in this category and are witnessing similar trends, here are 5 survival tips to consider:
- Merge or Be Merged. If it hasn't happened already, others will be asking you to merge. Define a strategy for incoming offers and consider a strategy for making offers. Encourage board members to keep an open mind and try to get everyone on the same, or at least remotely similar page, so that when an offer is presented you are not too late to the punch as you fight internal battles.
- Underestimating the Competition. Banks and larger Credit Unions have historically been your main competition but don't overlook digital players making headway in your communities and nationwide. From mortgage lending options such as RocketMortgage, to peer-to-peer payment apps making larger advances in fintech with debit card options (See: Are P2P Payments Slowly Overtaking the Financial Services World?), these competitors are only going to grow in scope. Prepare a response and look to your technology partners to incorporate emerging digital technologies your members expect. Leading us to our next point...
- Don't Forget Tech. The tech vendors that your CU partners with should have similar goals of growth and have a strong development roadmap. The core space is saturated with complacent vendors who assume clients will stay because it's too difficult for a credit union to convert to a new platform. These types of providers likely have little focus on future development of their own core and are unwilling to open up their platform for third-party integrations.
- America's Got Talent. A strong economy means a greater struggle to find and keep good talent. The United States is currently experiencing the lowest unemployment rate in this century at 3.8% as of May 2018. High turnover and the associated costs of training new employees is not what small credit unions need right now. Touch base with employees and spend a little extra to make the good ones feel appreciated.
- Boost your Board. The culture of a credit union begins with leadership but lasts through board member belief. Embrace the experience and knowledge the wiser members of your board bring but don't neglect to seek out young board members that understand and use digital technology. They will help reinforce the needs of members their age.
Check out two case studies of small credit unions that have found a way to survive and compete. 
