For your credit union, it's important to acknowledge that "asset growth" and "increasing assets" are two different goals. A generalized growth in assets looks good in the short-term, yes. But sustainable asset growth requires a solid strategy. Let's explore five impactful strategies to enhance your capability for asset growth.
1. Focus on Membership Growth
The most active credit unions also tend to be among the strongest lenders. They not only issue more loans but also maintain a higher number of loans per member.
This doesn't mean that they have lower loan rates or larger offerings, though. They increase efficiency to improve the quality of the member experience, which brings in more members, and therefore contributes to loan/asset growth overall.
2. Prioritize Member Engagement
Deepening engagement with current members is also a way to attract new ones, which helps bring about the asset growth described above.
The most successful credit unions tend to be the ones that make bigger investments in digital capabilities. Even something as simple as accepting online applications for memberships helps inspire growth, along with inherently engaging capabilities like mobile banking, online bill pay, and more.
The more value you offer to someone's life, the happier and more engaged they are. This drives membership growth, which drives asset growth.
3. Increase Your Relevancy to Niche Markets
Credit unions are inherently relationship-based. To build the strongest relationship possible, be hyper-relevant to your target audience. That's why you need to target not the largest possible audience you can, but niche markets.
Offering products and services that are relevant to your core audience increases membership growth, which ultimately correlates to higher rates of not just loans but also core deposits and non-interest income growth as well.
4. Embrace Being a Relationship-Based Financial Service Provider
A relationship-based credit union strategy is one that allows you to offer a wider array of specific products and services to members based on what you know about them. This helps to strengthen customer loyalty.
The ripple effect is that the more loyal someone is, the more engaged they are. As engagement increases, membership growth does as well.
This can also lead to a situation where higher fees are acceptable because members are willing to pay more for an experience they can't get from bigger banks. They see the value they are getting in return.
To find out more information, be sure to view FLEX's helpful Relationship Pricing Guide.
5. Expand Your Digital Capabilities
One recent study revealed that the top quartile of credit unions was 20% more likely to accept online applications for membership than those at the bottom.
Part of this has to do with the fact that members increasingly want digital services. Digital transformation also helps to embrace automation wherever possible, like through the loan issuance process. This leads to greater operational efficiency and more opportunity for growth as well.
Features that would expand digital capabilities and promote digital lending and credit union loan growth include but are not limited to ones like:
- Mobile banking.
- eSignatures.
- Online Account Opening.
- Remote Deposit Capture.
- Remote Control Cards.
- eStatements.
- Mobile Lending.
Digital Lending: A Cornerstone for Credit Union Growth
At FLEX, we believe that embracing digital lending solutions is one of the key parts of any credit union asset growth strategy. We've recently authored a comprehensive guide that goes into more detail about this, which you can download by clicking the button below.
