The Top 5 Crutches that Create Performance Disparities Between Large and Small Credit Unions
Many Small credit unions are fighting an uphill battle to compete in the financial marketplace and to gain a better foothold. With recent numbers illustrating their decline in membership, assets and loan growth, it seems small credit unions have a blurry future. However, with an estimated 70% (4000/5684) of total operational credit unions classified as small (having under $100M in assets,) they represent a huge portion of the industry, and their struggles shouldn’t be easily dismissed.
The chart below from the NCUA Annual Report illustrates the decline credit unions by assets class between the years of 2010-2017.
1. Technology: Some credit unions lack the ability to offer the latest and greatest technology to their members. They either don't have the R&D department in-house or can't afford the cost of integrating third parties with their core system. However, choosing a core technology system with open architecture which allows for third-party integration can help to stay competitive while reducing cost. It can also provide credit union efficiencies like automated loan approvals, streamlined instant issue for cards and robust compliance tools.
2. Skilled Employees: Having a smaller staff goes hand in hand with a smaller credit union. The volume of work is there but the budget likely won't justify the hiring of additional employees. This means that much is required of the employees you do have but it also means they need to maximize the use of their time. Technology can be one of the best ways to automate processes and become more efficient. Take the time to learn what your current technology is capable of. Many times you will be surprised at how many features exist that are not being utilized.
5. Marketing: Most smaller credit unions having limited working capital, and by default marketing and new membership development have to take a backseat. However, there are many free services that can propel your marketing forward. For example, Mailchimp provides free email services for 2,000 subscribers and 12,000 emails per month, pexels.com provides free stock photos and pixlr.com provides a free and robust photo editing platform. Leveraging some free and open source services will allow for some funds to be directed towards generating new business, new members and growth in assets and membership.