RANCHO CUCAMONGA, Calif.-From scrutinizing contracts, to increasing transaction revenue, or sparking collaboration, Stan Hollen realizes that CEOs have to do all of the above-and more-to prop up the bottom line.
The CEO of CO-Op Financial Services has seen a significant increase in the number of credit union RFPs coming across his desk-a sure sign that credit unions are paying close attention to what they pay vendors.
"When you have 1% to 1.5% ROA or better there is not much pressure to look at expenses," Hollen said. "Certainly, now, many credit unions are challenging expenses from a zero-based budget. They're asking 'Why are we spending this money and do we need to replace this headcount after someone leaves.'"
What's also critical is collaboration, said Hollen, who is in charge of the largest shared branch network in the country. "This is a great way for credit unions to reduce costs and still offer convenience."
On the revenue side, Hollen suggested that credit unions need to bring in more checking accounts and promote debit. "On the interchange issue we are looking at how many gateways a credit union has on their card. Sometimes we see credit unions with three or four. It is a good idea to look at which ones they really get the best deal through and perhaps drop one or two so they have better control of the routing, as opposed to leaving that in the merchant's hands. The larger merchants will always take the less expensive gateway and that is always not best for the credit union."
