Building Bottom Lines

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PLEASANTON, Calif.-With shrinking capital a concern for many credit unions, growth opportunities should also drive greater efficiency to preserve the bottom line, stressed Sam Kilmer.

The VP of market development for Harland Financial Solutions believes that in 2011 credit unions' best bet is to leverage online channels to deepen existing relationships and reach new member segments, as well as save money. "Generally, many credit unions have used self-service channels to provide members with more value and differentiate," noted Kilmer. "Those are legitimate uses, but not approaches to self-service that reduce expenses."

Kilmer contended that more credit unions must utilize online channels for account opening and mobile banking. He cited the dramatic growth of the $41-million Arkansas Employees FCU, Little Rock, Ark., which may double assets in three years and not add a single employee thanks to Internet and mobile banking.

The $9.1-billion BECU, Tukwila, Wash., opened 3,000 new memberships, and grabbed over $5 million in deposits and $6 million in credit in nine months without any additional marketing or advertising. "They did it through online account opening and funding," Kilmer noted.

Business lending and business services, too, present significant growth opportunities in 2011, offered Kilmer, who said the focus can also boost member retention.

"Giving members their first business loan and providing them with the business services they need leads to greater share of wallet-across the credit union's entire product line," said Kilmer.

"This gives you a much more committed member who is now likely to stay with you. Our own experience and studies have shown that as credit unions move toward best practices in retaining members, they can move their growth rate up a couple percentage points and never change their new member acquisition rate," Kilmer suggested. "By keeping more members they don't have to get as many new ones and don't spend a lot of money on new member acquisition."

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