LAS VEGAS — At the end of the day it's often the measure of success-the bottom line, and it can be a challenging metric for a financial institution to manage in today's economy. Looking for advice on how to pump up results here?
The credit union community has stepped up with suggestions ranging from beefing up the mortgage effort, to tapping employees for business-building tips. Read on:
1. Mortgages Still Best Method
Faced with declining debit interchange revenue and rock-bottom auto loan rates that return little margin, credit unions' best lever to pull to drive the bottom line is still mortgages, said Bob Dorsa, president of the Las Vegas-based American Credit Union Mortgage Association. Despite mortgage activity declining, credit unions need to be more aggressive with the product, he said.
"If the credit union is not focusing on real estate I'm really not sure what its next best option is," said Dorsa, who urged credit unions to attract more loans and add the ability to handle the increase. "They get this done by hiring some of the thousands of mortgage professionals banks are laying off and aligning themselves with a third party to bring in more loans."
2. Efficiency Drives Growth
A streamlined business model does the trick for the $8.2 billion Alliant FCU, which reaches nearly 300,000 members nationwide with only 14 offices. "We look a lot more like a direct bank than a traditional branch-based financial institution," said CEO David Mooney. "At our branches we don't have any cash operations and a very limited transaction set. Most members access us remotely-online, mobile-we are very efficient."
As a result, the Chicago-based CU boasts an expenses-to-asset ratio that's near 1%, which allows it to offer low loan rates and high deposit rates, including a 70-basis-points savings account. "The approach has attracted a great deal of high-wealth members who prefer deep relationships," added Mooney.
3. Staff Pave The Way
No better place to start for business-boosting strategies than the staff. The $1.5 billion State Department FCU in Alexandria, Va., has initiated an extensive outreach program that pulls ideas from across the organization's operational areas.
Veronica Trotta, director of mortgages and loan administration, said the approach began mid-year and has already produced four companywide growth initiatives. "We have turned to our staff and asked what we can do better for our members and the credit union. We have some great ideas that are helping us generate more loans and reduce our expenses."
4. Leverage HARP While It's Still Here
With the possibility that the Home Affordable Refinance Program (HARP) could expire at the end of this year, and while interest rates are still low, the $11.5 billion BECU in Tukwila, Wash., has identified more than 3,200 members, based upon their current interest rate and HARP qualifications, who may benefit from the program.
"We have reached out to these members with a direct mail campaign and are in the process of calling each member to review their individual situation," said Todd Pietzsch, manager of public relations. "Our goal is to save the members money while also increasing mortgage originations for the credit union."
5. This CU Is Having A 'Blast'
XCEL FCU points out that driving the bottom line includes protecting it. Director of Marketing Tom Quigley said the $150 million Bloomfield, N.J.-based credit union has done a good job of that this year by making a big shift in its direct marketing. Instead of using direct mail, the CU now leverages frequent e-mail blasts.
"The cost is nearly 75% lower and the results are instant," said Quigley. "Literally, within five minutes of blasting the phones start ringing. We use a company in California to professionally design and send our e-mail blasts, and track the opt-outs. It's been so successful and reasonable that we send out about seven a month."
MORE@CUJOURNAL.COM
Subscribers can read related stories by going to www.cujournal.com and typing the following headlines into the search function:
How Micro-Lending Is BoostingThe Bottom Line
How To Get The Most Out Of Your Less Profitable Members
"Out-of-the-Box" Revenue Sources Drive Credit Union's Bottom Line
