SCOTTSDALE, Ariz.-Strategic planning for 2010 is all about understanding which products are profitable and which ones are not.
"Credit unions need to understand this," counseled Mike Kohl, CEO of Kohl Advisory Group. "They have been laid back over time and fall back on their not-for-profit status too often."
Kohl contends CUs rely too much on CDs and not enough on less expensive products, like checking accounts. "Checking accounts become your least expensive source of funds and are the most core because of the non-interest income if they are properly priced."
With loans, if the CU knows which offerings are most lucrative, it can be "more aggressive on those products," suggested Kohl. Kohl insisted CUs must be aggressive in the market and capitalize on the banks' problems-despite suffering setbacks from the corporate bailout. "Credit unions may be shell-shocked from the NCUA situation, but they need to get off the mat because they are much better capitalized than banks," Kohl said. "This may be a once-in-a-lifetime opportunity."
Kohl suggested CUs must look into tools and resources beyond simple software solutions to determine cost and profitability of products.
For info: www.kohlag.com
