SAN DIEGO-One company that has insights into what credit unions and banks are planning for 2012 said the former had better prepare for even more formidable competition from the latter.
Ted Bilke, president of Symitar, said that at the same time Symitar is getting a glimpse at how many of its CU customers are planning for the future, it's also (through its parent, Jack Henry Co.) getting a look at bank strategies, as well. "What we are seeing is that community banks are going to be bigger credit union competitors in the next two to three years. They are doing the things to get themselves efficient, and they are redirecting activities to the more traditional retail type of products that are the core of where credit unions focus."
What Symitar believes will play big roles in improving credit union efficiency ratios and ROI are Check 21 and remote-deposit-capture-type solutions that attract business relationships, which have been moved to a higher priority among CUs, Bilke explained.
"We have seen increased discussions about moving more aggressively into commercial lending. Credit unions feel they have to diversify their loan portfolio and they see the opportunity to get some fairly sizeable dollars loaned out on a fewer number of transactions than what they traditionally see in the retail space. We are seeing much more of this from our customers, who are also adding more business services."
Other Trends
Other trends Symitar is seeing pop up in CU planning sessions: To save money, credit unions are turning to other credit unions to become each other's disaster recovery sites, while seeking to address margin decline credit unions are discussing holding more first mortgages.
"Six months ago credit unions were saying we won't hold anything because of the rate risk," Bilke said. "But now we are starting to hear them say they are holding some of these loans because they have to get a spread going."
