MADISON, Wis. -
CUNA reported that its 2008 Credit Union Environmental Scan (E-Scan), which it recommends for strategic planning sessions, budgeting, product development and more, found in a survey of CUs that growth challenges of all types are atop the radar at CUs. According to CUNA, the top insights are:
1. Membership growth. Since 2000, average annual membership growth has been 1.9%, and similar growth is expected for the next few years.
2. Older members. "Credit unions are in the midst of a major decline in the number of peak borrowers-members age 25 to 44." A shift that has been working against CU lending for some seven years and will continue through 2010.
3. Loan growth. After double-digit loan growth in five of the past seven years, credit union loan growth is expected to drop to 6%. Rising interest rates, an increase in member savings, and weak pent-up loan demand are contributing factors.
4. Innovation. "Innovation will be one of the key drivers of value and differentiation in the new financial-services economy."
5. New IT architectures. "Your IT architecture is the foundation of your core lending system. Many credit unions, however, continue to rely on aging platforms."
6. Earnings. Credit union financial performance will be under pressure from many fronts: a weak housing market, lower home prices, a flat yield curve, intense competition, a slowing economy, lower loan demand, and deteriorating credit quality.
7. Payment systems. "The most significant trend over the past five years has been the rapid growth of electronic payments-debit cards, credit cards, and ACH transactions."
8. Security. IT departments spent roughly $61 billion on security in 2006, but the high cost of protection appears to be worth it-surveys show that 50% of consumers would switch service providers if their personal information were to be compromised.
9. Business lending. The number of CUs offering business services to their members is approaching 2,000. Many credit unions are well-positioned to earn the loyalties of the business owners within their fields of membership because 52% of small-business owners are less than "very satisfied" with their current business-banking relationships.
10. Legislation/regulation. Banking interests have pulled back on taxation and are attacking CUs on their record of community service in an effort to impose regulations such as the Community Reinvestment Act on credit unions.
"More than half (54%) of the nation's adult nonmembers-or about 78 million consumers- say they're eligible to join a credit union but haven't done so," said Jon Haller, director of research for CUNA's Center for Research and Advice. "To develop strategies for reaching these folks, your credit union must first study its field of membership to discern its demographic characteristics, familiarity with credit unions, loyalty, and use of delivery channels and loan services."
The E-Scan is now available in three different formats-report, PowerPoint presentation, and DVD that can be used in any credit union's strategic planning.
For info: advice.cuna.org or 800-356-8010.
