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BROOKFIELD, Wis.-This is the year in which if credit unions are to grow, they will need to find that growth internally, predicts Fiserv, which recommends stronger data-mining and relationship-building tools to get the job done.

To that end, Naseer Nasim, EVP segment executive, said credit unions must closely evaluate their membership base. "With the challenges credit unions face, like Reg E and the new debit interchange rules, they must examine their entire membership portfolio and determine which segments are profitable, unprofitable, and those in middle they can turn into profitable."

Nasim said not only must CUs evaluate their membership, but the opportunities for revenue expansion with a segment and the associated costs of doing so. After determining the opportunity, CUs need tools to build stronger relationships, such as Fiserv's software solutions that allow the entire member relationship-along with notes from interactions with members-to appear on one screen for tellers and MSRs.

"All of a sudden the relationship between the credit union and the member becomes warmer," Nasim suggested. "Members see the credit union as friendlier, that they understand their needs, and staff are more equipped to recommend products to improve members' financial lives."

Despite the new threat to interchange revenue and costs for rewards programs likely coming under greater scrutiny, Nasim believes debit reward programs can play a role in driving deeper relationships, noting software is available that helps CUs customize rewards programs to improve profitability and member behavior. "Through rewards programs if you modify behavior to increase debit activity, you can not only add revenue but you can turn unprofitable members into profitable ones," he said.

Nasim emphasized Fiserv's UChoose Rewards can be effective today because the software allows the credit union to analyze its card base to determine the proper mix of rewards-either merchant funded, CU funded, or a combination of both. "UChoose lets the credit union find out which type of reward program will be the best to modify the buying behaviors of their members."

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