MADISON, Wis.-The cost-effectiveness of the traditional CU commitment to face-to-face service in the age of low-cost delivery channels is being questioned in a new report.
The report from the Filene Research Institute, "Balancing Member Service with Organization Efficiency" does not suggest members or prospective membes should be turned away or that fees need to be raised, but instead, urges credit unions as cooperatives to "constantly strive to minimize operating expenses in order to return more economic value" to members.
Among the proposed recommendations are measuring account maintenance costs, including core system costs, transaction costs and the cost of staff downtime, in addition to tracking. The report was authored by Joseph Prunty, CEO of CorePROFIT Solutions.
The study, which is based on a four-year analysis of member income contributions among 95 credit unions, found 20% of members are responsible for 150% of net income. On the flip side, a majority of members (80%) are a drag on net income. The highest cost comes in providing in-person service, the Filene report states.
For info: www.filene.org.
