BOSTON Many credit unions and vendors have built sophisticated metrics around various numbers inside credit unions, but one area not being measured well is payments, according to one person.
“There is not a clear view within the credit union as to how the credit union is making money from payments,” Sam Kilmer of Cornerstone Advisors told NAFCU’s annual meeting here. “You have a clear sense of loans and deposits, but the payments piece is all over the map. We are encouraging our CU clients to at least get a sense, a P&L if you will, for payments in the same way you do other areas of the credit union. If planning to launch a new payments solution, get a sense of what the income needs to be to pay for that. More and more of you are going to outside providers for these services, such as bill pay and P2P, which means as your adoption rates go up your expenses go up.”
Among the metrics Kilmer would like to see every CU measuring are debit cards as a percentage of personal checking accounts; bill pay (active users as a percentage of total enrolled “At the typical CU half of the bill pay users are not even using it. This is important because you are paying for how many people are enrolled”); fee income per retail checking account/year; and mobile banking active users as a percentage of checking accounts.
“What we tend to hear is that mobile is good because of retention. My two questions are, do you know how many are using it and do you know if your retention rate is getting better? You do know the costs are going to happen, but do you know where you stand with these other two?”
