How To Use Shift In Market To Become Primary Financial Hub
The history of the finance industry has been punctuated with ups and downs, with many of the "downs" providing the impetus for strong organizations to rise to the top. During the recession in 2000, 40% organizations that had been top performers fell out of that bracket, leaving a huge void for new organizations to fill.
The banking landscape continues to undergo extraordinary change, with financial institutions enduring heavy scrutiny and being forced to cost-cut strategic operations in order to simply survive a prolonged downturn. Hiding on defense is a mistake. When organizations hibernate, they risk being replaced by competitors that have chosen to proactively position themselves for growth once conditions improve.
From our perspective, this recession is a perfect storm of opportunity for credit unions equipped to help members both in-person and online. How? Tap into underserved markets. At minimum, CUs should already be offering basic online banking functionality to support members. But in an ideal world, credit unions would use this shift in the market landscape to position themselves as the primary online financial hub for their members. For consumers, this means creating a single sign-in destination where they can see and act on a clear, full picture of their financial health, from their spending habits to what bills are coming up and how much they can afford to pay.
For small businesses, this means providing easy to use solutions for managing payroll, invoicing, taxes, and payments. Small businesses are in dire need of attention from financial institutions. Currently, small business owners are owed approximately $33 billion in overdue payments, and they're revolving approximately $150 billion on their credit cards to run their business because they can't get the loans they need.
Do these things and members will begin to look to their credit unions for personalized recommendations regarding products and services. Relationship banking is the secret to future growth. After all, few trusted advisors are as well equipped as credit unions to leverage a wealth of data to provide members an informed, relevant purchasing experience.
But first, CUs need to position themselves for long-term success by making the explicit decision to play offense in this new economic norm. Invest in your members, and they will return the favor.