As technological advancements bring more channels, customization and convenience to financial services, new providers continue to enter the marketplace to capture consumers’ attention and patronage.
Member loyalty and service will always be top priorities for credit unions. But in 2019, look for organizations to also focus on a return-to-basics approach to building memberships and stability, starting with a renewed focus on increased deposits. Here are four growth strategies to watch:
1. Increasing Deposits in a Rising Rate Environment
Deposit acquisition hasn’t been a focus for the credit union industry in over a decade, but that seems to be changing in 2019. A rising rate environment, combined with the increasing risk associated with retirements of the baby boomers, is shining a light on the need to attract and retain deposits cost-effectively. Competition on the lending side has kept many credit unions from raising asset yields, and they’ll have significant margin degradation if cost of funds continues to rise in 2019.
Increasing deposits is a clear enough goal, but the banking environment has changed considerably in the past 10 years. One obstacle credit unions could face is that many employees haven’t worked in this type of environment before and lack collective experience. New technologies, channels and competitors have changed the playing field, and credit unions will have to work hard for every dollar deposited.
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