5 takeaways for credit union growth in FY2023

I’ve spent the last year talking to scores of credit union leaders. What’s quickly become clear is that many credit unions are well-positioned for growth—even if they don’t realize it.

The path for credit unions to build revenue and serve our communities starts with listening and nimbly responding to members’ needs. Most importantly, it’s answering the calls of small- and mid-sized businesses (SMBs) that are the backbone of our economy.

While there is work to do, many credit unions are sitting on some big advantages. Let’s examine the top five insights I’ve gathered from listening to financial professionals across the U.S.

  1. The Old Vendor Relationship Model Is History

In a digital world, it’s important to distinguish vendors from partners. Vendors can expand capabilities and provide lift in certain areas—partnership involves much deeper collaboration.

In an engaged partnership, the parties share risk and reward. Partners design new strategies, driving innovation and expanding opportunities for niche, growing SMB segments of their mutual clientele.

Successful credit unions will be those that partner with each other and technology providers to build novel solutions for customers. There are many ways we can support SMBs, but none will come from any single provider, technology platform or vendor. Smart strategies will be orchestrated from start to finish, and they require all parties involved to collaborate for shared benefit.

As you begin to explore building impactful partnerships, look for allies who want to reciprocate. An impulse toward partnership tells you a lot about a firm, chiefly that they’re not afraid of participating in broader conversations and stretching beyond their comfort zone to find a collaborative solution—the kind of partner credit unions need for ongoing success.

  1. The Credit Union Edge: Collaboration

COVID-19 is only the latest epic change to rock the world and our markets. Globalization, digitalization, consolidation and many other seismic shifts have led to reliably consistent change.

Yet credit unions retain one of their greatest strengths: Willingness to collaborate for the benefit of our communities.

Credit unions rarely compete among themselves. Perceptive credit union leaders understand the true threats to their business are external. They’re feeling pressure from fintechs such as Chime and Robinhood, and they continue to struggle with mega-money-center banks.

The credit union business has long been based on collaboration, whether with similar institutions or community partners. CUs come together to help solve problems, and I’ve seen this practice continue and deepen lately. When credit unions join forces, our communities benefit—and we all grow stronger.

  1. Notice Your Strengths

Like any organization, credit unions employ spectacularly effective and experienced personnel. Count them when you’re assessing your assets. I’ve listened to the people in boardrooms and behind the teller counters at credit unions around the country, and those professionals are where a lot of innovative ideas begin.

Your staff know your business; they understand the problems and they’re in close contact with members. These are the people to whom we should listen when crafting growth strategies.

Part of our job is to listen and unlock the innovation that results from deep understanding of your membership and your business model. Then we can help execute those strategies. We can build technology solutions to soothe members’ pain points—and our first job is to listen, then reach out for active partnerships.

We know credit unions are busy places, and nobody’s overstaffed these days. Sometimes you need an extra set of hands to get things done in your efficient operation.

  1. Listening Is a Competitive Advantage

It’s an old adage, but it’s true: The market rewards people who solve hard problems. When leaders take time to listen and develop deep context, we gain a better understanding of the real problem at hand.

Much like the hammer salesperson who sees nails everywhere, it’s tempting to believe a new piece of technology will fix any situation. A hammer’s not what you need when you’re dealing with a screw. To identify nails vs. screws, it’s critical to take a step back to listen.

Start by bringing stakeholders together. Listen with empathy and examine the data. Talking with individual members and SMB owners to gain deeper context. Then you will begin to understand the problem and its context.

Working toward solutions with specific needs in focus helps credit unions and the communities they serve grow stronger together.

  1. Credit Unions Grow by Helping Small Businesses

Small businesses, defined as companies with fewer than 500 employees, are the largest segment of the U.S. economy, and it’s grown during the COVID-19 pandemic as people have left traditional jobs to build their business dreams.

According to the US Small Business Administration’s 2021 Small Business Profile:

  • There are 32.5 million small businesses, which is 99.9% of all businesses in the nation.
  • Small businesses account for 44% of all US economic activity.
  • Small businesses employ 46.8% of all workers in the country, or 61.2 million people.
  • In 2019, small businesses accounted for $459.6 billion in exports, about 1/3 of the nation’s total.

The strength of small businesses is a direct benefit to credit unions looking to grow. Like small businesses, credit unions are focused on their communities. Listening to the challenges owners face presents a significant opportunity for growth-focused credit unions.

What’s more, benefitting small businesses drives revenue that can be reinvested in our communities.

Building value for small businesses goes beyond providing accounts and issuing credit cards. Credit unions can collaborate with community partners to offer financial education, coaching and counseling, as well as services such as legal aid and marketing that might feel financially out of reach through traditional channels.

Teaching business owners how to become efficient and grow can only benefit our institutions and communities. It’s vital to show SMB owners that your credit union is there to help.

Everyone is stretched thin, and business owners place great value on knowing someone is in their corner. That peace of mind helps to build confidence and affinity as they look to optimize their business for growth.

Seize a Mission and a Moment

Credit unions were born of a mission to help their members and communities. Seize this heritage opportunity to understand members, help small businesses grow and be the rising tide that lifts your collective boats.

By listening with empathy, we can understand the challenges small businesses and individual members face. And by bringing targeted technological solutions to the table, we can begin to soothe members’ pain points in targeted, novel ways—giving everyone at the table a competitive advantage.

See what Nymbus can do for your business. Request a demo today.

John Janclaes

John Janclaes

For more than 30 years, John Janclaes has successfully led strategic growth initiatives for financial services organizations. As president and chief executive officer of $2B Partners Federal Credit Union, John ... Web: https://www.nymbus.com Details

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