Credit unions continue adding members at a record pace. Membership grew by a record-high 4.5% as of end-2018 (up from 4.1% in 2017), fueled by strong U.S. economic performance, an optimistic outlook on the U.S. economy, low unemployment rates, and high levels of consumption.
With 116.2 million members across all 5,375 federally-insured credit unions in business nationwide, credit unions of all sizes are experiencing rapid membership growth. Since 2008, overall membership has increased by 31%, hitting an all-time high in 2018. And while credit unions with less than $100 million in assets still struggle to gain market presence, positive member growth was recorded in all asset bands and across all regions, with the top 50 credit unions averaging the highest member growth (7.49%) across the spectrum.
What does this mean for credit unions today? Credit unions should leverage this opportunity by positioning themselves as leaders in the industry, able to respond quickly to their members needs and address market opportunities and changing economic conditions as they happen.
As member growth accelerates, here are three ways to attract new members and retain your current membership base.
1. Focus on Share Draft Accounts
Over the past 10 years, roughly 28 million consumers have chosen to use a credit union as their primary financial institution, underscoring the industry’s attractiveness. As new members seek to expand and solidify their relationships with their credit union, positive net member growth fuels product penetration. With penetration rates at an all-time high and share draft penetration leading the pack at 57.6% for 2018, credit unions should continue offering free and rewards checking accounts By offering members flexible and competitive share draft accounts, credit unions can boost members’ confidence and increase demand for other products.
2. Deepen Engagement
Furthermore, as the credit union industry continues to add members, this upward trajectory is characterized by strong indicators of deepening engagement. The national average member relationship (AMR) reached $18,775 as of end-2018, a 2.5% year-over-year increase. With AMR as a key measure of member engagement, credit unions use this powerful tool as a driver of success and determinant of how well they’re doing with the member-owners they already serve.
Overall, positive membership growth has driven strong financial results and fueled relationship opportunities across the credit union industry as people are increasingly seeing the value in member-owned financial institutions.
3. Invest in Partnerships
Partnerships, strategic acquisitions and investing in CUSOs are ways for credit unions to rapidly address the needs of their growing membership base by bringing in new technologies and innovation solutions for members. These technologies also help credit unions quickly scale up back office so routine services for many members can be processed efficiently, freeing up time for credit unions to focus on engagement and member experience. Examples of proactive partnerships in the credit union world include PenFed purchasing an advertising agency, CUNA mutual snapping up fintech Mirador, Trellance purchasing big data CUSO OnApproach and most recently CULedger partnering with IBM to build a blockchain consortium.
By continuing to invest and partner, credit unions can offer new technology, new services and build efficient systems so they can boost liquidity, while attracting new members, and deepening relationships with their current membership base.