The disconnect between adding new accounts and increasing revenue

According to Call Report data, between 2012 and 2015 the number of credit union checking accounts rose from 46,612,471 to 57,135,397 – an increase of 23 percent. This says a great deal about the level of trust and value consumers place in credit unions. However, this increase in checking accounts is actually masking a serious decline in fee income per account for many institutions. Overall, fee income only increased by six percent over the same time period, meaning that credit unions actually lost $1.70 per account per month in fee income; making the loss to the industry a staggering $1.168 billion. This number does not include the increased expense of servicing the new accounts.

As the financial services industry continues to struggle with low interest rates, along with decreasing income-producing opportunities – such as the potential loss of interchange income – and the rising costs of technology and maintaining compliance, simply acquiring more member accounts doesn’t automatically translate into generating the revenue necessary to thrive. In fact, it can cost you in terms of staffing, data processing and facilities.

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