Marketplace reflection needed to build for the future
Discovery Conference Attendees Urged to Look for Opportunities within Challenges
MADISON, WI (October 21, 2015) — Large credit unions are at the forefront of a new frontier of challenges and opportunities that will shape the face of the credit union movement for decades to come, attendees of CUNA Mutual Group’s sixth annual Discovery Conference were told today.
“Large credit unions are the growth engine of the credit union movement,” said David Polet, director of voice of customer research at CUNA Mutual Group. “It is among these credit unions that we see growth in the number of credit unions, membership and loans.”
Polet defined large credit unions to be any credit union with more than $500 million in assets. These large credit unions hold more than 70 percent of assets and total loans in the credit union system, but only represent 7 percent of U.S. credit unions.1
“Large credit unions are able to leverage their capital and reinvest it in their credit union, their membership, in advertising and data analytics, which is allowing them to grow rapidly,” said Polet.
All credit unions, regardless of asset size, face similar challenges: growing loans, meeting compliance and regulation requirements, keeping up with technology and increasing income while reducing cost. However, credit unions respond differently to these challenges based on their asset size.
Polet explained that for large credit unions growing loans may mean diversifying the portfolio or going into new lending categories, not just increasing the credit union’s loan-to-share ratio. Large credit unions are focused on obtaining more first mortgages, indirect auto loans, and growing their member business lending.
“Credit unions have an opportunity to create even more member value by offering smaller loan amounts to business members because 70 percent of small businesses are looking for loans under $250,000, and 39 percent are looking for loans under $50,000,” said Polet.2
Continuing his presentation, Polet examined compliance, technology, and expense management challenges faced by large credit unions, as well as how they are responding to these challenges, and encouraged large credit unions to look for ways to turn these challenges into opportunities.
“The future is not a clear place, but there are clear bets that we see large credit unions making in terms of where the marketplace may be going, and it is in these insights that credit unions can reflect and find opportunities to grow as well,” concluded Polet.
Credit unions can learn more about challenges and opportunities large credit unions face by viewing Polet’s Discovery Conference session on-demand at cunamutual.com/registerondemand.
The Discovery Conference is an annual event sponsored by CUNA Mutual Group that attracts a national and international credit union audience of more than 1,300. The virtual, no-cost event is designed to give credit union leaders valuable industry insight and trends in the insurance and credit union industries. After the event, select content is available on-demand for attendees to leverage and share best practices through the end of the year.
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