The E-Scan Report: The Credit Union Movement’s GPS

by: Steve Rodgers, Editorial Director, CUNA

Strategic planning. To some, the phrase conjures up vague notions of “the economy” that, at once, seem too complicated to fully understand and too abstract to inspire any real consideration. Not only does strategic planning allow you, as a credit union leader, to set a clearer vision of the road ahead, it also allows you to reflect upon the core principles that have guided your credit union thus far.

Where are we now? This is the first question that should be asked at the beginning of a strategic planning meeting. While your credit union’s mission and values don’t change very often, its position in relation to those values does. Conducting a SWOT (strengths, weaknesses, opportunities and threats) analysis will help you locate your credit union’s present position. Once your objectives for progress from this point are mapped out, the only thing left to do is execute.

The CUNA 2012-2013 Environmental-Scan Report (E-Scan) can help you through all three of these phases: identifying your current position, figuring out where you want to go and deciding how to get there. E-Scan is designed to give credit unions up-to-date and reliable economic information so they can make their next strategic actions with confidence. Keeping abreast of the latest economic trends in the financial services industry is crucial to assure the plans you make today will become the positive changes you see at your credit union tomorrow. In addition, knowing what to expect in the months ahead may reveal avenues of growth you may not have considered. In planning for potential challenges, you will be able to predict future member needs and, in doing so, find ways to better serve your members.

Here are a few of the economic trends that you should keep an eye on in the coming year:

• Earnings rebound: Return on assets is expected to increase to 0.9% in 2012 and 2013. Modest growth and stronger earnings will mean capital-to-asset ratios will increase from 10% today to approximately 11% by the end of 2013, close to pre-2006 levels. This means your credit union will be able to invest more money in projects that were out of reach in past years.
• Lending: After three years of essentially no growth, loan balances are expected to increase 4% in 2012 and 6% in 2013. While improvements will not happen overnight, there are reasons to be optimistic. Strong growth is expected in the areas of auto loans, credit card loans and purchase mortgages. However, many members’ credit histories were left “bruised” by the recession and may reflect the hardships of the past few years. Have a strategy in place to help, not punish, these resilient members.
• Membership growth: Within eight years, the incomes of Gen Y members are expected to exceed those of baby boomers by $500 billion. Credit unions cannot afford to neglect this influential demographic. Unfortunately, many young people are unaware of our movement – nearly 70% of young non-members don’t know what a credit union is. Consider explaining your not-for-profit model to younger consumers. Once they understand the difference between banks and credit unions, they are far more likely to choose credit unions. You may be surprised how receptive this civic-minded generation is to messages about good causes and social improvement.

By keeping a close eye on these significant economic trends and by being willing to adapt to unforeseen variables along the way, credit unions will not only be able to prepare for the future, they’ll have the power and knowledge to shape it.

Steve Rodgers, Editorial Director at CUNA, pursues opportunities to give credit union leaders the tools, information and perspective they need to achieve superior performance. Steve has spent 30 years covering the credit union movement–from political issues to research trends. He now serves as editor of Credit Union Magazine and CUNA’s Environmental Scan. CUNA’s print and online publications give credit union leaders the tools, information, and perspective they need to achieve superior performance. www.creditunionmagazine.com

About CUNA
With its network of affiliated state credit union leagues, Credit Union National Association (CUNA) serves 90 percent of America’s 7,400 state and federally chartered credit unions, which are owned by nearly 93 million consumer members. Credit unions are not-for-profit cooperatives providing affordable financial services to people from all walks of life. For more information about CUNA, visit www.cuna.org or the CUNAverse blog and follow @CUNAverse on Twitter. For more information about credit unions, visit www.aSmarterChoice.org and follow @asmarterchoice on Twitter.