Trends to address during planning sessions

Scenario planning, speed, and creating a human member experience top the list.

As leaders committed to success at the strategic level, awareness and understanding of industry trends are vital for excellence in governance.

The board’s knowledge of trends allows it to have substantial conversations with the CEO. It also determines conditions where your credit union might act, continuing its focus on growth, income, and service experiences.

During the next five years, industry leaders believe retail financial institutions will face several strategic priorities. As a board, be prepared to engage in conversations to address these priorities and how they could impact your credit union.

Top priorities for 2020 include:

Scenario planning
COVID-19 reinforced the importance of “what if?” projections to determine if your credit union can weather limited operations, growth, and earnings. Discuss multiple simulations with significant changes in growth, interest margins, delinquencies, and losses.

Observe the effect on earnings and capital.

Preparation and awareness are crucial for potentially significant decisions.

Faster market delivery
In a world where credit unions seek to lead at “the speed of members,” it’s vital to deliver relevant solutions to members in record time. How quickly can your credit union design, test, and deliver new products and services?

A more human member experience
When digital channels won’t suffice, members expect to access well-trained, well-versed, and highly professional experts. What ongoing training and development programs does your credit union provide to enable this?

Enhanced digital marketing and engagement
How does your credit union prioritize its mobile and digital strategies?

Other priorities the board should consider:

Whether to cut costs or increase profit margins:
This is about making the best use of resources and maximizing opportunities for revenue. How can your credit union increase operating efficiencies and income production?

Regulatory requirements. How do any new compliance costs related to COVID-19, for example, impact return on assets, and how will your credit union offset these costs with revenue?

Members’ use of digital channels
Members who “go digital” are more satisfied, loyal, and profitable. What growth rates does your credit union experience regarding member digital engagement?

Talent acquisition, engagement, and retention
The employee experience is crucial, as it is a major component of the member experience. What are your credit union’s employee satisfaction, engagement, and retention rates?

Emerging trends that will grow in importance through 2025:

Maximum personalization in member engagement
One size will never fit all in marketing, sales, and service. How well does your credit union understand and act on granular details about member transactions, patterns, and propensities?

Open banking
Partnerships and collaboration will be essential in providing the necessary technology. What existing and new collaborations will be essential for operating and member-facing technology?

Keeping up with industry trends becomes increasingly important as your credit union grows and your board increases its focus on strategy.

While constant scanning of industry trends is fundamental, your CEO adds extra value. Ask your CEO to update the board on trends that may affect your credit union.

Will significant changes be required? Will the board need to consider substantial investments? How might members be affected?

This way, the board will be better able to understand, discuss, and act on strategic opportunities. This will provide increased value to the CEO as the board maintains focus on the highest levels of strategy and long-term success.

By Jeff Rendel, president of Rising Above Enterprises

This article initially appeared in Credit Union Directors Newsletter, which provides strategic insights for policymakers. Subscribe now to the print or PDF version.

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