The pandemic delivered a shock to normalcy. It has been a little over a year since our world was turned upside down. Nobody saw it coming so the reactions have been difficult for many credit unions, to say the least. There are commonalities that all credit unions have faced—slow or declining membership growth, fewer loans to members, higher deposit balances than normal, tighter margins, and the potential for higher levels of delinquencies, charge-offs, and fraud—making for a difficult past 12 months. Now that there are signs that things may be on the verge of turning the corner soon signaling and end to the pandemic and its devastating effects, its time to rethink how we emerge from COVID-19’s malaise. Our cooperative spirit and practices have helped the credit union industry minimize some of the pain. It is also what will help propel us into a good recovery. As we move into recovery, it will be important to continue to spend less and become more efficient in how we do things—as we learned reducing or holding the line on spending was one area, we had some control over.
Controlling Expenses will Help Facilitate Recovery and Success in the Future
We all know that credit unions succeed by making good loans, attracting deposits, and keeping members happy. Everything else are core business functions that all businesses require. We are talking about things like accounting, compliance, and data processing, to name a few. These back-office functions, while key to running the business, are “table stakes” for any credit union. Since we all need them and they essentially are the same in how they are performed, why not try to economize, and eliminate the duplicated and unique cost of doing these things. It’s no secret it requires significant budgets to hire, train and pay the salaries and benefits for individuals who perform these functions—perhaps scarce resources that could be better applied and spent doing what credit unions must do to be financially successful—make loans, attract deposits, and deliver a great member experience. That’s where CUSOs can help!
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