From 2018 to 2023, the U.S. credit union industry increased an average of 5.3% per year and is predicted to continue growing over the next five years. With such a positive outlook, you might think your credit union is set to grow with the market, but in reality it’s not that easy.
The National Credit Union Administration’s 2022 Quarterly Data Summary Report showed that the number of credit unions in the fourth quarter declined over 2021’s fourth quarter. This data is in line with the industry’s long-running consolidation trend, indicating the high competition credit unions are facing.
If you want to see your financial institution grow, it’s important to have a proactive plan that will allow your business to build a strong network, adapt to sudden changes, and maximize profit potential. Here are three strategies that can help your credit union grow:
Have a Smart Data Analytics Strategy
In 2021, one case study found that even though 92% of the companies increased their investment into data analytics in the last decade, less than 30% saw transformational business outcomes. Furthermore, most credit union leaders are not where they wanted to be in their data analytics strategy plans despite 97% believing it’s important.
The trick to a successful data strategy is how you incorporate that data throughout your financial institution. Knowing how data analytics can apply to every department helps your credit union meet your desired business outcomes.
For example, encourage a data-driven culture as part of your credit union’s core values so all your employees can build their data literacy. Your employees can then know how to use the insights they obtained from member behavior to improve your members’ experience, identify popular products or solutions, and discover upcoming lending opportunities.
Overall, knowing how to incorporate data analysis throughout your credit union lets you adapt quickly to unpredictable situations and gives you a competitive edge.
Embrace End-to-End Digitization
Customers are looking for more digital solutions when interacting with any business, with more than 86% of customers wanting to maintain or increase digital interactions. As a result, many credit unions have put improving digital member engagement as a top strategic priority for 2023.
In fact, banks have saved approximately $7.3 billion just by implementing chatbots to automate customer service. Establishing a well-rounded digital ecosystem can improve your members’ experience and attract new members, optimize the lending process, and improve your profit potential.
Creating and improving digital engagement is already a top priority for many credit unions, and yours should be no different. Knowing how to adopt digitals tools and automation solutions can increase your credit union’s efficiency and profitability, giving you a competitive edge that will attract even more potential members.
Nurture Important Relationships
Whether it’s being involved with your community, having beneficial partners, or cultivating loyal members, it’s important to know how strong relationships can help your credit union grow.
Top-performing credit unions gained their competitive advantage by focusing on their relationships with auto dealers, real estate agents, and more. These top performers also made it easier to do business with them and had a strong community presence. Because they their connections, they ranked in the top third among their peers in terms of either return on assets, membership growth, or loan growth.
When it comes to attracting new members or retaining existing ones, understanding what they want is a key step. For instance, 37% of credit union members say they’re willing to pay a fee for a credit union loyalty program.
You can also redefine your relationship with vendors to offer more innovative solutions to your members. This could mean teaming up with a workflow and productivity solutions provider that will make lending a breeze for both you and your customers.
Knowing how to implement a smart data analytics strategy, streamline digital solutions, and understand your credit union’s relationships can help you create a proactive growth plan for your credit union.