The Secret Of High-Performing Credit Unions?

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Imagine that there are two groups of credit unions. We’ll call one group the HPs (for high-performers), and the other group we’ll call…the other group.

Over the past two years, average membership growth for the HPs has been three times higher than that of the other group. Further, the HPs’ two-year loan and net-worth growth have been nearly twice as high, and their growth in market share has been 20% higher than the market share growth of the other group.

Which group would you want your credit union to be in?

Duh.

The more important question, of course, is what did the HPs do differently?

Based on research on 54 credit unions that participated in a research study Aite Group recently conducted, I can tell you that: 1) We did find two groups, and 2) There is (at least) one very important difference between the two groups worth noting.

That difference? How the HPs manage IT.

I know you’d like to believe that it was their use of social media, or their focus on Gen Y or whatever other technology or product you champion, but I really don’t think that’s it. Because the HPs probably wouldn’t have made that investment in social media, or in other technologies, if it weren’t for how they manage IT.

When I talk about how they manage IT, I’m referring specifically to three dimensions: 1) IT risk tolerance; 2) executive support for IT; and 3) IT/business coordination.

Credit unions that show a tolerance for IT risk, have strong executive support, and enjoy excellent coordination between IT and the business outperform other credit unions — regardless of which technologies they invest in.

I’ve seen a lot of discussion online among credit union people about how to get their management team fired up about — or even remotely interested in — social media. Some of the recommendations from people revolve around “showing them the ROI.”

The paradox of the situation is that while there may very well be an ROI — or at least some tangible business benefit — the problem is that many management teams aren’t inclined to make the investment because they’re not tolerant of risk and/or don’t have a fundamental belief in the value of technology as a business enabler or competitive differentiator.

In other words, it doesn’t matter what the ROI is.

So, before you start advocating for Twitter, blogs, Facebook, etc., at your CU, ask yourself if your CU has a history of being comfortable with IT risk, executive support for IT, and coordination between IT and other departments. If not, you’ve got some work to do.

Imagine that there are two groups of credit unions (CUs). Over the past two years,
one group’s membership growth has been three times higher than that of the CUs
in the other group. Further, the first group’s two-year loan and net-worth growth
have been nearly twice as high as those of the second group, and the first group’s
growth in market share has been 20% higher than the market share growth of the
second group. Which group would you want your credit union to be in?Imagine that there are two groups of credit unions (CUs). Over the past two years, one group’s membership growth has been three times higher than that of the CUs in the other group. Further, the first group’s two-year loan and net-worth growth have been nearly twice as high as those of the second group, and the first group’s growth in market share has been 20% higher than the market share growth of the second group. Which group would you want your credit union to be in?

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