By Amber Harsin, CEO, Prodigy
Over the past few years, credit unions have spent a lot of time and money making sure they remain attractive to today’s mobile consumer. Credit unions have replaced their archaic core processing systems, upgraded digital banking software and deployed new product sets, all to ensure that the needs of today’s bank anywhere/anytime consumer are met.
For better or worse, our work here isn’t done. Among the many lessons already heaved upon us by 2020, credit unions and their vendors both discovered that they also need to accommodate the anywhere/anytime employee, i.e., the remote employee. With shelter-in-place orders in effect, back-office employees either have to work from home or not work at all. Most all credit unions I know have employees working from home right now. The question is: How easy or hard was it to make that happen?
For credit unions that operate their entire IT infrastructure – including their core – in the cloud, I can tell you it was almost effortless.… Read more
Giving members more
In 2018 when Vermont based River Valley Credit Union was looking for solutions to boost its card program, the team reached out to Trellance to implement the Card Portfolio Growth Solutions (CPGS). “We marketed our credit card in house for many years and consistently added approximately 10-20 new accounts per month, but we were interested in finding a way to market our cards to new membership and boosting usage to existing cardholders,” explained Laura Paice, AVP, Consumer Lending at River Valley CU. She confessed that existing cardholders’ spending power was very tight because although they increased approval amounts for unsecured loans, they had not looked at credit lines within their card portfolio for a long time.
Trellance’s data-driven, implementation-ready CPGS was just the strategy River Valley needed to boost its card portfolio. Ann Farrell, Director of Portfolio Growth at Trellance, noted that “The program has been averaging 19% year over year in revenue for participating credit unions since we started the solution in 2016.… Read more
As someone who has worked with CUSOs for the past thirty years, I am often asked by credit union CEO’s what are the “hot” services for CUSOs? “I need more revenue streams and I need to contain my operating costs. What works?”
Revenue streams come in two flavors, fee revenue and interest revenue. Looking first at fee income, investment services can provide significant returns. After paying the financial advisors and costs, credit unions can earn between 30%- 45% of the commissions shared with the credit union which can be 80% to 92% of the total commissions. There are many credit unions that have affiliated broker/dealer relationships that generate over a million dollars per year in commission income (note that this model is direct with the credit union and not through a CUSO). The amount of capital needed to start up and support an affiliated investment services program is a pittance comparted to the capital needed to source, underwrite, fund, service and reserve for loans.… Read more
The stories we tell ourselves frame how we view the world, our place in it and how we respond to it. I call this internal viewpoint our myths, our prisms that interpret the world. The myths we create for ourselves have a profound impact on our ability to recognize and respond to change. The prism through which we see the world is formed for each of us, not surprisingly, during our formative years. For example, the children of the depression in the 30’s were adults in the boom years of the 50’s but they never took prosperity for granted and made decisions based on that view. The children of the depression could never have been the free spenders of the 80’s and 90’s.
The myths of credit unions developed in the formative years of credit unions. Credit unions were a movement then, not an industry. Members were drawn to credit unions because credit unions met the financial needs of members who were underserved and overcharged by the banks. … Read more
By Edward Chuang, Executive Vice President, Chief Information Officer, Logix Federal Credit Union
Think back ten short years ago. In 2009, USAA was first on the scene to introduce mobile check deposit. Consumers raved and said it was “like magic.” Today, that magic is a basic expectation for every financial institution. Financial institutions of all sizes are working to keep pace with ever-evolving consumer demand.
Once consumers have access to convenient, time-saving technology – regardless of which industry introduced it – that offering becomes the new floor for all industries and companies. So, for instance, when a retail giant makes a process or transaction easier, consumers get accustomed to that experience and expect it in all of their mobile apps. The way money and commerce are moving, it’s obvious that it’s all digital. For many years, transactions on digital banking channels have eclipsed transaction counts in all other channels combined. Without investing in digital, there is a very real risk of financial institutions being left behind, or worse, becoming extinct.… Read more