Management

Important Topics for CU Strategic Planning

Leaders should consider lending, governance, membership growth, technology, and compliance.

June 08, 2012
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Although lending will continue to be a struggle, credit union loan balances are on the uptick, according to CUNA’s newly released 2012-2013 Credit Union Environmental Scan. Allowances for loan losses should decrease as lending demand picks up and credit quality improves.

The second of this two-part series outlines five more topics credit unions should address in their strategic planning: lending, governance, membership growth, technology, and compliance.

Monitor the implications of these issues, and develop strategies to address them in the coming year.

Lending

Lending will continue to be a struggle, and interest-rate competition will be intense. But after three years of essentially no loan growth, credit union loan balances should increase 4% in 2012 and 6% in 2013.

Auto loans, credit card loans, and purchase mortgages will be strong growth areas in the upcoming year. While mortgage refinancing activity might be exhausted, rising longer-term rates should entice first-time home buyers off the sidelines.

Be sure your credit union has a strategy for lending to credit-impaired members. Following the recession, many members will have “bruised” credit histories—but this doesn’t necessarily mean they’re poor credit risks.

Governance

Trusted Strategic Planning Resources

Although budgets are tight, forcing tough spending decisions, strategic planning is not the place to take short-cuts—the future of your credit union depends on it.

Gain all the resources you need with the Credit Union Environmental Scan (E-Scan) — the trusted resources for credit union strategic planning for more than 25 years.

E-Scan Report: Purchase a copy for all board members and senior management so everyone comes prepared and focused.

PowerPoint Presentation: Prepare detailed PowerPoint presentations by selecting from over 100 slides filled with content and graphs from the E-Scan Report.

DVD: Use this fast-moving 35-minute overview to present the insights of the E-Scan Report in a concise way that is sure to stimulate discussion.

E-Scan Research & Advice Portal.

E-Scan Newsletter: Receive strategic updates each month!  Stay up-to-date on industry developments and trends by subscribing to this newsletter.

Visit our E-Scan website for more information. 

As your business model changes, so must your governance model. The traditional governance blueprint many boards have followed in the past is no longer adequate for moving your credit union forward.

Innovative boards need a bolder approach to meet future challenges. Establish a culture of dedication on your board.

Dedicated boards set themselves apart with their readiness to participate, contribute, and improve.

Start a program to recruit future directors. New board members offer a fresh perspective on membership growth, and on products and services for your credit union to consider.

Membership growth

More than 21 million nonmembers younger than age 18 currently live in members’ homes—your members’ children. Offer adult members incentives for signing up their children for credit union membership.

Your credit union also must attract members of Generations X and Y to ensure future loan growth. Gen Yers’ earnings are expected to exceed boomers’ income by about $500 billion within eight years.

Ride the wave of antibank sentiment and explain your not-for-profit business model to younger consumers. Once these younger consumers understand the differences between banks and credit unions, they’re far more likely to choose credit unions.

Work with minority communities to attract younger members. The average age of the Hispanic population, for example, is more than 10 years younger than non-Hispanics.

Technology

Use a member-centric approach when developing your technology strategy. Start with the desired member experience and work back toward the appropriate technology.

With decreased loan demand and increased pressure on earnings, your information technology team must watch expenses carefully. Using technology to achieve greater efficiencies was listed as the top priority among credit union CEOs surveyed by Abound Resources Inc., a CUNA Strategic Services alliance provider.

Rely on your credit union’s wealth of data when creating your business intelligence strategies. Specifically, your credit union needs a data warehouse for integrating, analyzing, and displaying data; people with analytical minds asking the right questions; and thorough integration with internal processes.

Compliance

Your credit union needs a comprehensive compliance strategy to keep up with regulatory changes from multiple state and federal agencies. Without one, it’s easy to fall out of compliance and threaten your credit union’s safety and soundness.

The Consumer Financial Protection Bureau is busy setting up systems for comments and complaints on all consumer financial products and services.

Anticipate regulatory changes as best you can while staying focused on your biggest asset—your members.

Resource
CUNA: 2012-2013 Credit Union Environmental Scan: 100-page report, DVD, PowerPoint, Strategic Planning Guide, and monthly newsletter.

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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