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CUNA Environmental Scan Report 2014-15Top Industry Trends -- Part II

by Donya Parrish, MCUN

A few weeks ago, I introduced you to CUNA’s E-Scan Report and five of the top ten industry trends that offer both challenges and opportunities to your credit union in the next 12-18 months. This week, we are going to look at the remaining five, as well as how you can incorporate these trends into strategic planning and the business plan.

  1. Life After Refis -- Now that most of your members have refinanced their mortgage to low rates, the attention in the market will turn to purchase mortgages. Prepare your lending and business development departments for this change and be proactive in ensuring your membership knows you are an option for this product.

  2. Lower Fee Income -- If your credit union relies on fee or noninterest income from penalties, interchange, or mortgage refis, prepare your credit union for a drop. It has been noted this could be “the biggest drag on net income in 2015.”

  3. Interest-Rate Risk -- NCUA Chairman Matz said recently “The credit union system is faced with extraordinary interest rate risk challenges. At the same time, there have been significant shifts in the composition of assets and liabilities over the past several years. In the event of a rapid change in interest rates, the result at some credit unions would be stressed earnings and the possibility of large declines in economic value.” While no one knows the magic date that rates will begin to increase, it seems there is more confidence it is close. Be aware of your credit union’s plan for dealing with the shift, as well as possible impact to the bottom line.

  4. Recruit and Retain -- With a Montana unemployment rate of 4.6% (May 2014), it will be a challenge to attract qualified employees. Why not put your time and effort into developing the ones you have? Job satisfaction ties closely to training, recognition, and feedback, which then leads to engagement and retention of your best and brightest. HR professionals agree that your corporate culture can be geared toward retaining, as well as attracting great employees.

  5.  Big Data -- The information your credit union has access to about your members may be valuable, but might also be held in various systems that don’t “talk” to each other. This data can tell you a lot about how and where your members are accessing your products and services.

So, there you have it. The top trends impacting credit unions for the coming year. I hope this discussion and the accompanying resources are helpful to you as you move into the strategic planning and budgeting season.

Donya Parrish is the VP-Dues Supported Services for the Montana Credit Union Network. She would welcome any questions or comments on this material. You can email Donya or call her at 800-745-5546, ext. 122.

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