Steps You Can Take to Remain Viable in Uncertain Times
September 12, 2013
Sept. 12, 2013
By John M. Floyd
Since the economic downturn in 2008, financial institutions across the nation have made adjustments to increase revenue and reduce expenses. But no one expected the difficult conditions to last as long as they have. Five years later, economic and regulatory factors continue to restrict revenue opportunities. Credit unions face new worries today about the cost of regulations, increased capital requirements, low interest rates, and reduced loan quality and demand.
Until the economy gets firmly back on track, it’s clear that credit unions need to take a new strategic approach to their daily operations if they want to maintain stability during this uncertain ride.
While managers continue to be cost-conscious regarding staffing levels, it’s important to remember consumer demand for financial services remains high. Maintaining sufficient front-line personnel is essential. As the old adage warns, “You can’t cut your way to prosperity,” especially if it means a drop in member services that causes you to lose business.
Discover what’s going on beneath the surface
The best approach today is a strategic review of your ongoing expenses, with an eye on long-term consequences and benefits. You’ll see an appreciable difference in the bottom line and uncover new opportunities to improve the services provided to your institution. Relying on the “we’ve always done it that way” strategy could be costing you much more than you realize and affecting the level of service you receive from vendors throughout the year.
Taking a more strategic approach to cost-cutting initiatives—with input from the staff and board of directors—can lead to substantial savings, more efficient operations, and a more cohesive work environment.
Of course, controlling expenses is only half the equation. Discovering new sources of income generation is equally imperative in today’s challenging environment. An article from The Floyd Report, “Generating Non-Interest Income in a Highly-Regulated-Environment,” includes some ideas about how to boost your bottom line with products and services that are in demand by today’s consumers.
When all is said and done, remaining viable in today’s economy takes a balanced approach of maintaining an efficient organization, supported by compliant, income-producing products and services that provide value to members.
John M. Floyd is chairman and CEO of John M. Floyd & Associates, a leader in profitability and performance improvement consulting.
Strategic Link is the NWCUA’s wholly-owned service corporation, using the power of aggregation to provide the Association’s member credit unions with exclusive high-quality, competitively-priced products and discounted services. Contact Director of Strategic Partnerships Craig Reed today to find out how Strategic Link can help your credit union save money while meeting its goals in 2013 and beyond: email@example.com.
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