Strategic Link Partner, Harland Clarke Identifies Major Trends for Credit Unions in 2019

Report breaks down the impacts to deposits, loans, digitalization strategies, and member relationships.

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2/5/2019

With merger and acquisition activity on the rise, technology in constant flux, and fintechs reshaping financial services, credit unions may be feeling vulnerable. None of this disruption is new, but it may lead to some self-directed questions for credit unions: Are we doing enough to distinguish ourselves? Are we visible and relevant? Are we staying ahead of the curve?

To answer these questions and more, Strategic Link partner, Harland Clarke offers perspective in a new report, “Survival of the Fittest: Will Your Financial Institution Evolve and Win?”

“Credit unions need a targeted approach to ensure they are meeting their members’ needs and are keeping up with the demands of the industry,” said NWCUA VP of Strategic Resources, Jason Smith. “Our partner, Harland Clarke, has some valuable insight on the latest financial industry trends and how credit unions can remain competitive or improve their position in the financial services marketplace.”

Harland Clarke’s insights for the coming year:

1. Battle for Deposits – A rising interest rate environment is new to an entire generation of Americans. For credit unions, there’s a growing need for deposits to fuel lending. For members, there’s a new desire for meaningful return.

This member hunger for a high rate — coupled with lack of loyalty and relative ease of opening a CD or money market — is resulting in a fierce fight for deposits. Of course, building a strong deposit base is key to the balance sheet.

2. Battle for Loans – Unemployment is down. Home prices are on the rise. Consumers are buying cars, boats, and second homes. They’re using credit cards and going on vacation. Total outstanding U.S. consumer debt will soon top $4 trillion. Loan acquisition is consistently ranked among the top three priorities by financial institution marketers, but competition is fierce and growing, especially from fintech.

The fintech companies have it right. They embrace the fact that consumers are interested in a fast application and approval process. According to TransUnion, they know that on average, 60 percent of borrowers commit to a loan offer within one week of initiating their search. They understand the importance of taking the guesswork out of loan marketing and reducing loan application anxiety.

3. Battle for Consumer Mindshare – It used to be that people turned to their credit union for all things financial. Now, there’s a wide variety of options for financial services. As a credit union, it’s up to you to convince your members and prospects that you are relevant — that you “know” them and have their best interests in mind.

4. Battle for Digital Superiority – Member expectations of their credit union are at an all-time high. Your members expect to do their banking where and when they want, in a seamless manner. This is especially true in the digital realm. As members become more digital, more demanding, and more tech-savvy, credit unions are investing aggressively in digital transformation projects. 

5. Battle for Relationship – When members are highly engaged, they buy more products and services. They think of your credit union as their primary financial institution. They’re more loyal. These are the hallmarks of a relationship.

According to research, relationship-based members use one to two more products and services on average, and a majority (55 percent) of relationship-based members are very satisfied with their primary financial institution, compared to just 40 percent of transaction-based consumers. Fostering relationships is all about service.

For more information, view the full report here. For more information about Harland Clarke, contact NWCUA VP of Strategic Resources, Jason Smith. To learn more about Strategic Link’s partnership with Harland Clarke, visit its webpage.