Four Community Bank or Credit Union Risks You Should Take

Mark Arnold
Four Community Bank or Credit Union Risks You Should Take

“A ship in the harbor is safe…but that is not what ships are for.”

Credit unions and community banks are inherently conservative. That’s a good thing…until it becomes a bad thing. Sometimes an overly conservative nature leads to taking no risks at all.

As John Maxwell wrote, “The moment you decide not to take a risk is when your competitors will pass you by.” And as the book Traction notes, “If you cannot risk, you cannot grow. If you cannot grow, you cannot become your best.”

There are certain community bank or credit union risks you should take. While you often associate taking risks with your loan portfolios, there are other critical areas that need a risk assessment too.

1. Take Risks with Unique Groups

Every credit union or community bank wants the perfect consumer, the perfect community or the perfect target group. Get over it—they don’t exist.

However, there are many people, areas and companies with warts on them. Real people who need real financial help. Those are some of your best target audiences. Yes, serving the underserved has risks. Serving the unbanked has risks. Serving small businesses has risks.

If you are looking for the ideal niche group, then you will be looking for a while. Instead, take community bank or credit union risks with a unique group and serve them.

2. Take Risks with Marketing

Is your marketing boring? Remember, no one talks about a boring company. Maybe your community bank or credit union risks should include stopping the use of traditional media (billboards, direct mail, etc.) and doing more with emerging marketing technologies (geofencing, SEO/SEM, digital, video, etc.).

While there is “no school like the old school,” a part of your marketing strategy should include a tactic you’ve never used at your financial institution. For example, Element Credit Union offers Zombie debit card designs.

3. Take Risks with Employees

One of your greatest assets is your employees.  Yet as Stephen Covey once said, “People are called an expense and things are called assets.” Never forget that your employees are your brand—they live it (or break it) every day.

Focus on your employees’ potential, not their shortcomings. Give that “up and comer” the chance he or she deserves. Empower your employees to accomplish something great and don’t stifle their creativity. For example, one of our strategic planning clients includes one of their young professionals in their planning meetings. It empowers the employee while injecting some youthfulness into the process.

4. Take Risks with Your Strategy

Ultimately, strategy comes down to community bank or credit union risks. It’s like the Kenny Rogers song “The Gambler:” you have to know when to hold them and know when to fold them. Taking risks with your strategy could include opening (or closing) a branch, investing in a new core system, hiring for growth or any number of decisions.

In some cases, you must spend your capital rather than holding onto it. And remember: when it comes to your strategy, not taking a risk is actually taking a risk.

Will taking the above community bank or credit union risks lead to mistakes? They could…but they could also lead to great success. And not taking these steps will lead to complacency and stagnation (an even worse result). Plan what risks you’re going to take today when you book a free consultation to discuss On The Mark Strategies’ strategic planning services.

Mark Arnold
Founder and CEO