Top Industry News to Know During Credit Union Strategic Planning

Sean Galli
Top Industry News to Know During Credit Union Strategic Planning

Between strategic planning, budgeting and accomplishing yearly projects…you might not have time to read the news.

Still, industry news is vitally important. It contributes to your professional growth. It provides insight into future trends. And it just might help you do all that planning, budgeting and accomplishing with a bit more know-how.

Here are the top three pieces of industry news you should know going into the fall.

1. Top Institutions Are Tackling the Gen Z Conundrum

With only 4% of Gen Z as credit union members, appealing to Gen Z is an immediate need. Tackling this problem takes a combination of clever marketing and understanding Gen Z’s maturing financial behavior.

A Financial Brand report shows 50% of Gen Z borrowers want to open a new credit card sometime in the next year, and their balances increased by 51.9% year over year. This statistic reflects an ever-increasing financial "coming of age" for Gen Z, as well as an attempt to deal with inflationary pressures. You must find a way to attract their credit card business.

Affinity Plus FCU is a good model. Their "Life Math" campaign targeted younger generations facing major life changes by promising expertise and simplicity…resulting in 7% membership growth in 2022.

Learn some lessons from Affinity Plus. Target:

  • Simplicity/Convenience
  • Life Changes/Economic Environment
  • Gen Z’s Need for Financial Guidance

2. Lack of Leadership Accelerates Industry Consolidation

Q2 of 2023 saw 36 credit union mergers, a higher number than mergers approved in Q2 of 2022. And out of those 36 mergers, seven of them related to succession issues. There were simply no candidates who wanted to take over as CEOs or Board members.

Enough mergers occur because of poor leadership planning that NCUA Chairman Todd Harper commented on it at this year’s Credit Union Leadership Convention. He said, "One reason so many mergers are occurring is an absence of effective succession planning, especially in smaller credit unions."

Stop kicking the can down the road when it comes to succession planning. You need a plan today in case the worst happens. More importantly, your members need a plan in case the worst happens.

Stop saying "there’s always next year." Next year is never guaranteed.

3. War for Deposits Remains in Full Swing

One of our clients called the war for deposits "hand-to-hand combat," and it’s still an accurate comparison. The battle is ever-evolving too.

During the bank failures of early 2023, deposits fled to the stability of big banks. Now, people are flocking to higher rates at smaller banks. The credit union world is a mixed bag – some are struggling to find deposits; others have more than enough.

One thing is clear: rates are king for depositors.

Depositors, like all other consumers, are motivated by what’s in it for them. That’s why a CU Times writer will abandon her credit union if it means growing her money at a higher rate. Showing off your service is great, but you need to get at the core of what depositors want.

This might require risky changes like paying higher rates than you’re accustomed to or eliminating overdraft fees. If you’re not able to make those changes, you must have great marketing.

Some approaches to take are:

  • Running expertly crafted CD promos (if needing deposits ASAP)
  • Targeting still-present consumer worries about bank instability by promoting your NCUA and ESI deposit insurance (if you have ESI)
  • Introduce other deposit growth products (like Save to Win)

Do you need help addressing these topics? On The Mark Strategies' strategic planning facilitators can help you make a plan to tackle the future. Book a free consultation now.

Sean Galli
Marketing Coordinator
Sean Galli
Remember to Link Bank or Credit Union Vision to Action

Remember to Link Bank or Credit Union Vision to Action

Link your bank or credit union vision to real impact with this On The Mark Strategies article. Use onboarding and storytelling to create something memorable.