Apr 12 '21
Don’t Let Headwinds Derail your Long-Term Strategy
As we look back on the financial data from the past year, we can assess how credit unions have performed during the pandemic. Unsurprisingly the data brings challenging news, and the silver-lining is that facing reality now gives us a chance to take action to get back on course.
A review of call report data from 2020 finds that net revenues for credit unions dropped by 48 basis points in the fourth quarter. Think about what your top line revenue was last year, shave 0.48% off that figure and see how it makes you feel. Then ask yourself what type of response is called for today.
As leaders, we recognize the uncertainty of where we are: facing an economy which optimistically has a recovery on the horizon, at the precipice of a recovering public health crisis and moving headfirst into an unknown future of unrest on a social justice scale.
While growth to reach and serve more members is and has always been an essential driver in credit union strategic priorities, it is crucial that these headwinds we face do not push our organizations, talent or boards off course in our long-term strategies.
As the pandemic has commoditized and digitized banking even more than before, credit union leaders realize they must have a strong reason why consumers would choose them over anyone else.
In recent conversations with credit union leaders, they reiterated to me that a top priority is remixing the value proposition. In other words, as the pandemic has commoditized and digitized banking even more than before, credit union leaders realize they must have a strong reason why consumers would choose them over anyone else. While we push on the strategic accelerator for growth, we can’t let up on organizational culture drivers; innovation as a mindset; financial health as a differentiator; and diversity, equity and inclusion.
To help you and your organization stay the course in the face of headwinds against growth, Filene offers these insights and resources:
- 1 in 5 credit union members would consider switching to a more innovative financial institution: Join our free webinar on April 22 introducing Dr. Jeffrey Robinson of Rutgers Business School as Filene’s research fellow for the Center of Excellence on Innovation & Incubation. We’ll discuss how strategic priorities like adapting to digital, mining for growth and providing extreme value can be achieved through innovation.
- Being a leader in financial health and wellness is a differentiation strategy to grow members, an expense mitigation tactic and an employee recruitment and retention tool: Filene members can join us for a deep-diving research event this month on new ways innovative credit unions are meeting the changing needs of their members and improving well-being at every transitional life stage. As for the impact of financial health on your staff—start by taking a moment to calculate the cost of financial stress on job performance.
- Organizations that leverage effective DEI practices and policies perform better in terms of value, risk, and growth: Make a 10-minute investment in your first or next step of your strategy by participating in Filene’s DEI Practices and Policies Survey which will identify which DEI efforts correlate to improved firm performance. Participants will immediately receive a download of Filene’s complete DEI Road Map—a research-backed actionable guide for advancing DEI personally, operationally and organizationally—as well as a customized index of where your credit union fits in the big-picture benchmark of DEI policies and practices across the industry once the research is complete in June.
These insights and resources will help you stay the course on your long-term goals as we push forward in more challenging headwinds in the near term. Let me know if you’d like to discuss anything further!
Cheers + Best,