The Monsters Lurking Around Every Corner 🧛♂️
The financial marketplace is more crowded than a costume party at midnight. With non-bank fintechs, big banks, and neobanks creeping into credit unions' traditional markets—and sometimes even borrowing very credit union-like language to describe their value props—the pressure to stand out and retain members feels more like a battle of survival. Credit unions must strike a delicate balance: delivering personalized service while adopting cutting-edge technology, leveraging their historical strengths in their connection with local communities while scaling that differentiator as they grow. The question that haunts every leader is: How do we stand out in a market crawling with new challengers?
Survival Tips: Focus on innovation to balance efficient operations today while exploring new differentiators for tomorrow. And when you’re ready to evolve the business to take advantage of new opportunities, embrace collaboration, especially around shared data and technology partnerships. No one needs to face the competition alone.
Download Filene Fellow Dr. Jeffrey Robinson’s report, “Innovation Matters.” This report demonstrates an approach to thinking and rethinking the credit union business model in order to drive future growth.
Beware of Invisible Invaders 🕵️♀️ 👾
Cybercriminals are the ultimate tricksters, preying on credit unions of all sizes. These modern-day boogeymen aren't after candy—they’re after sensitive member data and financial assets. Fraud is proliferating especially in payments. As digital transactions rise, so do phishing attempts, ransomware attacks, and data breaches. When every click could be a trick, even the best defenses require constant vigilance.
Survival Tip: Stay one step ahead by investing in robust cybersecurity infrastructure, training employees, and keeping incident response plans sharp. For credit unions, the threat of digital insecurity is elevated by an extensive and complicated technology supply chain. Credit unions need to monitor their partners’ policies and procedures as well as their own, but your partners can also be your most trusted defenders.
On cybersecurity, see Filene Fellow Dr. Cheri Speier-Pero’s research brief on building cyber resilience. Also, check out our previous Thinking Forward article, “The Rising Cost of Fraud and Scams—and 5 Ways to Fight It.”
A Maze of Compliance Mysteries 🕸️ ⚖️
If navigating compliance was a movie, it would be a never-ending labyrinth. Changing regulations—from data privacy laws to lending rules—create complexities that leave leaders feeling like they’re running through a haunted forest without a map. Keeping up with the demands from federal and state regulators is essential for both safety and soundness and for consumer protections, but it can be exhausting. Falling behind could mean costly penalties or reputational damage that feels like a curse.
Survival Tip: Build a culture of compliance and lean on industry organizations to stay ahead of regulatory changes. Be proactive in communicating with examiners and regulators to build strong consultative connections. The right relationships and the right guidance can illuminate even the darkest paths. At the same time, don’t let compliance become an excuse for risk avoidance!
Explore our Thinking Forward article on “Five Open Questions on Open Banking: An Open Banking Primer for Credit Unions.” As one of the biggest and most timely regulatory issues facing financial services, this article will help you better understand and prepare.
Trick of Treat? 🍬 📉
In today’s economic environment, profitable growth feels more like a haunted treasure hunt. Balancing loan growth, non-interest income, and operational expenses while maintaining healthy margins has never been trickier. With rising member expectations and shrinking margins, finding sustainable growth strategies is like searching for candy in a pumpkin patch—challenging and full of surprises.
Survival Tip: Organic growth makes for sustainable growth. Focus on developing member loyalty and diversified income streams. Then own your market by claiming the advantages of operational effectiveness, which can’t be replicated by your competitors. Growth isn’t just about getting bigger—it’s about growing smarter by driving scale through improving efficiency.
Check out this valuable blog post where researcher Mike Higgins explores economy of scale through the analysis of 585 credit unions to identify characteristics of top performing institutions. Or better yet hear it straight from Mike at this year’s big.bright.minds. 2024 where he will be presenting on member profitability.
Running from the Ghosts of Outdates Systems 👻 📲
Technology is evolving faster than a witch’s broomstick, and the pressure to keep pace is relentless. Whether it’s implementing new digital services, modernizing legacy systems, or integrating AI, technology adoption can feel like a relentless race against time. Slow adoption is a recipe for irrelevance, but credit unions often feel like their working with Frankenstein legacy systems. Fall behind, and credit unions risk becoming the ghost stories of tomorrow.
Survival Tip: Embrace an agile mindset and leverage partnerships to accelerate technology implementation. Be ready to experiment and adapt—those who evolve will thrive. Technology is not just about moving financial products online. It’s about developing the people and culture to make technology change easier, sustainable, and ultimately valuable.
Watch the recording from one of our most popular webinars, “The Evolution and Impact of AI in Credit Unions.” In this special session, Filene Fellow Dr. Lamont Black and John Best explore the growing adoption of AI in a business context and shared specific use cases within the credit union industry. Also, stay tuned as our newest Center of Excellence, Design for Digital will be launching soon!
Fear Not—You're Not Alone in the Fight! 🦇 💪
While these challenges are real—and sometimes terrifying—credit union leaders have more than just luck on their side. The spirit of cooperation, shared knowledge, and member-first values serve as powerful antidotes to these frights. Collaboration within the movement and a willingness to embrace change can turn even the scariest situations into opportunities for growth.
So, as you navigate these ghoulish challenges, remember you are not alone. There’s strength in numbers, creativity in collaboration, and resilience in every credit union’s DNA. Let’s face the frights head-on—together.
Happy Halloween! 🎃
-JA
