Sep 23 2013

Channel Costs and Member Behavior

Report  
Number  
271

The final report in a series focused on identifying and quantifying operational cost considerations at credit unions. 

Joseph Prunty
CEO
CorePROFIT Solutions
Report Number 271

Executive Summary

Today’s technology can process transactions, reach far flung members, and do more than ever was possible before. But new channels are costly, and it’s hard to support them without diminishing the use of other, even more expensive channels. This brief is the last in a four-part series that identifies and quantifies operational cost considerations and suggests ways to minimize expenses by making informed decisions. The other three briefs discuss item processing efficiency, balancing service with efficiency, and comparing branch delivery with other methods. The reports provide specific cost metrics based on analysis from real credit unions and offer suggestions for how to align the costs you incur with your organization’s strategy.

What is this research about?

This brief is the fourth in a four-part series that identifies and quantifies operational cost considerations at credit unions. The series does more than just identify the costs, however; it suggests measured approaches for minimizing expenses by making informed decisions. The other briefs include treatment of item processing efficiency, balancing service with efficiency, and comparing branch delivery with other methods. These reports provide specific cost metrics based on analysis from real credit unions and offer suggestions for how to align the costs you do incur with your organization’s strategy. The research encourages credit unions to think first about the discipline required to make new channel investments pay off. It reinforces the notion that offering new and exciting channels is the fun part, but migrating members toward these cost- effective channels is the hard part.

What are the credit union implications?

The research encourages credit unions to think first about the discipline required to make new channel investments pay off. New channels must increase efficiency and not simply add infrastructure, so the planning process for new channels must include asking the right questions early on. Prunty suggests several:

  • Will this new channel increase our annual volume?
  • If overall volume cannot be increased, what percentage of volume will move to the new channel?
  • Will this new channel reduce other costs in the branch channel?

New channels may solve member pain points and improve delivery, but don't let them simultaneously raise your costs.

This report is sponsored by Fiserv.