LAKEWOOD, Colo.–After earlier indicating they had put a “pause” on growth plans due to the pandemic, credit union leaders are now indicating it’s full-speed ahead in looking to drive new growth, according to a new survey from Aux.
Aux, a CUSO that provides back office support solutions, said its most recent quarterly survey on credit union growth is designed to help industry executives “identify trends, compare plans and keep pace with peers, and anticipate the future direction of the credit union industry.”
Aux said it had earlier found the pandemic caused many credit unions to hit the “pause” button on their growth plans, but that now that the pandemic is well into its second year of disruption and potentially could impact plans for 2022, “credit unions can only pause for so long before implementing plans for growth.”
The survey conducted in October with 39 credit union decision-makers from CUs ranging from $9.5 million in assets to $4 billion probed for the main areas of focus for growth initiatives in Q4 2021 and 2022 were. Among the findings:
- More than 75% of respondents said “make more loans”
- More than 66% said “increase new members”
- 38% said, “increase share of wallet”
- Other comments focused digital and branch transformation
Industry Perceptions
Aux reported it then asked if respondents felt that as an industry “Are credit unions growing stronger, or weaker?”
The responses:
- 43% said stronger
- 7% said weaker
- 33% said staying the same
“Many left comments stating that only small credit unions are getting weaker,” Aux stated. “When asked an open-comment question on what their biggest concern surrounding growth is currently, the vast majority of respondents answered having too many deposits and not enough loans.”
Loans
When asked what types of loans credit unions are focusing on most, Aux said auto loans were the most popular at 31%, and mortgages in second at 29%.
Operations
Regarding plans for expansion, almost one-third of respondents told Aux they are investing in member-serving technology rather than branches. On the other hand, a quarter of respondents are planning on building a new branch or multiple branches. In addition, a fifth are remodeling current branches.
Recent studies show that 40% of workers are thinking about quitting their current job. Aux asked how much respondents are concerned about potential turnover at their credit union. On a scale of -100 (not at all concerned) to 100 (very concerned), the average score was 51. The mode number was around 80, but a few selected that they were not very concerned at all, shifting the average.
“This question illustrates how stressed executives are regarding turnover disruption. It then made sense to ask respondents if they are implementing any changes to retain their staff,” Aux said. “A staggering 80% are increasing pay, while a third across the board are updating HR policies, increasing benefits, and promoting internally. Other participants commented that they are implementing remote/hybrid work opportunities and improving organizational culture.”
Staffing
Aux said it asked if respondents have already experienced a change in staffing/turnover in 2021. 54% said more turnover, 30% said about the same, and 8% said less turnover. For those who have experienced more turnover, what departments were hit hardest? 84% said front line staff, and in second place, at 33% were loan departments. Least affected were compliance departments.
“I think the lack of turnover in compliance is indicative of increased awareness. The complexity of compliance in 2021 demands attention and credit unions value seasoned compliance professionals. We joke that regulatory change is job security, but it’s true,” said Gaye DeCesare, VP of Compliance and Head of Compliance Services.
Aux said it also sought to drill down to the small credit union perspective on growth, asking, “What makes it easier for large credit unions to grow and harder for small credit unions to grow?”
According to Aux, the majority of responses centered around ability to spend, invest, and generate income.
Investments
In an open-comment question, Aux said it asked where respondents felt the best area of their credit union to currently invest in was.
“The responses were all over the board, so much so that it was impossible to even highlight trends,” Aux stated. “Ranging from technology, to staff, to CUSO relationships, to new branches, responses spanned the full spectrum. Up until this point in the survey, there has been a general agreement in most responses, but the topic of investments show how unique each credit union’s strategies are, even when the industry seems to be unanimous. Even segmented by size, there were no trends in responses.”
Regarding investments in technology specifically, data analytics was the most popular, with 46% of the votes, Aux stated. Mobile/remote banking and security were tied at 33%. Only 10% of respondents said they had no plans to invest in technology.