SAN FRANCISCO–Credit unions here were cautioned to pay more attention to concentration risk in several categories on both the deposit and loan side of the deposit sheet.
Juli Anne Lawrence, chief strategic officer with Raoust + Partners and the former CEO of NIH FCU (as Juli Anne Callis), warned during comments at the CUNA Marketing & Business Development Council annual meeting here that about 30% of the income at the average credit union is coming from non-interest income, and in some cases at credit unions that figure is as high as 50%.
“How important is your checking and debit income?” asked Lawrence during a session on the importance of member feedback loops. “While it’s great to monitor the things you are doing already, what are you doing about monitoring direct deposit shrinkage? Do you know how important direct deposit is to this whole system of payments?”
In Raoust + Partners’ research on whether members would consider moving checking accounts to Amazon should it partner with a bank and offer such a product, the number-one reason members said they would make the move would be to get Prime for Life from Amazon.
“Do you know anything else with the magic sauce to get people to move direct deposit? Protecting it is important,” she said. “You have to defend your flank and find something that makes you stand out.”
Lawrence urged CUs to put egos aside and recognize that most consumers want to do business with more than one financial institution, but that there is also some good news for CUs.
“You are not their only squeeze for life,” said Lawrence. “What we are also hearing consistently is ‘I want to be able to look someone in the eyeball and to know that someone has my back.’ They want to be tied to something with which they have an affinity. How can you find that affinity? That’s what feedback loops are all about.”