DENVER—CU Service Network has released the results of a comprehensive survey on shared services and related pain points.
The survey was conducted in partnership with Edge Consulting. Sixty credit unions in the Rocky Mountain and Plain States, ranging from $30 million to $1.6 billion in total assets, participated in the survey.
One question in particular illustrated the increasing pressure on credit unions and the need for collaboration-mindedness, according to CU Service Network. The question referenced top issues facing credit unions in the next five years, and how critical each of those issues were to the participating credit union based on a scale of “completely agree” to “strongly disagree.”
The issues were as follows:
- Compliance burden
- High expense ratio
- Loan growth
- Skills shortage
- Membership growth
- Cyber security
According to CUSN, 70% to 80% of participants agreed with many of these selections.
Perhaps not surprisingly, CUSN reported the issue that proved to be on most of the participants’ minds was compliance burden. Ninety-eight percent of participants agreed that compliance burden was a top critical issue facing credit unions, and 85% completely agreed – the highest selection.
“This is a crystal clear indication that compliance is weighing heavy on credit union executives’ minds, as the requirements, audits, and regulations on the credit union community have increased with a fury in the past few years,” said CUSN.
Also not surprising: in second place to compliance burden was cyber security. In fact, not one participant disagreed or was neutral about this issue, CUSN reported.
And the rest of the issues? High expense ratio, loan growth, and membership growth all ranked similarly, as 50% to 70% of participants agreed on their urgency.
Also reported as a concern was “skills shortage,” with 27% of participants completely agreeing and 46% agreeing that it was a top critical issue.
“It is not surprising that this was ranked as least critical, as it is a regional issue that affects more rural locations,” CUSN said. “Albeit, where it does hit, it hits hard – in areas of Nebraska and Idaho. There is simply not enough skill sets in the communities where these credit unions reside.
The consensus of the study indicates that reducing pain points will require an effort greater than the resources available in individual credit unions. For example, improving expense ratios requires new approaches to reducing expenses. Likewise reducing compliance burden and improving cyber security also requires new approaches.
CU Service Network said it “continues to research a model with Edge Consulting for shared services. The question is whether credit unions are willing to work together at a very deep level to realize economies of scale.”