DES MOINES, Iowa—One expert sees the CU movement flourishing in 2020 due to a value proposition that not only withstands time, but strengthens over the next five years.
But to get there, says Miriam De Dios, CEO of Coopera, it will take proper steps, including understanding the credit union’s community of members, paying attention to rising market segments and being relevant.
“In five years, we’ll continue to see some of the same trends we are seeing now with new, non-traditional financial service providers entering the market,” said De Dios. “In addition, there will be an increase in financial technology innovations and mobile service delivery, as well as a growingly diverse consumer marketplace and a changing regulatory environment.”
Provided that regulations do not completely change the structure of credit unions, they will continue to fill a need for consumers seeking a community-minded, sound financial partner that can offer both digital and personal service, said De Dios.
Bottom Line
“Ultimately, credit unions prioritize the financial lives of consumers over the bottom line,” she said. “That is a highly sustainable value, especially as the consumer demand for fair, dignified financial services grows. Credit unions have a clear competitive advantage with these consumers.”
Of all the steps credit unions take over the next five years to ensure their viability, none is more important than being relevant to the community, asserted De Dios who said little time can be wasted here.
“Understand how relevant the credit union is to their community today. Identify the gaps by asking if their personnel and member make-up is representative of their field of membership. They should also ask if they have what their target consumers need today and into the future. If they do not, they need a plan to get there.”
The target consumer for credit unions has changed in many ways, said De Dios, noting that by 2020, one in three U.S. residents will be Hispanic.
Miriam De Dios, Coopera
“If a credit union is not relevant to this community today, they are already behind,” said De Dios, whose company partners with credit unions to help them serve the Hispanic market.
Fast Growing Market
De Dios reminded that Hispanics are the fastest-growing, youngest and most underserved U.S. market.
“The consumer marketplace is changing, and financial service providers are taking note of growing niche segments. That research is leading them to the creation of strategies to serve emerging and multicultural markets, as well as underserved markets,” explained De Dios. “While credit unions are the perfect partner for these markets because of their structure and philosophical mission, there is more work to be done as an industry to embrace these new markets and truly create a competitive advantage.”
De Dios also cautioned CUs not to be misled by the movement toward mobile, and to move too far away from bricks and mortar.
“All trends pointing toward an increase in mobile delivery of services are true,” said De Dios. “However, I do not believe the traditional branch or personalized service will die out completely. There will remain consumer segments that want personal service, and it would not surprise me to see more of that as people experience frustration with technology and security breaches threaten personal information, security and privacy. Like any business that seeks to grow and thrive, diversification of products and income streams is inevitable.”