By Ray Birch
LOMBARD, Ill.—With all that is on credit unions’ plates this year, one expert says cryptocurrency, talent acquisition and buy now, pay later solutions (BNPL) deserve the most attention.
“I think you're going to continue to see growth in our economy,” said Bill Handel, SVP of research at Raddon, who spoke with CUToday.info prior to the war in Ukraine. “But we’re still going to have some challenges and some key areas of concern that emerge.”
One of those key areas being faced by all credit unoins is the so-called Great Resignation, which has amplified the war for talent.
“I think probably every credit union is suffering with the loss of significant people,” Handel said. “The Great Resignation, the Great Retirement—whatever you want to call it—has led to rapid turnover at all levels.”
The latter euphemism is to all of the senior leaders in credit unions who are ending their working careers.
“This is a Baby Boomer-dominated industry,” said Handel. “So, much of senior executive staff are Boomers—either the older Boomers or younger Boomers that are just now stepping away in significant numbers. This whole issue of talent acquisition and retention is really a significant trend for the industry this year, and it's not an easy thing.”
Transitioning to younger, less-experienced leaders will not be easy, emphasized Handel, due to the fact credit unions have had difficulty in attracting younger staff at higher levels within the organization.
Bill Handel
“You can always attract younger staff at the lower levels to do your day-to-day work. But that senior capability, the people who really could lead the organization forward, has been a big challenge,” said Handel. “How are you trending with Millennials who are the movers and shakers and encouraging them into senior management roles?”
The Brand Promise
To attract younger executives, Handel said credit unions must effectively convey their “brand promise.”
“You can't have your brand promise be something that's just promised to the membership,” he explained. “Your brand promise is what you represent. It’s your value proposition, it is why you exist. It sounds cliche to a certain extent, but it's really this notion of why we exist and what is our purpose—with younger individuals this seems to be a very meaningful to them. I think it's important for us to really think about, as an industry, why we're in business and what is it that we do. What's the value of what we do?
“For example, our objective is to make the financial lives of our members truly better, and that sounds so bromidic, and probably every credit union in the United States has a mission statement someplace, yet how do we truly make that part who we are as an organization?” he continued. “I think that is really the critical piece…We have to consider how we become more relevant with younger people.”
An Overlooked Fundamental
One fundamental strategy for expressing that brand promise is through the CU’s website, reminded Handel.
“What’s the first thing people probably look at when they think about working for you? It’s your website,” said Handel. “What does your website look like? These are small tactical things that can be very significant. Make sure that you are presenting yourself in the right way and you are presenting yourself as an organization that is relevant and real, conveying who you truly are, rather than just putting a mission statement out there. I think talent acquisition will be big for credit unions in 2022.”
Growing Focus on Crypto
Meanwhile, Handel predicted the growing attention cryptocurrency garnered in 2021 will only intensify this year.
“We've tracked some of this behavior in our national research, but also in some of our data from our clients who are actually tracking crypto activity within their membership,” Handel said. “Crypto is growing within memberships, and it’s growing pretty rapidly.”
Raddon’s findings come at the same time several credit unions have begun offering crypto-services to members. Among them is UNIFY Financial CU, Torrance, Calif., which said it made the move in part because its members were showing strong interest in the currency as an investment.
Handel said when a credit union offers crypto services, it isn’t just adding a new service, it is really enhancing its image.
“It addresses the issue of relevancy,” said Handel. “We're probably not going to make a lot of money doing crypto business. Consumers see crypto now as simply another investment alternative—like mutual funds or annuities. But this is positioning for the credit union.”
Other Areas of Focus
Credit unions should be looking hard at the role cryptocurrency could play in their organizations, concluded Handel, who added other topics CUs should be addressing in 2022 include how to make money with net interest margins shrinking and how best to employ robotic process automation (RPI).
Handel addressed how CUs need to pay attention to BNPL here.