The United States has more than 4,800 credit unions with total assets amounting to $2.14 trillion. Meanwhile, nearly 88,000 credit unions have served more than 393 million members worldwide as of 2021.
With such numbers, operating credit unions is no longer a small-scale cooperative venture. Decision-makers must adequately plan and strategize to guide their organizations forward.
What’s the importance of planning and strategy for credit unions? What strategic questions should you address if you manage a credit union and want to improve your services?
This article lists and discusses the questions credit union leaders should ask to help improve their businesses. This article also explains why strategy and planning are essential for financial providers like credit unions.
Strategic Questions Credit Union Leaders Should Consider Asking
Credit unions may have fewer financial options and physical locations than traditional banks. Still, these unions can offer relatively better rates.
Through strategy and planning, credit union leaders can improve and provide high-quality financial services to their members despite the limitations.
For example, working with credit union members to create a debt management plan, like those offered by credit card settlement companies listed by Credit Summit, can help these individuals settle their debt conveniently.
Businesses, including credit unions, conduct strategic planning to help them define their vision and objectives. Strategic planning also helps the organization identify targets and what the company aims to achieve in the short and long term.
Part of strategic planning is to ask and address questions relevant to what the organization wants to achieve. If you’re part of the credit union leadership, such questions can involve products and services your organization offers or plans to offer.
As such, you should consider the following strategic questions to help give direction to your organization and stay relevant to the members’ needs:
- Is the organization’s vision or purpose relevant to the members’ and employees’ current needs?
Your organization’s objectives 10 or 20 years ago may not be relevant today. You may have achieved them already and now require a new set of goals.
Part of strategic planning is to help your organization develop goals and objectives that align with current trends and maintain a competitive advantage.
For credit unions, these goals can include achieving new earning targets, additional memberships, property acquisitions, or new products and services. For example, if your current membership is around 5,000, consider increasing it to 10,000 within five years.
- Are the capital investments, resource allocations, and operating budgets sufficient and aligned with the organization’s strategies and value focus?
Allocating a sufficient budget is necessary to ensure that specific programs are well-funded without spending too much or too little.
If you’re running a nonprofit credit union, your budget will probably be minimal. But with the correct strategic planning, you’ll likely achieve your program goals without exceeding that budget.
For instance, if your organization’s objectives include supporting credit-related research, you may want to allocate enough funding for this project.
- Does the organization have a well-defined member experience program?
Customer satisfaction can help a business gain loyalty, improve sales revenue, reduce marketing expenses, and boost reputation. Your credit union can also experience these benefits if your members are satisfied with your services.
One way to improve member satisfaction is through a member experience program.
This program involves improving talent management strategies, leveraging member data, and working with partners to address pain points (specific customer problems) preventing member service improvement.
- Is the organization secured against present and future cybersecurity risks?
As technology advances at breakneck speed, the risks and security threats also increase. In 2022, a data breach in the U.S. had an average cost of $9.44 million.
With so many businesses, including credit unions, relying on technology to provide the necessary services to customers and members, the importance of cybersecurity to prevent data breaches and other threats cannot be emphasized enough.
Thus, if your credit union has significant information technology (IT) assets, like database servers, mobile apps, and member management systems, consider developing strategies and allocating enough resources dedicated to cybersecurity.
Importance of Strategy and Planning for Credit Unions
Like any other business, a credit union must have organizational goals to work on to help give it a sense of direction and purpose.
Strategic planning can provide that guidance by helping the organization create a roadmap to achieve those goals. This roadmap can help the business find it easier to keep track of its goals.
Credit unions face many immediate challenges due to a lack of strategic focus and multi-year planning. If you do not address these challenges, your members will likely become the biggest losers.
Developing a sound strategic plan can help prevent or minimize such challenges from carrying over to your members. One way to establish this plan is to address the questions relevant to your industry and organizational goal.
Successful implementation of your strategy can benefit your members and increase the likelihood of them being satisfied with your services. In turn, this satisfaction can lead to increased revenue and member loyalty.
References
- Credit unions in the United States – statistics & facts
- World Council of Credit Unions’ annual Statistical Report provides financial data for credit unions and financial cooperatives around the world
- Credit Unions: Definition, Membership Requirements, and Vs. Banks
- Top 50 Cybersecurity Statistics, Figures and Facts