EMBRACING CHA A EMBRACING CHANGE
EMBRACING CHANGE IS NOT NEARLY ENOUGH. It is true that the only constant is constant change and, like all financial institutions, our credit union movement is experiencing revolutionary change. Over the past two decades, the ever-emerging digital world continues to change all aspects of our lives and our professional activities. Financial service providers are going through radical transformation in technology and consumer behavior and, like all revolutionary change, we cannot foresee how it will unfold. What we do know, however, is that technological and information system changes have already radically altered consumer behavior: consumer buying processes, their attention to traditional marketing (or lack thereof), and the younger generation’s conception of value is totally different from a mere ten years ago. WHAT DOES THIS MEAN FOR THE MSIC COOPERATIVE AND OUR 73 CREDIT UNION MEMBERS? First, our research shows that far too many of our member credit unions still have a “walk-in” products operation; meaning: consumer members “walk-in” to a branch office, and the credit union provides loan and deposit services. Second, as a corollary to the “walk- in” operations culture, most credit unions nationwide still do not have an adequate sales culture; meaning: they operate as order takers, not as sales initiators. Third, while younger consumers like our cooperative model and the good works we do in our communities, we remain terrible at successfully broadcasting our
advantages; meaning: most young consumers still do not understand our movement, recognize that they can join as members, or know nothing of our business model advantages. Filene Research Institute has demonstrated that most consumers – young and old – still think credit unions are affiliated with labor unions and that membership is not open, unless you belong to a traditional union. At the same time, we are facing increasing competition from banks and other non-bank financial service providers. We are all seeing increasing numbers of fintech players offering all types of consumer banking services, without costly branch operations. When we look at the financial metrics today, our Cooperative looks very strong. As of September 30, 2022 our members enjoy average capital of 11%. We have had years of solid asset growth and a dramatic increase in excess insured shares and deposits. Total assets at September 30, 2022 were $31.50 billion, up 3.07% from a year earlier. Membership is also up overall. But if we look at a long-term horizon, the warning signs are flashing. Our Cooperative’s membership growth rate is significantly lower than the national average. Our membership base is aging rapidly, as are our executive
leadership and board members. WHAT SHOULD WE DO?
We need to break the mold and start anew! The answers are easy to list, but very hard to execute - but it is necessary, and time is not on our side.
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