3 Things Killing Credit Unions En Masse Right Now

When a company or organization dies, one commonality among the majority is comfort. As I type this, I’m mighty comfy sitting in my plant room in my vintage Woodard rocking chair overlooking my garden. That’s not the kind of comfort I’m talking about though. It’s the comfort that comes from never changing a thing within your credit union because you may fail, which is not comfortable, and change is uncomfortable.

You stop listening to your members. You stop trying new things. You stop looking at the data because you know it’s going to scream, “you need to change.” Death isn’t immediate. Hey, your capital is above 9% and you still have positive net income, but your credit union’s vital signs are starting to beat slower and slower.

I often wonder how a credit union leader can let a once vibrant organization that did so much good for people die a slow death and be ok with taking away that opportunity to help the next generation. But it’s not about the credit union, it’s about them (the leader) and their comfort. It’s about making it to retirement and not rocking the boat. The once necessary initiative, creativity, and risk-taking that got the credit union to where it is today are removed and replaced with comfort.

Research shows that this doesn’t happen in a single day or even over a long span of time. A period of 305 years of comfort and lack of change will allow the rigor to start setting in. But it doesn’t have to be. In the many credit union marketing engagements and strategic planning sessions I’ve facilitated in the last decade-plus, here are three observations I’ve seen from comfortable, dying credit unions:

  1. The passionate leader leaves. That’s probably the person who drove change and understood the importance of strategy and listening to the member. Those left are the doers, and without that critical change agent, the credit union begins to look like the home that the family up and left during dinner never to return. Everything stays just as the leader left it, and no one is willing to jump in and challenge what’s always been done.
  2. Rose-colored readers. It’s easy to slice and dice the data to fit your narrative. “Our capital is great, and our net income is still very positive.” Yet other key metrics or as our partner, Randy Thompson from TCT Risk, calls them, vital signs, are starting to show signs of decline, but those numbers are ignored in lieu of the positive ones. Hear no evil, see no evil. No one needs to change or admit things are on the decline. One of the first things we do while onboarding a new credit union marketing client is invite Randy to review the vital signs of the credit union. It’s hard to ignore when your numbers are in front of you with a red, yellow, or green indicator.
  3. Compliance outweighs member experience. Don’t skew my words and say, “Bo doesn’t think compliance matters.” That’s not true. However, John Felton from Southern Chautauqua FCU nailed it recently with a comment on social media reminding credit unions to manage risk, not avoid it. The death rattle began shaking for a former client of ours that allowed compliance to govern the credit union. Every creative idea was shot down to avoid risk. More loan applications were turned down than approved to avoid risk. The application process was outdated and burdensome, creating a horrible experience for members and prospective members. “Why aren’t we growing?” The inability to change and fear of any risk at all is keeping this diamond in the rough credit union from earning the growth it’s fully capable of experiencing.

Does any of this sound familiar? Is your comfort killing your credit union and keeping hundreds, possibly thousands, of people from getting the financial help they need? We have one opening this fall to welcome a new credit union marketing client to the YMC family. Let us help you gain the perspective you need through our time-tested process to achieve the results you want (and are fully capable of). Let’s talk!

Don’t Get Too Comfortable

From strat plans to rebrands, YMC President and CEO, Bo, is passionate about helping financial institutions come up with a winning formula. If you’re ready to go beyond the SWOT, you can email him at bo@yourmarketingco.com.

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