If you’ve ever worked at a credit union, you know that most of its business comes from loans. In fact, when the economy was stronger, loans accounted for approximately 85 percent of their overall asset portfolio. Now, according to those I’ve recently worked with, it’s dropped severely, down to about 65 percent.
But on the bright side, they’re usually more flexible and able to make quicker fixes than other financial institutions. To help get on the right path to relieving their lending woes, here are three tips for credit unions to consider:
1. Sharpen your expertise.
Business is slower than usual, and staffs need to find innovative ways out of the rough. It’s the perfect opportunity to get caught up on the latest trends and technologies, like document management and loan processing software. These technologies are helping credit unions solve many of the same problems you’re having. Think about attending webinars or conferences, such as the NAFCU’s Annual Conference.
2. Look internally first for opportunities to improve.
You’ve probably heard it before, but it’s worth repeating – you can’t control what’s going on outside your doors, so focus on what you can control. Now’s the time to cut out inefficient steps in processes and eliminate wasteful costs.
Many credit unions are turning to software like enterprise content management (ECM). It automatically routes loans through appropriate approvals to keep costs low and member service high. This way, employees can focus on the jobs they were hired to do, rather than putting lots of time into manual processes and chasing paper files. And just as importantly, this productivity boost is helping them process more loans with fewer resources.
3. Focus on improving one area.
I recently read an article that described how one credit union grew member business loans (MBL). They focused on just this one area, creating an indirect lending program combined with aggressive marketing and community outreach campaigns. And boy did it pay off! This Pennsylvania credit union grew its member business loans by an impressive 2,900 percent over just two years.
So at some point, you’ll have to convince the influencers and decision makers that you need to the latest in servicing software. Here are some things to keep in mind. Yes, the technology will help your credit union run more efficiently, more effectively and it will likely save you money in the not too distant future. But what it really comes down to is improving member service, and the right software from a proven vendor will deliver on that most important account. That’s a fact you can take to the…credit union.