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Optimize Growth Opportunities in 2018
Monday, February 26, 2018 6:35 AM

Focus your efforts where you can get the best results

Richard Miller, John M. Floyd & Associates (JMFA)

Buoyed by on-going economic recovery, low unemployment, increased consumer confidence, individual and corporate tax cuts, and possible reduction in regulatory activity, the stage is set for credit union growth in 2018. And despite rising interest rates, the CUNA Credit Union Forecast expects credit union membership and loan growth to remain strong and portfolios to remain healthy.

The updated report projects a 6 percent growth in savings balances and overall loan growth of 10 percent. Membership growth is expected to be at 3.5 percent, only slightly lower than 2017 levels. Credit union earnings will receive a boost from the Corporate Stabilization Fund repayment in the second quarter, increasing ROA to 85 basis points when combined with a strong economy and growing loan portfolios.

Look beyond the challenges to reach your goals
As credit unions move forward with optimism, they continue to deal with the realities of today’s business environment. Competition from traditional and emerging service providers, the cost of IT security, lingering compliance concerns and, of course, the often unpredictability of consumer behavior are challenges that all institutions share on some level.

Despite these obstacles, healthy growth is possible. By creating exceptional member experiences, providing fully disclosed programs, and offering convenient services, credit unions can strengthen existing relationships and attract new business—all of which will potentially lead to more revenue opportunities.

Don’t let potential earnings slip out the door
In today’s competitive environment, there’s a pretty good chance that you are sharing your members with a competitor. According to a recent survey, 50 percent of Americans have a checking account at multiple financial institutions. The top reasons include flexibility and convenience, followed by the variety of products and services offered and lower fees. If you’re not providing your members with a one-stop banking experience, it’s time to take a look at your service strategy to see why not.

Volume is key to increasing revenue
Consumers are willing to pay a fee for a service they value. The more they use the service, the more fees your institution receives. But if your members don’t know you offer a certain service and subsequently get that service someplace else, you’re losing potential revenue and missing a cost-effective opportunity to achieve across-the-board growth. What’s more, your competition is reaping the rewards.

Unfortunately, many credit unions don’t know they’re losing revenue because they are more focused on attracting new checking accounts than analyzing their existing member activity. Is this the situation in your institution?

Take a minute to answer the following questions:

  • Are your current members aware of all the services you provide? 
  • Do they know how your services work?
  • Do you have the analytics that allow you to track how your services are used?

Overcome growth obstacles with a proven solution
For example, are all eligible members using your overdraft services? A results-oriented overdraft program is a reliable source of revenue for your credit union that can support the implementation of additional services to keep you competitive, update your technology, and offset the costs of addressing compliance expectations. Plus, a fully disclosed program provides members with access to a safety net in the event they experience a financial emergency and helps them to manage their finances more effectively.

As a trusted provider of revenue enhancement solutions, JMFA has implemented more than 1,600 customized program installations for financial institutions throughout the U.S. As a result, in addition to experiencing non-interest income increases from 50 to 300 percent—in many cases far exceeding their expectations—our clients maintain total compliance with all regulatory expectations.

Cultivating what you have leads to long-term growth
Remember, it costs less to keep your existing members than to acquire new ones. And adding new accounts may not result in growth, if the members don’t use the services you provide.

Whatever your growth strategy might be for 2018, make sure you are optimizing the business potential of your existing members by effectively communicating your products and services, and tracking their usage. The more you enhance the service experience, the more members benefit. And when they are satisfied with their experience, they are much more likely to share it with family and friends, which can result in an inexpensive and effective way to grow.

About the Author
Richard Miller joined JMFA after a 23-year career in banking, providing a broad base of management experience in community banking, from chief lending officer to president of small and medium-sized financial institutions. Richard supervises JMFA’s national sales activities, establishing valued relationships and helping JMFA and its financial clients achieve their goals. 

He began his banking career in 1972, with American Bank of Tulsa, advancing to chief lending officer by 1980. During that time, the bank engaged JMFA, resulting in substantial earnings gains that made American Bank of Tulsa the highest earning bank in the region, posting ROA’s near 3 percent and ROE’s close to 25 percent. In 1982, Richard and his management team left American and chartered Southern National Bank in Tulsa, which was sold in 1992 to Boatman’s Bancshares of St. Louis, Missouri. After a restructuring consulting assignment with a New Orleans financial institution, Richard joined JMFA as sales director for the Southeastern region. He is a graduate of the University of Tulsa and the Southwestern Graduate School of Banking at Southern Methodist University in Dallas, Texas.

About John M. Floyd & Associates
For the past 38 years JMFA has been considered one of the most trusted names in the industry helping community banks and credit unions improve their performance and profitability. Whether it’s recovering lost revenue, uncovering savings opportunities, serving your account holders better, finding the perfect personnel fit or delivering a 100 percent compliant courtesy pay program, JMFA has the right solutions to help you not only meet, but also exceed your goals. We are proud to be a preferred provider among many industry groups, including CUNA Strategic Services. To learn more please visit or call 800-809-2307.

JMFA is an endorsed business partner of Credit Union Resources, Inc., a wholly owned subsidiary of the Cornerstone Credit Union League.