The CUNA Governmental Affairs Conference was in-person for the first time in three years, giving many credit union executives a long-overdue chance to have face-to-face meetings.
SRM made the most of the week, engaging with scores of executives, getting a sense of their challenges and opportunities, and lining up discussions to assist in crafting strategies and finding solutions for both.
Several topics came up repeatedly during these conversations, punctuating how certain decisions will be critical in shaping the trajectory of the financial services industry for years to come. These choices will have even greater importance as interest rates rise and competition from challenger FIs becomes fiercer.
Four critical issues were heavily discussed at the conference:
- Balance Sheet Management: Most CEOs expressed concern about growth in 2022 in light of anticipated rate hikes and their impact on assets and liabilities. Many are showing renewed interest in deposit gathering and adding net new households. Other leaders are determined to find new ways to recruit members and book more loans.
- Cryptocurrency: Credit unions want more information about crypto, particularly since the NCUA gave its blessing to work with crypto firms. For many, it remains a curiosity, so they want to learn more about Decentralized Finance (DeFi), blockchain, and stablecoins. Does it make sense to pursue a crypto strategy? Is there sufficient member demand? How would that strategy look? Some executives made it clear that they prefer to market services as digital assets instead of crypto to maneuver around prevailing stereotypes associated with that term.
- NSF Fee Quandary: As more big banks waive or restructure overdraft fees, smaller institutions feel pressure to do the same. The issue is that NSF fees are a huge revenue driver for many credit unions. Waiving those fees would take a chunk out of the bottom line, therein creating a need to find ways to fill an oversized hole. Many CEOs are trying to understand where the market is moving and how to best price and manage overdraft charges.
- The Role of Technology: CEOs are thinking a lot about technology enhancements to serve their members better. There were many conversations about Interactive Teller Machines (ITMs). COVID-19 caused a permanent shift to digital channels while also altering consumer expectations. This has forced many credit unions to look for a balance between physical locations and app-based services. Additionally, there is some anxiety when it comes to selecting the right fintech partners.
The Bottom Line
The conference made it clear that executives have a lot on their plates as they navigate through this year. External forces threaten to cut into revenue and increase operating expenses. Still, there are many opportunities for FIs that do their homework and make good decisions regarding partnerships and membership outreach. SRM can help management teams make sense of the confusion, forge the right partnerships, and craft strategies that capitalize on the untapped potential embedded within their institutions.
