As the Federal Reserve has raised interest rates by an eye-popping 2.25 percentage points since March and is expected to raise them again before the year is out, it should, in theory, cool the over-heated economy and ideally create a "soft landing."
To most accounts, we are seeing some indications of economic cooling. House prices have held and in some markets are decreasing, and in turn, mortgage volumes are beginning to slow. While this changes the lending portfolio mix, it is also a great time to help members navigate these choppy waters.
Here is where credit unions can leverage their unique strengths. What are these strengths? According to 130 credit unions informally asked to self-report their strengths, here are the top 5 results:
1. Culture
2. Member Service
3. Community
4. Lending
5. Teamwork
Taking all of these into account, here are a few steps your credit union can take to leverage your credit union strengths.
1. Identify those in need.
Leverage your data as it will help you identify those living on the precipice of a financial disaster AS WELL as those heading in a similar direction.
2. Continue to nurture and foster programs that will allow for improved financial positions.
Whether it is via product like a debt consolidation loan, offering a deferred payment (a skip a payment), or improving financial literacy, a credit union needs to continue cultivating and nurturing these programs to help improve these members' lives.
3. Leveraging successes.
The members that have been helped can, in turn, help other members as they are an inspiration for change.
4. Creating a virtuous cycle of events.
Formalizing members' identification, nurturing, and leveraging into a formal recurring cycle of events will create a framework of continuous favorable results.
The current state of the economy has given credit unions another reason to prove their difference, to reach out and show their members how they are different from traditional Financial Institutions. To remind their members how they serve them and their community.
We believe that data transformation doesn't have to feel overwhelming or expensive to be impactful. After helping over 600 credit union leaders launch their data journeys, we have identified several consistent knowledge gaps. We have worked hard to fill these gaps with a variety of educational artifacts:
NEW! Read the Data Education White Paper (found at the bottom of the page)
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