MADISON, Wis. (10/3/13)--Despite competitive and other challenges, forecasts of modest economic growth provide great opportunities for credit unions to add to their bottom line in a member friendly way, Dan Kaiser, CUNA Mutual Group senior vice president of lending told a an Online Discovery Conference audience Tuesday.
Although vehicle loans are driving a rebound on lending, a more favorable economic outlook affords many other lending opportunities for credit unions to meet members' needs, while generating non-interest income for the credit union, said Kaiser.
"We know membership is growing in response to banks' bad behavior, so credit unions that are smart and aggressive have opportunities to grow by capitalizing on the recovery," Kaiser said. "Being aggressive on recapturing vehicle or home equity loans are prime opportunities and credit unions need to make their own judgment on direct and indirect lending, but it's an option they shouldn't discount."
A pressing regulatory environment and competition from several platforms create challenges for credit unions, Kaiser said. "Retail banking is also seeing opportunities to grow in an improving economy," he added. "The credit union lending protection model is fairer and much more member-friendly than banks and is more apt to survive regulatory scrutiny."
Kaiser advised credit unions to move towards a sales culture. Having products that benefit members is a two-pronged benefit--to members and the credit union, but it requires educating members on the benefits of products.
"In addition to traditional borrowing opportunities, lifestyle and 'green' lending not only respond to members' changing priorities, they are more opportunities to meet members' needs," Kaiser added. He cited cosmetic surgery, weight loss and adoption as examples of lifestyle lending opportunities and electric vehicles, replacement windows and insulation as green lending examples.
Credit unions may not be serving the "sweet spot" of credit union membership if they don't provide mobile banking, Kaiser said. "It's easy to look at smartphone lending use as a Gen Y issue," he said. "Actually, 55% of the 45-to-54 age group have a smartphone. If you're not providing mobile banking, you're not even meeting needs of current members."
Online Discovery is a free annual conference sponsored by CUNA Mutual Group that attracts a national and international credit union audience of more than 1,300.