SCOTTSDALE, Ariz. (8/14/13)--Significant opportunities remain for credit unions to improve their member support channels--especially because of the big gap between high and low performers, according to results of a new benchmarking study from Cornerstone Advisors.
Cornerstone is a management consulting firm focused on large, progressive credit unions and mid-size banks.
"Credit unions for the most part are reporting improved bottom lines," said Scott Sommer, Cornerstone Advisors president/CEO. "The general theme we're seeing from these numbers, however, is that with a bit more focused effort, they could be experiencing even better returns as a result of more satisfied members.
"With vast gaps between high and low performers in lending productivity, delivery channels and other measures, there is so much room for improvement," Sommer added. "If credit unions continue to gain high-value market share while scaling their efficiencies, adopting industry best practices and reinventing their delivery, they will be financial services contenders in the years ahead."
The benchmarking study of 62 credit unions with assets of more than $250 million provided these key findings:
Combined Internet and mobile log-ins have surpassed in-person teller transactions, revealing a clear shift in member service delivery channels to "click" from "brick."
Active mobile users at median (the exact middle--above and below it there is an equal number) credit unions hold nearly 7% of all checking accounts. Credit unions that are high performance level (75th percentile) saw nearly 20% held by mobile users.
While median credit unions earned roughly $150 per year in fee income from checking accounts, there remains an $85 gap between high and low performers, illustrating room for improvement at the lesser-performing credit unions.
Only 16% of consumer loan applications are originated through the Internet at the median credit union.
Median mortgage loans per-mortgage origination full-time equivalent per month were 4.4. While this is a slight increase since 2008, it trails the high-performing credit unions, which reported 6.4.
Technology spending as a function of size has decreased slightly from 2008 to .0354% of assets. The only technology spending showing any growth was strategic systems, which consists of specialized applications in loan origination, branch automation, analytics, document imaging and investment management.
The median credit union opened 1.8 new accounts for each one that it closed--up 20% from 2008, according to survey results, published in July as "The Cornerstone Report: Benchmarks and Best Practices for Credit Unions." Yet, even with the new member focus, median products-per-household dropped 28%, to 2.52.