Over the past 32 years, Turner Duran has designed and delivered successful credit union projects for thriving financial institutions across Southeast Texas. With ever-changing merchandising, administrative, technological, and security issues facing the industry, it is important for those in the business to consistently find ways to adapt and improve. With this in mind, we asked some experts in the industry to fill us in on the state of credit unions in Texas and here is what we learned:
- Overall, credit unions are doing well and have seen increased headway since the 2008 financial crisis. Lessons learned during the financial crisis have allowed credit unions to better manage through the rough times by emphasizing solid strategic planning. While banks were getting negative publicity during this time, credit unions were able to capitalize and have seen enhanced growth ever since. Consumers seem to be drawn to the fact that credit unions are there to help their members, and as a result credit union membership and loan growth continues to increase more rapidly than in the past. However, smaller credit unions are finding it more challenging to meet the demands of members due to the high cost of technological improvements. In 2006 there were roughly 8,700 credit unions in the United States and today, due to mergers, there are under 6,000. Nevertheless, despite the decreased number of credit unions during this time, total assets in credit unions have grown over 49%.
- A major trend in the industry is around efficiency. A mix of reliable and easy-to-use online/mobile channels, as well as the option to visit a branch, is needed. Online and mobile banking can serve as an entire branch on its own to reach members that have no desire to enter a branch, while those members that prefer human interaction have the option to visit a branch office for personal interaction. Membership at each credit union is different, so each one has to determine the mix of online and physical branches needed to meet their needs. The key is to continually analyze both, and be able to adapt to the needs of members in various communities while keeping up with the rapidly changing technology trends.
- With increased regulations affecting financial institutions, the concerns of credit union leaders today include the cost of compliance, strategic planning, continuing improvements in technology, and finding and developing talent and future leaders. Regulations are not going away, so credit union leaders work with officials to change the ones that dramatically impact the industry and look for innovative ways to handle the others. However, in today's day and age one of the primary concerns is around cyberattacks. Credit unions not only have to deal with stolen or fraudulent debit and credit cards, but now have to worry about ransomware attacks and prepare for the cost, time, and reputation risk that comes with that type of cyberattack.
- In 2017 we should expect to see continued enhancements in technology for digital payments and digital lending. These will include regulatory control and review focusing on the home equity lending law; opportunities to mitigate regulatory burdens on credit unions; measures to favorably modify data security; and protecting the federal credit union tax exemption. In addition, interest rates will be closely followed. Interest rates are uncertain, but most indicators point to slow increases going forward. Since we have been in a low interest rate environment for many years, rising rates will be an adjustment for many people in the industry. As adjustments are made, loan and deposit rates for savers may vary greatly between institutions.