Search
 
Commentary

New Products Offer Opportunities for Growth

While credit unions weathered the recession better than large banks, they are searching for new sources of revenue to counterbalance slow loan business and potential losses on the debit card side resulting from the interchange fee cap.

By Sophie Schmitt, Aite Group | Updated on March 16, 2011
Schmitt

While credit unions weathered the recession better than large banks, they are searching for new sources of revenue to counterbalance slow loan business and potential losses on the debit card side resulting from the interchange fee cap. Deepening relationships with their mass affluent members by offering investment and insurance products is one important revenue growth strategy that more and more credit unions are pursuing.

Until recently, only 50% of the top 100 credit unions offered investment solutions to their members. Further, a 2009 Aite Group study of 90 U.S. credit unions of various sizes showed that only a quarter of the sample was offering investment solutions. Those that offer investments are now more focused on growing investment sales than in the past and are working with their broker-dealer partners to attract a larger share of their members’ investment assets. According to Kevin Mummau, executive vice president for program development at CUSO Financial Services LP, a broker-dealer that caters exclusively to credit unions, “Credit unions have only scratched the surface of the opportunity. Currently, our advisors are managing an average of 20 cents in investments for every dollar of deposits.” Mr. Mummau thinks this number should be at least at 50 cents for every deposit dollar. His best-performing credit union customers have reached $1 in investments for each $1 in deposits.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

Why Your CU Needs a Chief Data Officer

Why Your CU Needs a Chief Data Officer

Henry C. Meier, Esq. |

There are too many data-related questions to answer and legal issues hanging around to not have a data chief at the helm.

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2024 ALM Global, LLC. All Rights Reserved.