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Network Effects: How to Scale Without an Identity Crisis

Thinking about a structural change? Filene makes a strong case for the network credit union concept.

By Ben Rogers | Updated on March 26, 2016
network credit union pros and cons filene research

Size matters. Larger credit unions are more successful driving membership growth, loan growth and operating efficiencies. In mid-year 2015, credit unions with more than $1 billion in assets grew membership, on average, four times as fast as those with between $100 million and $250 million in assets. The group of credit unions with less than $50 million in assets saw their membership decline. Credit unions with every asset size grew loans, but the smallest grew by 3%, those between $100 million and $250 million grew 8% and those with more than $1 billion in assets grew 13%.

The benefits of scale compound. Larger credit unions can market differently. They can hire differently. They can build and buy better technology. Their growth compounds.

But the picture is not an inevitable march to irrelevance for all but the largest credit unions. Every charter has served, and most continue to serve, important groups whose identities are caught up in the identities of the credit union. From churches, to manufacturers, to municipal employees, the fabric of the system is threaded with credit unions whose identities are valuable and whose members would miss them.

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