Is Your Credit Union Engaging in the Battle for Deposits?

The recent Silicon Valley Bank collapse has all eyes on deposits – primarily growing deposits despite economic difficulties. Is your credit union feeling the tense battle for deposits? Credit unions must strike the balance between increasing risk appetite, retaining membership and expanding deposits.

There are three hills to die on in the battle for deposits.

As we find our credit unions withstanding recession-like times, there are some hills worth “dying” on. If a strong stance isn’t taken on these core functions, we may see a demise in other areas of their business, such as member retention and satisfaction.

Hill #1: Personalization

A personalized experience shows members that their unique financial lives are a priority. Personalization must bleed into digital and in-person experiences. In-branch staff should receive continuous sales and leadership coaching. Coaching empowers authentic member relationships. For personalized digital experiences, data and the right communication channels are crucial. Member data can be cumbersomely pieced together for basic member communications. What if this didn’t have to be the case?

Centralized member data (as compared to data scattered across the business) allows the opportunity for a 360-degree view of your members’ saving and spending. These data analytics can point to specific deposit opportunities for members or groups of members. This deep data can be leveraged with multiple channels (i.e., text, email and video) for personalized member communications and offerings. In 2023 alone, it is expected that 83% of internet traffic could be video.

Key takeaway: Personalization breeds loyalty, and loyalty in banking often looks like deposits.

Hill #2: Payments

Payments that your members receive from RTPs (real-time payments) through Zelle and payment apps like Venmo, PayPal and Cash App are a growing form of deposits. Whether it’s a roommate’s rent or coffee with a friend, these payments can add up.

Generation Z and millennials are shaping the future of payments by increasing demands for convenience, fewer fees and seamless integrations for payments. Gen Z’s economic power is growing, and they aren’t loyalists like their baby boomer and Gen X predecessors. They have no qualms about taking their banking elsewhere if their payment needs aren’t being met.

Key takeaway: Payments are a vital source of non-interest income. Be prepared to adopt a multi-rail payments strategy to keep up with demand for how members want to move their funds.

Hill #3: Partnerships

The final hill that’s worth the sacrifice is industry partnerships. Credit unions must continue to extend a hand to other credit unions, and reach across the table to digital-only institutions. Fintech integrations can be mutually beneficial, and there is strength in numbers.

Partnerships also encompass industry vendors. Evaluate and reevaluate what processes to keep in-house and what makes sense (and cents) to outsource. Look for ways to streamline processes and leverage human capital while reviewing what new solutions are available in the marketplace. Outsourced solutions should always support your credit union’s deposit growth goals.

Key takeaway: Consider what makes sense to outsource to artificial intelligence or to a vendor partner.

Strategies and priorities have shifted many times over the last few years and there will certainly be more shifts yet to come. Yet the credit union mission remains the same: Prioritize member relationships and offer personalized financial services. Keep these priorities in the forefront when strategizing to help your credit unions maintain a competitive edge – staying relevant is a nonstop job!

Charlie Peterson is SVP, Strategic Initiatives for Allied Solutions in Carmel, Ind.