Buoyed by on-going economic recovery, low unemployment, increased consumer confidence and possible reduction in regulatory activity, the stage is set for banks to grow in 2018. According to industry reports growth will continue to be a top priority.
According to the Independent Community Bankers of America (ICBA) 2018 State of Community Banking Survey
, 66 percent of respondents have set growth as a top priority for the year. This includes 22 percent who plan to increase earnings, 20 percent who are looking forward to additional loan volume and 11 percent who anticipate deposit gains.
For credit unions despite rising interest rates, membership, loan growth and portfolios are expected to remain strong and healthy. A few highlights from the latest CUNA Credit Union Forecast
include projections for growth by six percent in savings balances, a 10 percent increase for overall loan growth, a 3.5 percent increase in membership, and an overall boost in earnings.
Look beyond the challenges to reach your goals
As community banks and credit unions move forward with optimism, they continue to deal with the realities of today’s business environment. Competition from traditional and emerging service providers, potential interest rate increases, the cost of IT security, lingering compliance concerns and, of course, the often unpredictability of consumer behavior are challenges that all institutions share on some level.
Despite these obstacles, healthy growth is possible. By creating exceptional account holder experiences, providing fully disclosed programs, offering convenient services, financial institutions can capitalize on strengthening existing relationships and attracting new business—all of which will potentially lead to more revenue opportunities.
Don’t let potential earnings slip out the door
In today’s competitive environment, chances are pretty good that you are sharing your account holders with a competitor. According to a recent survey, 50 percent of Americans have a checking account at multiple financial institutions. The top reasons why include flexibility and convenience, followed by the variety of products and services offered, and lower fees. If you’re not providing your account holders with a one-stop experience, it’s time to take a look at your service strategy to see why not.
Volume is key to increasing revenue
Consumers are willing to pay a fee for a service that they value. The more they use the services you offer, the more income you will receive. But if your account holders don’t know you offer a certain service, and subsequently get that service someplace else, you will lose out on the potential revenue, as well as the cost-effective opportunity to achieve across-the-board growth. What’s more, your competition is reaping the rewards.
Unfortunately, many community financial institutions may not know that they’re losing revenue because they are more focused on attracting new checking accounts than analyzing their existing account holder activity. Is this a situation you can relate to?
Take a minute to answer the following questions:
• Are your account holders aware of all the services you provide?
• Do they know how they work and how they are priced?
• Do you have the analytics to track how your services are used?
Overcome growth obstacles with a proven solution
For example, are all eligible account holders using your overdraft services? A results-oriented overdraft program is a reliable source of revenue that can support the implementation of additional services to keep you competitive, update your technology and offset the costs of addressing compliance expectations. Plus, a fully disclosed program provides account holders with access to a safety net in the event they experience a financial emergency and helps them to manage their finances more effectively.
As a trusted provider of revenue enhancement solutions, JMFA has implemented more than 2,000 customized program installations for financial institutions throughout the U.S. As a result, in addition to experiencing non-interest income increases from 50 to 300 percent—in many cases far exceeding their expectations—our clients maintain total compliance with all regulatory expectations.
Cultivating what you have leads to long-term growth
Remember, it costs less to keep your existing account holders than to acquire new ones. And adding new accounts may not result in growth, if account holders don’t use the services you provide.
Whatever your growth strategy might be, make sure that you are optimizing the business potential of your existing account holders by effectively communicating your products and services. The more you enhance the account holder experience, the more they benefit. And when people are satisfied with their experience, they are much more likely to share it with friends and family—which can result in an inexpensive and effective way to grow.
ABOUT THE AUTHOR
Richard Miller joined JMFA after a 23-year career in banking, providing a broad base of management experience in community banking, from chief lending officer to president of small and medium-sized financial institutions. Richard supervises JMFA’s national sales activities, establishing valued relationships and helping JMFA and its financial clients achieve their goals.
For the past 38 years JMFA has been considered one of the most trusted names in the industry helping community banks and credit unions improve their performance and profitability. Whether it’s recovering lost revenue, uncovering savings opportunities, serving your account holders better, finding the perfect personnel fit or delivering a 100% compliant overdraft program, JMFA has the right solutions to help you not only meet, but exceed, your goals. We are proud to be a preferred provider among many industry groups. To learn more contact us.