800-809-2307
Four Letters. Infinite Potential.

The Disconnect Between Adding New Accounts and Increasing Revenue

By Richard Miller
Executive Vice President

According to Call Report data, between 2012 and 2015 the number of credit union checking accounts rose from 46,612,471 to 57,135,397 – an increase of 23 percent. This says a great deal about the level of trust and value consumers place in credit unions. However, this increase in checking accounts is actually masking a serious decline in fee income per account for many institutions. Overall, fee income only increased by six percent over the same time period, meaning that credit unions actually lost $1.70 per account per month in fee income; making the loss to the industry a staggering $1.168 billion. This number does not include the increased expense of servicing the new accounts.

As the financial services industry continues to struggle with low interest rates, along with decreasing income-producing opportunities – such as the potential loss of interchange income – and the rising costs of technology and maintaining compliance, simply acquiring more member accounts doesn’t automatically translate into generating the revenue necessary to thrive. In fact, it can cost you in terms of staffing, data processing and facilities.

For instance, CUNA’s latest Regulatory Burden Financial Impact Study found that compliance costs for credit unions were $7.2B in 2014 – $1.7B higher than what the costs would have been without the regulatory changes that occurred from 2010 to 2014. According to the study, because compliance includes so many fixed costs, the financial impact hits small credit unions three times as hard as large ones.

The good news is – memberships are expected to increase 3.1 percent this year But credit unions must sharpen their focus on how to boost the earnings they can expect from the growing member base in order to reap the full benefit of this anticipated gain.

Elevate results and provide better service
One proven way to improve revenue is by implementing a results-driven overdraft program. In addition to providing a healthy revenue source for your credit union, overdraft income can help to offset the high costs of addressing increased regulatory expectations. Plus, a fully disclosed program can strengthen member relationships with a valuable service that helps them to manage their finances more effectively.

As a trusted provider of revenue enhancement solutions, JMFA has implemented more than 1,600 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 have been able to provide a higher level of service to their members, update their technology and introduce products that have helped them to remain competitive in their market. All while maintaining total compliance with all regulatory expectations.

Overdraft services fill economic needs of credit unions and members
Although the economy continues to improve, the earnings outlook remains challenging for many credit unions. So while forecasts continue for increasing membership numbers, now is the perfect time to implement a fully compliant overdraft solution that benefits your credit union and your members – both current and future.

View more related articles

Get a free assessment of your program

Learn more about JMFA OVERDRAFT PRIVILEGE®

 

 

 

100% 12 months 2020 2020 vision 40 years abusive abusiveness Academy account holder account holder retention account holder strategies account holder strategies; growth strategies; account holders accountability Achieve achievements Advancements Advice Agreement alerts analysis Analytics announcement ask the expert Assistance ATMs Attendees attorneys attracting talent auto loans Automation B2B Balance Bank Bank of Pacific Banking banking services banks banks and credit unions batching Benefit best practices board governance board member board of directors Bob Layendecker bottom line branch equipment branch profitability branding Bryan Hanks budget budgets bundling business business culture business environment business practices business processes business strategies calendar career advice Career Goal CARES Act case studies Case Study CDC CEO CEO onboarding certainty CFPB Challenges change charitable Checklist Cher Cheryl Lawson Choose Chris Karstens claim clarity class action class-action lawsuit Classroom clients Cloud Cohron collections CommFirst Federal Credit Union commitment committed Communication communications communities community community banks Community Outreach Referral Program Competition Competitive Complaint Compliance compliance examinations compliance risks compliant condition conduct Conferences connection Consistency Consistent consultant Consultation consulting Consumer Consumer FInancial Protection Bureau consumer protection Consumer-focused Consumers Contingency Contingency Pricing contingency-based contingency-based fees Contract Contract Analysis Contract Negotiation contract negotiations contract negotiator Contract Optimizer Contract Renegotiations contract review contract staffing Contracts Convenience core processor contracts Cornerstone Credit Union League coronavirus corporate culture corporate governance costs Courtesy Pay COVID-19 CPE credits Credit Card credit card contracts credit card processing credit cards credit report Credit Union Credit Union Vendor Management credit unions crisis Crissandra Fry CSS culture customer customer experience customer service CUVM cyber security Damian Data Data Analytics database Deal debit debit card contracts Debt deceptive Decisions Demand Letters Department of Labor Deposit deposits Development Dick Miller digital directors Disclosed disclosures discounts Discussion Dodd-Frank Act dollars donation Donna Sumrall Dynamic economy Education efficiency studies election Email Emergencies Emergency employed employee employee retention employees EMV migration enforce enforcement Engagement Errors evaluation Evolve executive search Expectations Expense expense management expense reduction expenses Experience Expert expert negotiations expertise Experts expire Facilitators families FastTrack FDIC Federal Reserve Federal Reserve Board fee Feedback fees Financial Financial Institution financial institutions financial services financial stability Financial Worry FinTech Fixed limits Fixed-limit Floyd's Forum Forrester Free Analysis full disclosure Fully Fully Disclosed fully disclosed overdraft program funds Gen Z Generating Income generating leads generation Generation Z Gift global Goals governance government government agencies Grow Gym Halloween Hammond Happiness health hiring HKW Holiday Holidays Houston Area Food Bank Houston Livestock Show and Rodeo HR HR policies Hubur human capital human resources Implementation important Improved improved efficiencies improved results Inc. income income enhancement Industry Innovate Innovative Institution interests internet banking services interview strategies interview tips IT contracts Jackson Jai Jai Darden James Jamone Moore Jan Southern Jennifer Peoples Jennifer Simmons Jim Griffis Jimmy Nguyen JMFA JMFA Academy JMFA clients JMFA News JMFA Next Generation Overdraft Privilege Joe Marsh John Cohron John M. Floyd John M. Floyd & Associates judicial justification Kelli Silvernale NCUA Kelly Flynn Kennedy knowledge law lawsuits Lawyer leaders leadership Learn Learning Legal legal risk legislative lending program Lesson leverage Limit Limits Literacy litigation litigators lives loans local Long Term Long-Term lost revenue Maggie Thompson Maintenance manage Managed management Mark Roe marketing marketplace Mary Soergel Matrix Matrix-based measurable measurable results meeting Member Members Midwest Region Millennial Millennials mindset minimalism minimalist Mississippi Missouri Mobile Banking Model monetary Money Morrison & Foerster Partner mortgages Most Valuable Provider NAFCU NCUA negative balance Negative Settlement Negotiate negotiating contracts negotiator Net Operating Analysis New Decade new revenue New Year New Year's Next Generation JMFA Overdraft Privilege NOA Non-Compliant non-disclosed Non-Interest Income NSF NSF fees Obrea Poindexter OCC Officer Oliver Ireland onboarding Online Opportunities Opportunity Opt-In organization Organizational Health Outcomes outsourcing Overdraft overdraft compliance overdraft coverage overdraft fees overdraft practices Overdraft Privilege overdraft privilege program overdraft program Overdraft programs overdraft protection programs Overdraft Protection Service overdraft service overdraft services overdraft strategy overdrafts overdrawn Overspending pandemic Partner partnership Paul McFarland paycheck emergency payday loans Payments Pennsylvania performance personnel physical distancing plan planning Plus4 Credit Union podcast policies Policy POS Positive Swipe practice practices Press Release Privilege Manager CRM proactive procedure process process improvement Processing product profitability Productivity Products Professional Profitability Improvement Program Program Management programs prohibited project staffing Promotions Proposals Provider providers PwC Quality quantity Reactive reality Recruitment Services recruitment strategies reduce expenses refer referral Reg E regional director regulation Regulation E regulations regulators regulatory relationship Relationships remote Renegotiate Renewal Reporting Reputation resolutions Resources Results Retail Retaining Employees Retention Retirement revenue revenue enhancement review Richard Miller risk risks ROI Ron Jennings Roy Roy Seifert Rules Ryan Armstrong Sales Salesforce Satisfaction savings Scrutiny secrets Security senate Senior Relationship Manager service service agreements service contracts service delivery Services Sessions settlement shareholders Sheila Bridges Shopping social distancing Social Events social media Software Solution specialization Spending staff staff development staff spotlight staff training staffing staffing gaps staffing studies staffing study stakeholders standard Statistics stimulus payments Strategic Planning Strategies Strategy streamline Stressful succeed Success success factors Succession plan succession planning Support survey Susan Prell system talent team team members technology technology costs technology upgrades technology utilization temporary staff term Text Third-Party Expert third-party providers third-party vendor contracts third-party vendors threat three Tim Strandquist Time Tools Tracking Trainer training transaction Transparency Transparent Travel Treats trends Trey Martin Trust UDAAP uncertain times unemployment unfair updates Upgrades Value Variable Variable Limits Vendor vendor agreements vendor contract negotiations vendor contracts vendor management services vendor performance vendors video violation volunteer Walker Washington Washington Savings Bank Webinars weeks Westmoreland Community FCU Whitney & Company Wish list women work Workshops YouTube