By Doug True
As you are fully aware, the hot conversation in credit union land is the Wings Financial CU unsolicited merger attempt with Continental FCU. Some of the conversations I have been listening to have centered on the spirit of sharing among credit unions and how such situations can place a damper on this sharing. I would like to think that our 2nd annual Lending Blueprint Workshop at FORUM Credit Union was a beacon of positivity for such sharing of information among credit unions. Nine credit unions representing more than $3.5 billion in assets and 364,000 members participated in the workshop at the FORUM Conference Center recently. The purpose of the gathering was to help each other better serve our members’ lending needs both today and tomorrow. Sharing best practices, shaping new lending strategies, lending scorecards, and ideating on future lending trends were the outcomes.
The workshop started with the sharing of our “pain triangles” in the lending world. In this exercise, participants listed their No. 1 lending priority (center of triangle) and three factors that play a significant role in improving this priority. A visual example is as follows:
In this example, the credit union’s primary focus is growing the loan portfolio. They recognize that they can do a better job of cross-selling, they are in a position where they can accept more risk in their portfolio and they are aware that they need to diversify their portfolio of lending products. With this visual representation, the credit union can now begin wrapping strategies and action plans around the three areas of focus to spur loan growth. The up-front contract with blueprint workshop participants was that they walk away with two implementable ideas to make measurable gains on the situation at the center of their triangle. In the case of the credit union featured above, they were now planning on using the research we discussed on pay-day lending alternatives to explore this product offering in more detail. and they were going to use the Boston Consulting Matrix concept in evaluating their product mix to potentially find some new product offerings to diversify their portfolio.
Some of the other triangles at the workshop were as follows:
- credit card growth | competition, need for a higher yield, and loan goals/accountability;
- loan profitability | cross-selling, coaching, need for more non-interest income;
- higher loan-to-share | participations, product diversification, staff training;
- loan promotion | personnel, training, competition;
- loan growth | competition, cross-selling, target marketing;
- loan quality | collection efforts, underwriting, environment; and
- organic growth | loan quality, cross-selling, member growth.
As you can see, some real commonalities among the participants. The day was spent on providing tools and best practices that can help improve these situations. Tools featured in the workshop included:
- pain triangle – planning;
- creation of lending scorecard/dashboard;
- tracking relevant benchmarking data
- assessing key delivery channels;
- Boston Consulting Matrix;
- Blue OceanStrategy;
- calculation of product profitability;in
- ingredients for an effective incentive structure and
- assessing future lending trends.
In the spirit of collaboration this one-day investment can help us better serve the 364,000 members represented and hopefully add to this total.
Doug True is president of the FORUM Solutions CUSO and SVP/lending/technology for $985 million FORUM Credit Union, Indianapolis. Read more of his thoughts on lending, credit unions and innovation in his True Story blog.
