E-Signatures in your Credit Union: a Win-Win

As technology advanced over the years, more businesses and industries have begun adopting innovative solutions – document management, mobile aps, workflow automation, etc. – to their unique challenges, and electronic signatures are just one of these technologies.  Although e-signatures aren’t new – telegraph signatures date back to the mid-1800s – Electronic Signatures in Global and National Commerce, which made electronic signatures as legal as physical signatures, played a big part in increasing the comfort level in adopting these solutions. And since credit unions are certainly not lacking in their own unique challenges, it is not surprising that the most forward thinking of these organizations have adopted e-signature solutions. Meeting regulation and compliance requirements becomes much easier with e-signatures. Electronic signature technology actually enhances security, not degrades it; confidential information is better protected and electronic signatures typically involve passwords, tokens and audit trails for an added level of protection. Printing, shipping [Read More...]

Knowing Your Customer Is Essential for Loyalty and Profitability

Many Community Banks and Credit Unions provide a great service to the community in the form of free checking accounts.  And many in the Community Bank and Credit Union sector are rightfully proud of their contribution and support of the community. Unfortunately, the big win for consumers results in a huge loss for Banks and Credit Unions which jeopardizes the viability of the very institutions providing the service.  The reality is that most consumers do no need or want anything more than a checking account (accompanied by a debit card and perhaps direct deposit & bill pay).  These limited set of products require substantial scale before a provider can generate economies of scale to produce a profit; and by definition, this excludes Community Banks and Credit Unions.  Because of this, most Community Bank and Credit Union customer relationships result in recurring, non-recoverable annual operating losses. Understanding this, Community Banks and Credit Unions [Read More...]

The Big Shift by Brett King

Brett King discusses how customer behavior and technology are changing the future of financial services. The reality will challenge the thinking of traditional Bankers through a discussion of topics including: · Why customer behavior is so rapidly changing, including the four phases of disruptive change; · How community financial institutions and their branches must evolve; · Why checks are rapidly disappearing and cash is next; · Why your mobile phone will replace your wallet in the next 2-3 years; and · How financial institutions must reinvent themselves or become irrelevant    

Revenue Growth & Customer Loyalty Depend on Strategy

Net Interest Margin (NIM) woes facing Banks and Credit Unions will continue following the trend established in 2012, especially given that the FED announced that the period of ultra-low rates will continue until unemployment rate falls below 6.5%.  An optimist will tell you that is at least 3 years away; a realist will set your expectations closer to 2018. The challenges facing Banks and Credit Unions will remain similar (hopefully not worse) than what we experienced in 2012 until the economy recovers, until rates climb again, and until the loan demand returns.  Shrinking Revenues, including NIM, is driven by lackluster loan demand and ever greater competition for the business resulting in lower rates, and lower loan fees (and less restrictive loan covenants). Like never before, Bankers are forced to find alternative revenue generating sources and many are struggling… resulting in weaker Community Bank and Credit Union brand values, less attractive value [Read More...]

To TAG or not to TAG

Should Community Bankers care about TAG!? Do they need it?  Do they use it?  Some would have you believe that TAG, and its renewal are central to the survival of Community Banks… without it, deposits would evaporate… Luckily, that isn’t the case.  Not at all.  Just take a look at FDIC Quarterly Banking Profile report for 3rd Quarter 2012. Data shows that Community Banks use TAG to insure just $50 billion of deposits (~3% of the total TAG deposits), with a typical Community Bank insuring an average of just 17 accounts.  Not surprisingly, the primary users of TAG are a small number of very large banks… just 108 banks to be precise that cumulatively hold more than 90% of the TAG insured deposits. Should Community Bankers care about TAG?  Is it important to their business?  The numbers very clearly demonstrate that TAG is only important to 108 large banks.  Community [Read More...]