What should your credit union budget for in 2025?

As we enter the fourth quarter, many credit union leaders are starting to turn their attention toward planning for 2025. With a myriad of options and new technology, it’s crucial to prioritize services that set credit unions apart while encouraging growth.

In this article, we explore several key areas credit unions should consider when preparing their budgets for the coming year.

Expanding membership

One significant trend shaping the financial landscape is the exodus of big banks from rural communities. This presents a golden opportunity to expand membership to new communities.

However, this expansion doesn’t necessarily require traditional brick-and-mortar branches. Credit unions can leverage technology to provide services efficiently and cost-effectively. Some alternative service delivery methods include:

Interactive Teller Machines (ITMs): These advanced ATMs allow members to interact with a live teller via video, providing a personal touch.
Expanding ATM access: Branded ATMs, such as full-service drive-thru ATMs in parking lots of busy businesses, can play a crucial role in serving members’ basic banking needs and attract new members.
Smaller, modern modular branches: These affordable, portable branches are versatile and durable and offer a quick and efficient way to market for credit unions moving into new areas or those wanting to cut costs and close traditional branches.
Digital banking services: Beyond the mobile app, technology advances now allow credit unions to offer digital banking solutions that include live video, chat and virtual assistants’ members can access through QR codes.

By incorporating these technologies, credit unions can extend their reach without the substantial overhead of traditional branches, allowing them to serve members in new areas more efficiently. And by partnering with a reliable vendor expanding ATM access or adding ITMs, and digital banking solutions are affordable and don’t need to be time consuming for staff.

Enhancing branch efficiency with teller cash recyclers

For credit unions maintaining physical branches, investing in Teller Cash Recyclers (TCRs) can significantly improve operational efficiency. TCRs offer several benefits such as improved cash security, increased accuracy and speed, and freeing up branch staff to focus on personalized member service and cross-selling products and services.

Embracing virtual banking

To stay competitive, credit unions should consider incorporating advanced interactive technologies into their service offerings in 2025. Beyond the mobile app or the ITM, there are a variety of digital solutions like virtual assistants, mobile chat features, and QR code-based marketing available today.

Virtual assistants provide members with easy access to get answers to their questions 24/7. QR code marketing can generate faster connections with members. These handy codes can be used to quickly direct members to specific product pages or applications, providing instant access to promotional offers or facilitate easy sign-ups for new services.

However, QR codes aren’t just useful for marketing. They can also link to virtual branch solutions, which provide ITM-level capabilities without substantial capital investment. Some benefits include:

Video calls: Give members the personalized assistance they crave without having to come into a branch.
Live chat: Allow credit union representatives to offer financial advice or answer questions.
Translation services: Provide an easy way to speak to members that may not speak English as a first language without any miscommunication issues.
Advance level marketing: By using a customized QR code, marketing can direct consumers to loan applications and easily track the effectiveness of promotions.

By adopting these technologies, credit unions can enhance member engagement and provide convenient, 24/7 access to services.

Diversifying income streams

As interest rates remain higher, it’s prudent for credit unions to add non-interest avenues of income to their portfolio. Partnering with vendors that offer merchant services, smart safes and ATMs can open new revenue streams while providing additional services to business members, attracting new accounts and deepening existing relationships—without additional work for staff.

Leveraging NCUA grants

Low-income designated credit unions have a unique opportunity to access grants through the National Credit Union Administration (NCUA). These grants can be instrumental in adding ITMs or expanding ATM access—helping to meet the needs of a growing number of citizens.

Some independent ATM operators even offer valuable assistance in this area such as helping to navigate complex paperwork and, of course, handling the ongoing operation of ATMs and ITMs. This support can make advanced technologies more affordable for credit unions with limited resources.

As credit unions prepare their budgets for 2025, it’s essential to balance traditional services with innovative technologies and partnerships. By focusing on expanding into underserved areas, embracing interactive technologies, improving branch efficiency, diversifying income streams and leveraging grants, credit unions can position themselves for growth and enhanced member service in the coming year.

Remember, the key to successful budgeting lies in aligning financial decisions with the credit union’s core mission of serving members. By carefully considering these investment areas, credit unions can ensure they’re not just keeping pace with the changing financial landscape but leading the way in member-focused banking services.

Comments

Growing Your Credit Union Without Expanding Your FOM

For many firefighter and other credit union primarly serving first responders, growth often feels tied to one big decision: expanding the Field of Membership (FOM). But what if you didn’t have to? What if growth could come from within —by deepening relationships, increasing engagement, and capturing more of the financial lives of the members you already serve? The truth is: it can. But it requires a shift in strategy. Rethinking What “Growth” Really Means Most institutions define growth as adding more members. But for single-sponsor credit unions, especially those serving first responders, a more powerful definition is: Growth = more value per member Many members only use one or two products—often a checking account and maybe an auto loan. Meanwhile, larger banks capture mortgages, credit cards, and investments. The opportunity isn’t just new members. It’s: More products per member Higher balances per relationship Greater share of wallet Your Biggest Advantage: The First Responder Life...

Read Complete Article HERE>»

When Vendors Price for Giants

Grant Sheehan CCUE | CEO Opinion: When Vendors Price for Giants, They Shrink the Future of Small Credit Unions ! There’s a quiet squeeze happening in the credit union industry, and it’s not coming from regulators or competition from big banks. It’s coming from the very vendors that claim to support the ecosystem. For small credit unions, the problem is increasingly simple and factual: the tools required to compete with digital banking platforms, fraud systems, compliance software, analytics, and payments infrastructure are priced for institutions ten or even 100 times their size. The result is a market where access to essential services is determined not by mission or member need, but by asset size. This isn’t just inconvenient. It’s structurally threatening. Vendors often defend their pricing models as a reflection of complexity or scale. Larger credit unions have more users, more transactions, more integrations, so they pay more, and that seems fair on the surface. But t...

Read Complete Article HERE>»

Fed still holds off on rate increase | 2015-07-30 | CUNA News

WASHINGTON (7/30/15)--Citing “moderate” economic expansion, the Federal Open Market Committee continues to do “a balancing act,” said CUNA Senior Economist Perc Pineda. The Federal Reserve’s monetary policy-making body completed its meeting Wednesday without edging up the federal funds interest rate. Fed Chair Janet Yellen has said the committee will opt for an interest-rate increase sometime this fall. The July meeting, however, was not the time. “The Federal Reserve continues to do a balancing act: the U.S. economy is not in a recession and definitely not overheating,” Pineda told News Now . “Changes in monetary policy after all are meant to influence an underperforming or an overheating economy.” Household spending growth has been moderate, and housing has shown additional improvement, the committee said. Labor conditions continue to improve with declining unemployment and solid job gains. Inflation is anticipated to remain near its recent low level in the near term,...

Read Complete Article HERE>»

Credit Union Lending Picks Up in Most Areas

Credit unions were increasing their portfolios in most areas in June, except business lending and new car loans, where portfolios fell for the 24th month in a row after seasonal adjustments, according to a CUNA Mutual Group report released Tuesday. The Madison, Wis., trade group’s Credit Union Trends Report showed new auto loan balances were $141 billion on June 30, falling at a 3.3% seasonally adjusted, annualized rate from May to June, part of the May-through-October peak car-buying season. Credit unions held $252.4 billion in used car loans on June 30, up 1.2% from May without seasonal adjustments. The Trends Report made slight adjustments to CUNA’s Monthly Credit Union Estimates released earlier in the month. In this case, its changes allowed total auto loan balances to show a slight 0.3% un-adjusted May-to-June gain, compared to being flat in the CUNA report. Steve Rick, chief economist for CUNA Mutual Group and the report’s author, said gains were stronger in other areas, includ...

Read Complete Article HERE>»

The FedNow Service will launch in 2023 "Are you ready?"

The FedNow Service is a new instant payment service that the Federal Reserve Banks are developing to enable financial institutions of every size, and in every community across the U.S., to provide safe and efficient instant payment services in real-time, around the clock, every day of the year. Through financial institutions participating in the FedNow Service, businesses and individuals will be able to send and receive instant payments conveniently, and recipients will have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments. Consistent with the Federal Reserve’s historical role of providing payment services alongside private-sector providers, the FedNow Service will provide choice in the market for clearing and settling instant payments as well as promote resiliency through redundancy. Financial institutions and their service providers will be able to use the service as a springboard to provide innovative instant p...

Read Complete Article HERE>»

Rick Metsger reminded credit unions the National Credit Union Share Insurance Fund may be required to increase loss reserves as the values of taxi medallions decline.

A LEXANDRIA, Va. (Dec. 8, 2017) – National Credit Union Administration Board Member Rick Metsger today reminded credit unions the National Credit Union Share Insurance Fund may be required to increase loss reserves as the values of taxi medallions decline. “Prices for New York taxi medallions at two recent public auctions have been considerably lower,” Metsger said. “That, combined with a continued increase in already high delinquency rates on medallion loans, suggests the Share Insurance Fund’s reserves may have to increase in the very near future.” Metsger spoke today to the Oregon Department of Financial Services CEO roundtable in Salem, Oregon. His remarks covered various issues related to credit union regulation and the Share Insurance Fund. Metsger said the NCUA issued a Letter to Credit Unions in 2010, warning of concentration risk , and the agency issued a more specific letter on taxi medallion lending in 2014 . “We have known, and warned ...

Read Complete Article HERE>»

Facial recognition to secure payments will exceed 1.4 billion globally by 2025

BASINGSTOKE, U.K.– The number of users of software-based facial recognition to secure payments will exceed 1.4 billion globally by 2025, from just 671 million in 2020, according to a new study from Juniper Research. “This rapid growth of 120% demonstrates how widespread facial recognition has become; fueled by its low barriers to entry, a front-facing camera and appropriate software,” Juniper said, noting the research identified the implementation of FaceID by Apple as accelerating the growth of the wider facial recognition market, despite the challenges to facial recognition during the pandemic with face mask use. The research recommends that facial recognition vendors implement robust and rapidly evolving AI based verification checks to ensure the validity of user identity, or risk losing user trust in the authentication method as spoofing attempts increase, Juniper reported. Fingerprint Sensors The new research, Mobile Payment Authentication: Biometrics, Regulation & Market Fore...

Read Complete Article HERE>»

Credit unions lending rose at a faster pace in most sectors than the small banks last year, according to data released this week by the FDIC and CUNA Mutual Group.

What credit unions lacked in size they made up for in speed compared with community banks and savings institutions in 2017. Credit unions lending rose at a faster pace in most sectors than the small banks last year, according to data released this week by the FDIC and CUNA Mutual Group. CUNA Mutual’s monthly trends report showed credit unions held $984.8 billion in total loans at Dec. 31, up 10.7% from a year earlier and a growth rate more than twice as fast as community banks. Credit union assets rose 6.3% to $1.4 trillion due to a 6.3% increase in deposits, a 3% drop in borrowings and a 7.7% increase in capital. With loan balances growing faster than assets, the loan-to-asset ratio ended 2017 at 70.4%, up from 67.5% a year earlier. The fast loan growth also helped loan delinquency rates fall to 0.79% in December, down from 0.83% a year earlier, according to CUNA Mutual. The FDIC’s Quarterly Banking Profile showed loans at the nation’s 5,670 community banks ...

Read Complete Article HERE>»

Don't say NO to your members anymore!

Does the following scenario occur at your credit union? If it does, we have a solution for you! A member comes in into your credit union and wants to know if you will loan them a couple of hundred thousand $$$ to buy a building, or can you loan him some seed money to start a new business or purchase equipment for the company they currently own, and you say, “the credit union doesn't do those kinds of loans”. Does this sound familiar? How many times do you and your staff say NO and literally tell a member to “go down the street or go somewhere else” ? Well, now, you have another option. CU First Responders Finance (CUFR) CU First Responders Finance, LLC (CUFR) is a partnership between the National Council of Firefighter Credit Unions, Inc. (NCOFCU) , and Biz Lending & Insurance Center, Inc. to provide business lending origination programs to NCOFCU member credit unions. CUFR will provide you with a turnkey operati...

Read Complete Article HERE>»

Americans are using alternative financing arrangements, such as rent-to-own

CUToday PHILADELPHIA–Many Americans are using alternative financing arrangements, such as rent-to-own, that a new report from Pew Charitable Trusts indicates are generally riskier, more costly, and subject to far weaker consumer protections and regulatory oversight than traditional mortgages. Pew Trusts sad the “evidence suggests that a shortage of small mortgages, those for less than $150,000, may be driving some home borrowers (i.e., people who purchase a home with financing) who could qualify for a mortgage into these alternative arrangements. And other factors related to a home’s habitability and the ownership of the land beneath a manufactured home—the modern version of a mobile home—can make certain homes ineligible for mortgage financing altogether.” According to Pew, the evidence of potential consumer harm, little is known about the prevalence of alternative financing in the U.S., primarily because no systematic national data collection exists. Pew said approximate...

Read Complete Article HERE>»

First-responder Credit Union Newsroom

Search This Blog