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:

1. Interactive Teller Machines (ITMs): These advanced ATMs allow members to interact with a live teller via video, providing a personal touch.
2. 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.
3. 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.
4. 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.