Opportunities for Credit Unions of All Sizes in 2022
With two years of pandemic now in the past, credit unions of all sizes are looking at the opportunities in 2022. The economy, job market, interest rates, and inflation all play a part in the prospects for relationship building and growth.
(1) Support Members Looking to Rebuild Their Credit
In the last two years, some credit union members experienced a hiccup in financial stability, and many of those members are now interested in recovery by rebuilding their credit.
This rebuilding period in members’ lives is an opportunity for credit unions to really re-establish and cement strong relationships. A percentage of members in delinquency or charge-off wants to rebuild their credit worthiness. With strong support from credit union staff through credit education, regular contact and advising, those members have a chance at regaining financial credibility at the same time they are forging those connections with their financial institution.
(2) Forecasted Interest Rate Increases
In an attempt to fight rising inflation, the federal reserve has suggested raising interest rates throughout 2022.
“Short-term interest rates will rise along with the federal funds rate. Home equity line of credit rates are typically connected to the federal funds rate, and move in lock-step. Short-term consumer borrowing rates will also be affected. Auto loan rates may rise, but to a lesser degree.
Long-term rates, such as for mortgages, are not directly affected when the Fed raises short rates, but may follow short rates higher because of the current inflationary environment.” – https://www.kiplinger.com/economic-forecasts/interest-rates
In 2021, credit unions experienced healthy borrowing from members, but the total loan portfolio was often offset by the volume of refinances and payoffs.
The opportunity for credit unions now in 2022 is the potential for growth by maintaining momentum on loan production as interest rates creep upwards.
(3) Going Digital
Over the last two years, digital technology has catapulted us all into a new way of living. It has allowed so many of us to work from anywhere, to do our grocery shopping, to meet with doctors and to manage our financial lives all virtually.
For credit unions now is the time more than ever when consumers are embracing technology. This is an opportunity to be available wherever and whenever members need their financial institution.
Through chat, remote banking, mobile apps, even the ATM, giving members so many avenues to connect with their credit union, they aren’t limited by branch hours. It’s an opportunity to be connected with members 24 hours a day, 7 days a week.
Let’s Talk About Your Credit Union in 2022
We are here to help you in 2022, through advising on operations, developing and training staff, and audit and compliance support. Give us a call to talk about your 2022 strategies.