Going it Alone or in a Cooperative Business, CUs Are Expanding Member Service

As credit unions expand their range of capabilities and services, the decision to take on a business initiative by themselves or as a participant in a multi-institution effort has strategic consequences for their organizations. Issues that must be considered as part of the evaluation process for such initiatives include:
  • The importance of developing an internal knowledge base around certain products, services or business models;
  • The amount of control over the direction of the business that is needed by the credit union;
  • The capital necessary to deliver a product or service that can meet both the short and long term objectives of the organization; and
  • The return and payback period hurdles that must be cleared in order for it to be a worthwhile endeavor for the credit union.

 
 

As credit unions expand their range of capabilities and services, the decision to take on a business initiative by themselves or as a participant in a multi-institution effort has strategic consequences for their organizations. Issues that must be considered as part of the evaluation process for such initiatives include:

  • The importance of developing an internal knowledge base around certain products, services or business models;
  • The amount of control over the direction of the business that is needed by the credit union;
  • The capital necessary to deliver a product or service that can meet both the short and long term objectives of the organization; and
  • The return and payback period hurdles that must be cleared in order for it to be a worthwhile endeavor for the credit union.

While credit union executives may differ in the relative importance they assign to these issues, ultimately the decision rests on which strategy will have the most positive impact on their membership.

Going It Alone
According to the latest data published in Callahan's upcoming Directory of Credit Union Cooperatives, there are over 600 wholly-owned CUSOs. For these credit unions going it alone, the most popular services offered to members are Investment Services and Insurance Services with Mortgage Processing following in a distant third place. The graph below depicts this breakdown of services offered.

 

 

 

April 21, 2003


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