Industry Trends: Member Relationships (4Q19)

Virtually every credit union relationship metric is up over the past 10 years and market share has also expanded in all major loan categories. But the industry is increasingly deploying different operational techniques to further encourage stickier relationships.

Since the end of the Great Recession, the financial industry has struggled to regain consumer trust, and with it, their wallet share. Consumer retention has become the pinnacle of member relationships across U.S. financial institutions. A recent Galluppoll notes that millennials, the largest segment of the labor force, are almost three times more likely to change their primary financial institution than baby boomers. As a result, institutions across the country are changing their strategies tofocus on retaining this member demographic. Credit unions and others are increasingly deploying different operational techniques to entice consumers to engage in stickier relationships.

Key Points

  • Credit union membership grew 3.6% in 2019. At year-end, credit unions served 121.7 million members.
  • The average member relationship increased 3.3% annually and approached $19,500 at the end of 2019. The average share balance per member grew 4.4% annually, whereas the average loan balance (excluding business loans)rose 1.9%.
  • Penetration across a range of products continued to expand at U.S. credit unions. Share draft penetration used to gauge whether a credit union is a member’s primary financial institution is up 4.9 percentagepoints over the past five years to 58.8%.
  • Credit unions originated 34.1 million loans in 2019 more than any year on record as cooperatives nationwide offer desirable lending solutions to members.
  • Credit unions are rewarding member relationships with higher dividend payouts. At year-end 2019, credit unions paid an average of $100 per member in the form of dividends, up $29 year-over-year.

MEMBER GROWTH

FOR U.S. CREDIT UNIONS | DATA AS OF 12.31.19
Callahan & Associates | CreditUnions.com

Total membership nationwide was up 3.6% year-over-year and surpassed 121.7 million at year-end 2019.

PENETRATION RATES

FOR U.S. CREDIT UNIONS | DATA AS OF 12.31.19
Callahan & Associates | CreditUnions.com

Credit unions have engaged members with strong product offerings. Consequently, penetration is at all-time highs in most major categories.

DIVIDENDS PER MEMBER

FOR U.S. CREDIT UNIONS | DATA AS OF 12.31.19
Callahan & Associates | CreditUnions.com

The average annual dividend per member has nearly doubled in the past five years.


The Bottom Line

Members have deepened their credit union engagement during the past decade. Virtually every relationship metric is up over the past 10 years and credit union market share has also expanded in all major loan categories. Additional liquidity from CDs haspositioned credit unions to continue serving members into the new decade.

This article appeared originally in Credit Union Strategy & Performance.

April 16, 2020

Keep Reading

View all posts in:
More on:
Scroll to Top
Verified by MonsterInsights