X

Blog

30Sep

Budget Challenge: Meet Credit Union Strategic Goals, Innovate AND Keep The Lights On

budget-season-challenge-meet-credit-union-strategic-goals.jpg

Members are the driving force behind all your credit union’s activities, and that’s understandable. Not only does your business strategy focus foremost on fulfilling their needs, but with directors who are members it’s a given that member interests will be top of the priority list. That makes your credit union budget strategy different from that of a for-profit bank, in the following ways:

  1. Operational costs take precedence in your funding. Balancing the budget is an important issue for member boards, even if they aren’t personally liable for any shortfalls incurred.
  2. Member enhancement initiatives are vital, to show your board is doing its job and looking after the interests of the membership.

Generating a profit often gets left on the back burner. Isn’t it time your CU stopped being on the back foot, and started being more sustainable? Don’t you owe it to your members to strategize ways to allow for growth, instead of survival? Here are some options you can consider that help you do so.

Generating An Operating Reserve

Profit isn’t necessarily a bad word, but in the event your directors don’t agree you can call it a surplus or an operating reserve. The latter is particularly useful if your credit union budget strategy includes payment of cash bonuses to members at the end of the fiscal year. Board-designated operating reserves offer a number of advantages for members, including:

  • The ability to meet the CU’s strategic goals
  • Innovation opportunities to keep pace with technology, such as updating the core banking platform
  • Long-term financial stability
  • Sufficient funds to ensure comfortable cash flow on a day-to-day basis
  • Ability to make planned capital purchases, such as equipment and infrastructure
  • Investment opportunities, such as commercial real estate purchases

All these benefits can be a major factor in the growth of your CU, and can improve the agility of your management processes. In turn, that agility empowers you to tackle new opportunities with the vigor needed to keep pace with developments in your market.

Download our Budget Season Strategy Guide for more information on how to adapt your credit union budget strategy to offer your CU the chance to be the best you can be.

 

 

 

About the Author

John Best

John Best

CEO

Best Innovation Group

John Best is recognized as a thought leader and visionary of technology advancements and financial application development within the credit union industry.

Related

Credit Unions Should Be Thinking Top Of App Instead Of Top Of Wallet

The widespread use of smartphones and the Internet is changing the way a lot of people live their li...

Read More >

Interchange Income And The Dodd-Frank Act: What’s Happened So Far And What Lies Ahead

The Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted in response to the financi...

Read More >

Who Do You Trust? Would Your Credit Union Members Say It Is You?

Be it in our personal or professional lives, relationships are built on trust. Although services and...

Read More >

Why CU Member Education Is A Gateway To Member Retention

Stats from the Credit Union National Association (CUNA) show a high percentage of members don’t ful...

Read More >
A Credit Union's Biggest Cultural Challenge: Its Smart Use Of Data

A Credit Union's Biggest Cultural Challenge: Its Smart Use Of Data

Many credit unions are successfully building the fundamental skills and infrastructure they need to ...

Read More >
2018 AXFI Conference: Big Ideas, Big Data, And Big Fun

2018 AXFI Conference: Big Ideas, Big Data, And Big Fun

There’s a reason that in just five short years the AXFI Conference has grown from less than 50 atte...

Read More >