Social Media is it a Strategy For Credit Unions

Posted: February 10, 2011 in Credit Unions, Social Media
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Social Media adoption is severely lacking at smaller Credit Unions and putting them further behind as each day passes. In this fast paced business world, one can no longer stand idly by and expect business to run on autopilot. Those days are gone.

If the smaller Credit Unions expect to grow and survive, then they MUST adopt Social Media. This will allow them to engage their customers, fulfill their needs, improve their brand, and expand their reach.

“For social media marketing to have a major impact on profitability, credit unions must invest a significant percentage of their marketing budgets into social media.”

Credit unions on average invest only a paltry 2% of their total marketing budget on social media, although those figures are a bit skewed because nearly half of these institutions said their social media spending to date was simply too small to measure.

“Among intermediate and advanced firms, many are spending 10% to 25% of their overall marketing budget on social media efforts.”

LederMark Communications survey found that 85% of financial services professionals under the age of 50 are using social media to grow their business. That figure– as well as the demographics of advisors using these tools– will surely expand in the coming months and years as financial advisors and their firms become more comfortable and capable of securely tapping into the social networking community.

As your older members age, then how are the needs of the younger members going to be served? 85% and growing is a pretty compelling number. What’s the Credit Union Strategy? What is the leadership doing? What is the board doing?

Ignoring the problem

If the following statistics from CUNA aren’t the driving catalyst, than I don’t know what will.

Other than “When the pain becomes great enough, action will then occur.”

Credit Union mergers are getting bigger, so what is happening to:

  • Asset size of the various Credit Union Groups?
  • Loan size of the various Credit Union Groups?
  • Membership of the various Credit Union Groups?

These are statistics as of the 3rd. Qtr. 2010. Large is considered >$100 Million in Assets. While most would consider this large, banks such as J.P. Morgan Chase, Wells Fargo have asset sizes larger than ALL Credit Unions Combined!

The larger credit unions control 86% of all the assets. Asset growth has been 21.6% since the beginning of 2006, and has slowed quite dramatically with these economic conditions. However you would think that with the bashing of the banks these past few years, that it would have been dramatically higher. Why Not?

Lack of leadership, marketing and branding. Social Media has now entered the arena, only to be embraced by most of the larger credit unions. The smaller credit unions have a great opportunity that they are wasting, and getting further and further behind.

The larger credit unions control 87.75% of all loans granted. Loan growth has been 12.31% since the beginning of 2006 and falling dramatically recently.

The larger credit unions control 78.89% of all membership. Membership has only grown 5.03% since 2006 in total.

< $5 Mil $5-$20 $20-$100 > $100 Mil. Total
Total Assets $3,913 $23,423 $99,758 $792,900 $919,994
% of Total Assets 0.43% 2.55% 10.84% 86.19% 100.00%
Total Loans $1,951 $11,895 $56,361 $507,619 $577,826
% of Total Loans 0.34% 2.06% 9.75% 87.85% 100.00%
Total Members 1,117 4,321 13,988 72,593 92,019
% of Total Members 1.21% 4.70% 15.20% 78.89% 100.00%

What will the next 3-5 years look like for Credit Unions?

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