Three Ways to Grow Your Credit Union’s Non-Interest Income

As a credit union, reconciling your not-for-profit, “people helping people” mission with the need to generate income can be tough. Unlike other financial institutions, hiking up fees or charging for once free services aren’t a credit union’s go-to solution when the need for additional non-interest income becomes apparent. So, what’s a member-friendly credit union to do? Get creative.

Comparing the 2012 and 2013 Non-Interest Income Surveys from Callahan & Associates show that overall, non-interest income is down for credit unions. Here are some numbers to consider:

• NSF/courtesy pay income was the largest source of non-interest for credit unions in 2012. In 2013 it moved to second.
• Non-interest income from debit card interchange and fees is now the largest contributor for credit unions – up to 23.8%, compared to 22.5% in 2012.
• Miscellaneous non-interest income also grew from 4.5% in 2012 to 8.8% in 2013. Safety deposit boxes and skip-a-payment fees were the most common source of this income. 

Growing Non-Interest Income

Other sources of non-interest income on the survey included mortgage sales, credit card interchange and fees, investment and insurance sales, ATM fees and others. As with most issues credit unions need to contend with in this roller coaster economy, it may be time to get creative on sources of non-interest income. How creative is up to you. We have a few suggestions – some are just expanding on current efforts while others include adding something new to the mix:

1. Become their PFI
   Easier said than done, right? But jockeying to become your members’ primary financial institution may not be as difficult as you think. There’s still plenty of backlash from the banking crisis a few years ago that many members would be happy to ditch their bank. They just need reasons to move, and a simple process to do so.
   
   Increased wallet share is basically the Holy Grail for credit unions, and sometimes less is more. If your credit union doesn’t offer free checking, it should. The more members you attract with fewer fees can exceed what you currently earn on your regular checking accounts.  Relationship discounts are also a popular way to attract more wallet share. Discounts on loans if members use their checking accounts to make payments is becoming more commonplace. Also, have an online (and in-branch) switch kit to help simplify the move for your members.
   
   
2. Think Beyond Interchange
   As the survey says, debit card interchange and fees are the top source of non-interest income for credit unions. But there are other ways your credit union can take advantage of debit cards. Train your front line staff to promote debit card overdraft protection if you have it. If you don’t, you might want to consider adding it. Let your members know exactly how it works, what it costs and how it can help them. Chances are they’ll sign up.
   
   Offer instant-issue debit cards. A financial consulting firm discovered that credit unions/banks that offer instant-issue debit cards have a 15% higher activation on new accounts, 20% more swipes and new accountholders spend 20% more. Finally, if your credit union wants to benefit even more from debit card interchange and fees, then promote card acquisition and usage. Maybe offer incentives for increased usage. Once your members become comfortable using their credit union debit card, they’ll use it more often.
   
   
3. Partner Up
   Sometimes all it takes to boost non-interest income is the right program or partner – or both! Many member rewards programs offer credit union incentives for active participation. This lets your credit union bring your members attractive discounts while generating non-interest income at the same time.
   
   With many programs you’ll need to weigh any initial outlay to potential earned income. With other programs, like our Love My Credit Union Rewards program, credit unions only need to promote the program to earn non-income incentives. We even offer free marketing materials and support to help accomplish this. Discount partners like Sprint and Credit Union Auto Club offer valuable incentives – while other big-name partners like GM, TurboTax and DIRECTV help attract your members to the program. It’s a good source of non-interest income for minimal effort – a total win-win for your credit union!

However your credit union chooses to grow its non-interest income, it’s vital to rethink how you do it. With more and more consumer/member scrutiny on fees and rates, it pays in the long run to have the reduced fees and comprehensive services that non-interest income can help bring.

To learn more about Love My Credit Union Rewards, click here. To learn more about our partner discounts, click here. 

Credit Union Member Rewards to Set You Apart

A unique way your credit union can grow its members and/or wallet share is through a carefully thought-out rewards program. A successful rewards program is one that goes beyond credit card points. The three things to keep in mind when choosing a program are: to make sure it’s free to your membership; have it offer discounts on things your members want and use; and that it’s simple to implement at your credit union. 

A recent study from Kelton Research showed that: 

• Nearly all (95%) of credit union members say they trust special discount offers from their credit union
• 85% of members would like more discount offers from their credit union 
• 37% of members would increase credit union usage due to the availability of discounts

Credit unions are known to put members first, and offering a valuable rewards program underscores this mission. Member rewards are just another way that your credit union can set itself apart from banks.

CU Solutions Group’s own Invest in America (IIA) member rewards program has been proven to increase member loyalty and grow loans at credit unions. Plus, it offers exclusive discounts from partners such as GM, Sprint, Dell, TurboTax, DIRECTV and more. The IIA team is there for its credit unions every step of the way and even offers free marketing materials for credit unions to use in their branches, on their website and in their statements.

Working with a Credit Union Strategy Partner

As you may know, Membership Enhancement Solutions provides a value driven membership enhancement program called Invest in America (IIA). Participating credit unions are able to develop their membership enhancement strategies and align them to IIA’s strategy, which can present a real opportunity for auto loan, non-interest income and debit/credit card transaction growth. To assist in these efforts, Invest in America posts its marketing calendar online so you can plan your marketing activities accordingly.

IIA is in the early stages of a four-month long Web banner ad and online search media campaign that integrates seven key themes that focus on the program’s key partners. Monthly IIA marketing calendars, available in the LoveMyCreditUnion.org Partner Center, provide significant dates and recommended actions so your credit union can take full advantage of IIA’s major year-end campaign. For example, this month's calendar has the dates and suggested locations to post DIRECTV, GM and home improvement banners on your website which tie into the campaign. These banners can also be found in the Partner Center and can easily be placed in the appropriate areas of your website.

Ongoing Invest in America marketing efforts include weekly emails, blogs and social media posts whose subject matter is listed in the calendar. As part of this initiative, IIA sends weekly emails to those members who have opted in for additional program information. IIA also sends credit unions weekly emails that they can send to their members. Participating credit unions have come to rely on the marketing calendar to plan their marketing strategy, ensuring it aligns with the weekly IIA emails.

Membership Enhancement Solutions strives to provide you with valuable turnkey tools that enable you to align your marketing strategy with Invest in America’s. This alignment in turn optimizes your member enhancement efforts and ties them to your core services.

Related Services:  Invest in America, Credit Union Member Discount from GM, DIRECTV

Retain and Delight Your Employees with Meaningful Discounts

Employee retention is top-of-mind for many credit unions as the economy continues to improve and the competition for quality employees heats up. In addition to offering competitive compensation, many credit unions strive to provide a comprehensive mix of benefits to maintain an edge over other organizations and create a “great place to work.”

One often overlooked but highly valued employee perk that helps make credit unions a great place to work is an employee discount program that offers meaningful discounts on relevant products and services. In addition to traditional discounts on items such as movie tickets, your credit union can easily partner with Invest in America to also offer significant savings from companies like GM, Sprint, Intuit, DIRECTV and more. Invest in America is the single source for discount programs customized for credit union members and employees. To build awareness about your employee discount program, simply leverage your current employee communication channels:

• Web – Develop a dedicated “Employee Discounts” page on your intranet and post banners with links that go directly to any pertinent discounts.
• Newsletters – Dedicate space to employee discounts and promote the most relevant seasonal offers.
• In-branch – Provide frequent updates to employees to remind them about the availability of discounts (and ask for suggestions about additional discounts to add to the program).

Creating a great place to work requires a careful balance of compensation, benefits, career growth, incentives and recognition. But once that perfect combination is found, the employee loyalty and goodwill you’ll foster will be felt throughout your credit union.

Related Services: Invest in America

Cultivating Loyal Members

It all started with earning air miles or credit card reward points. Nowadays people are flocking to deal-of-the-day websites like Groupon and LivingSocial. Consumers are always looking for a discount and have gotten used to never paying full price for the items they want. To keep up, businesses both large and small are adding reward or loyalty programs.

Your members are also looking to save money where they can. Credit unions that offer some kind of rewards program not only provide members with valuable discounts, they are also cultivating member loyalty and overall goodwill. Other benefits of an effective rewards program can result in purchases that help stimulate the economy and, when promoted correctly, can help credit unions grow.

It’s these reasons that CU Solutions Group created Invest in America, a member rewards program that offers discounts from trusted U.S.-based companies like GM, Sprint, AutoNation Direct, TurboTax, FTD, DIRECTV, Allied Moving, Shop America and more. They’re companies your members frequent and your credit union can tie to its core services like auto loans and credit/debit transactions. Discover what Invest in America can do to help your credit union grow at LoveMyCreditUnion.org.