Workshop Discussion Topics
With rates on the rise due to the Federal Reserve’s incremental rate increases, consumers appear anxious to borrow while pricing is still favorable and effective deposit management is emerging as a critical component of organizational success. At the upcoming workshops in June, we’ll examine how your institution can respond to these developments to improve performance and position your credit union for long-term success.
Some of the key areas we’ll be exploring include:
- Strategies and tactics for cost-effective deposit growth and retention: On the heels of a protracted low-rate environment, consumers will be emphasizing deposit value in their FI decisions for the first time in nearly a decade. We’ll discuss how institutions need to be thinking about deposit pricing and products to retain households and grow the organization. We’ll also highlight key strategies and tactics for managing a massive wealth transfer that will become increasingly substantial as Baby Boomers age and Millennials become the dominant economic force.
- Capitalizing on rising consumer loan demand: For the first time in well over a decade, consumer loan demand has risen significantly, increasing from 22% of consumers who anticipate opening a loan in the next 12 months in 2016 to 28% in 2017 (source: Raddon Research Insights). Clearly rising rates are instilling a “fear of missing out” among consumers and improved economic and housing conditions have households in a better position to increase their borrowing. A maturing Millennial generation is also a driving force behind this increased demand as they finally seek to get married, start families and own homes after delaying these life milestones throughout the recovery.
- Dealing with continued earnings pressure: While rising rates may portend that net interest margins will improve going forward, the potential for rapid increases in the cost of funds could in fact squeeze margins substantially, at least in the short term. Likewise, traditional sources of non-interest income – such as overdraft and interchange – are no longer growing and operating expenses continue to increase due to technology costs and the changing branch model. At the workshops, we’ll talk about strategies for managing the cost of funds, finding new sources of non-interest income and effectively leveraging your investments to improve organizational efficiency.
The key element of this part of the program is the audience discussion. High performers are identified and tactics to improve growth and performance are discussed in an open forum. While discussion is voluntary, these sessions tend to result in a high level of interaction among participants and provide new insights, strategies, and tactics that participants are able to implement at their own financial institutions.