Credit Unions and Banks are Winning New Revenue Streams

Today’s banking institutions are now developing innovative programs that have high growth potential for their members and customers.

How Credit Unions and Banks are Winning Big, New Revenue Streams

Credit Unions and Retail Banks are rethinking how they will generate non-interest income moving forward. Growing revenue from traditional sources such as mortgages, loans and credit cards have been difficult given consumer caution and restrictions from regulatory agencies. Today’s banking institutions are now developing innovative programs that have high growth potential for their members and customers.

With the constant pressure to adopt new technologies and innovation, Credit Unions and Banks need to ensure that they are focusing on the right priorities. In an effort to keep up, some might misinterpret what customers need. In addition, as consumers spend more time on digital platforms, they expect personalized financial and non-financial services to be woven into their daily digital interactions.

To maintain market share, Banks and Credit Unions must seamlessly embed relevant offers directly into their banking platforms. For speed and efficiency, financial institutions need to build strategic relationships with technology partners. Further, they must always be on the lookout for new partners that offer opportunities for increased revenue and enhanced customer experiences. By bringing relevant service offerings into customer’s experiences, both the financial institutions and the customers win.

According to the Consumer Confidence Index, consumers are less optimistic today about taking on debt for large purchases (ex: homes, cars) and are more interested in strategies that are designed to protect their assets. To meet customer demand, Credit Unions and Banks are offering new and improved wealth management programs aimed at protecting assets and investments.

In addition, estate planning services like simple wills, trusts and directives are now being offered to members and customers directly through banking platforms. According to a 2023 study, 66% percent of Amercans do not have a will in place. This represents a large opportunity and natural fit for Credit Unions and Banks as they already serve as a trusted provider. Because these services are more affordable than working through an attorney, this also serves as a valuable recruiting tool for new members and customers. Through these programs, Credit Unions and Banks have the opportunity to educate their customers, improve their financial security, attract new customers and make a positive impact on their own institution’s bottom line.

Offering investment and financial legacy services in house creates new opportunities from a data perspective. Having a deeper, big picture understanding of a customer’s financial, real estate and other holdings (and family structure) paves the way for other services to be offered through the Bank or Credit Union. In the past, financial institutions have referred these services outside the branch which is a missed opportunity for building deeper relationships, generating non-interest income and obtaining customer data.

While Banks and Credit Unions hold a large amount of customer data, they traditionally have not fully used the data to uncover new programs and revenue opportunities. Customer data is a powerful resource that can be used to improve customer/member experiences and generate new revenue streams. Building new services and product offerings from data insights typically builds a stronger foundation than running promotions based on demographics and trends. Firms’ ability to meet customer expectations will hinge on their access to and insights from these ever-increasing flows of data, per a report on future banking trends from Deloitte Consulting.

Change has been the recurring theme for Credit Unions and Banks and staying competitive has never been tougher with Challenger Banks and Fintechs. At the same time, attracting younger customers and members is imperative given the aging population and impending transfer of generational wealth. The challenge has been that digital transformation projects are multi-year, ongoing efforts that require change from every department in the organization. There is also heavy pressure to find new revenue streams with limited staff and financial resources. Leadership teams are laser focused on finding quick wins that have the potential to make an immediate impact on revenue. In order to accomplish this, Banks and Credit Unions need to remain open to partnerships, new programs and taking calculated risks in exchange for the opportunity to create significant new revenue streams.

A note about the author:

Kory Kelly is the CEO and Co-Founder of Legal Karma, a tech company that provides embedded tools for Credit Unions, Banks and Financial Advisors to win new revenue by offering simple wills, trusts and directives to members and customers through their own banking platform.