Setting 2024 Strategic Priorities for Credit Union Leadership

By Jeff Grobaski, CEO, Epic River

For credit union leaders, 2023 was defined by an unprecedented series of obstacles. From the enduring impacts of the pandemic to the unpredictable economic landscape, credit unions faced conditions that tested their resilience and demanded strong adaptability. Strategic decision-making was paramount, requiring a forward-looking approach to anticipate and mitigate potential risks.

Many of these challenges are likely to persist in 2024 and will set the tone for credit unions’ strategic direction. By examining the hurdles of 2023, credit union teams can identify pivotal strategies essential for navigating and succeeding in the upcoming year.

Challenges of 2023

Economic Headwinds: The Federal Reserve's series of interest rate hikes in 2023 led to subsequent increases in borrowing costs for businesses and individuals. To stay competitive and attract member funds, credit unions had to adjust the interest rates offered on deposits.

The combination of heightened borrowing costs and the necessity to maintain competitive deposit rates led to an overall increase in the cost of funds. This factor remains a persisting concern for 71% of credit unions going into 2024, according to the Cornerstone Advisor 2024 banking outlook report.

Additionally, supply chain disruptions continued to hamper economic activity. These disruptions led to increased uncertainty and anxiety among credit unions, as they grappled with the challenges of navigating an unstable economic landscape.

Digital Transformation Imperative: In a rapidly evolving technological landscape, the need for digital transformation has become more pressing than ever. Credit unions that succeeded in advancing their capabilities were poised for stronger member growth and retention, while those that lagged risked decreased member loyalty rates.

Alongside these efforts, credit unions had to remain vigilant and prioritize cybersecurity and data protection measures. With cyber threats becoming increasingly sophisticated and pervasive, ensuring member data security and safeguarding against potential breaches was critical. Credit unions had to invest in robust cybersecurity infrastructure, implement stringent authentication protocols and provide comprehensive staff training to mitigate risks effectively.

Balancing investments in technology with maintaining financial stability demanded careful planning and resource allocation. Credit union leaders needed to ensure that their investments were aligned with strategic goals and budgetary constraints to avoid overstretching their resources or taking on excessive risk.

Evolving Customer Expectations: Today's customers are increasingly digital-savvy and demand seamless, personalized experiences. Meeting these expectations while maintaining the traditional high touch, community-focused approach that sets credit unions apart required a delicate balancing act.

Adopting innovative digital solutions without losing sight of human connection became a key leadership priority. Credit unions needed to embrace these dual priorities by integrating solutions to create greater digital convenience while prioritizing member engagement through personalized interactions.

Successful Strategic Approaches for 2024

However, amidst the varied adversities, there were also triumphs. Many credit unions thrived by implementing strong approaches that led to improved member growth, competitive advantages, and solid community partnerships.

As the 2023 challenges are expected to endure, credit unions should continue employing the successful strategies that propelled them forward, aiming to maintain momentum and success in 2024.

Embracing Technology: Credit union teams were driven to adopt new technologies to remain competitive in attracting and retaining members. Many institutions successfully implemented innovative solutions to improve operational efficiency, enhance member experiences, and offer competitive products and services. This included expanding digital banking offerings, leveraging data analytics for better decision-making and adopting cloud-based solutions for agility and scalability.

Community Focus: Despite the economic challenges, credit unions remained steadfast in their commitment to supporting their local communities. This encompassed providing financial assistance to small businesses, participating in community development initiatives, and sponsoring various local events. Through this unwavering dedication, credit unions reaffirmed their position as trusted partners in the communities they serve.

Adaptability and Collaboration: Credit unions swiftly adapted to meet the evolving industry environment, demonstrating remarkable agility and flexibility. Recognizing the need to respond to emerging trends and challenges, regulatory changes and shifting consumer behaviors, effective credit executives engaged in collaborative efforts with peers and partners to exchange insights, share best practices and leverage collective wisdom. This approach enabled them to gain valuable perspectives from peers, industry experts, and regulatory bodies, leading to more informed decision-making and innovative solutions.

Looking Ahead

As we enter 2024, it is evident that market challenges are expected to endure, yet the strength of credit union leadership remains resolute. By continuing to prioritize digital transformation, agile infrastructure and a community-centric approach, these institutions are well-positioned to weather evolving industry factors. While the future remains uncertain, the dedication and resilience of credit unions will continue to be a beacon of hope and stability for their communities and the financial services industry as a whole.

About Jeff Grobaski, Founder and CEO, Epic River

Jeff Grobaski is the founder and CEO of Epic River, a lending-as-a-service platform provider that connects banks and credit unions with healthcare providers to streamline patient payments.  Their unique offering allows providers to offload nonpayment risk by partnering with banks and credit unions to create low-interest patient loan agreements. As CEO, Grobaski draws on more than 20 years of experience in software development and product management.