By Stacy Augustine, President, CU Strategic Planning
In a world where economic indicators shift weekly, credit union leaders must ask: Are we prepared for multiple possible futures—or are we just hoping for the best?
That’s where scenario planning comes in.
Scenario planning is more than forecasting; it’s a discipline of preparedness. It’s a strategic tool credit unions can use to imagine a range of plausible futures and explore how they might respond with foresight.
And in today’s landscape, that kind of resilience is not optional.
What Credit Union Scenario Planning Looks Like
Rather than starting with predictions, scenario planning starts with uncertainties. What trends or events are likely to affect your credit union but remain unpredictable in outcome?
Take interest rates. While inflation has cooled from its peak, the Federal Reserve remains cautious. If rates drop quickly, credit unions with high-cost deposits could see margin compression. If they stay high, members might delay borrowing, especially for large purchases like cars or homes.
Other unknowns include the impact of tariffs on lending, taxation threats and the shifting regulatory landscape affected by changes to CFPB authority and the litigation associated with it.
Scenario planning doesn’t tell you which of these outcomes will happen or when they will happen. Instead, it helps you answer the question: How would our credit union respond if this did happen?
Sample Scenarios to Explore
These are just a few scenarios worth examining:
- Rate and Inflation Volatility: How will your balance sheet hold up if rates fall rapidly—or stay stubbornly high for another two years?
- Operational Risk with Grant Awards: What’s your plan if you win a $1M+ grant but lack the internal infrastructure to deploy it effectively?
- Lending Disruption from Auto Tariffs: If imported vehicle tariffs spike prices by $4,000 to $10,000, how will that affect loan demand and member affordability?
- Digital Disruption and Member Shifts: Are your digital offerings substantial enough to retain Gen Z and millennial members if a sleek, new fintech comes along?
- Climate and Insurance Pressure: Do you have concentrated exposure in flood or wildfire-prone areas—and how will rising insurance premiums impact members and collateral?
Each of these issues merits a separate scenario. Your leadership team can explore what would change, what would remain critical, and where your blind spots lie.
The Role of Scenario Planning in Strategic Planning
Scenario planning works beautifully as a standalone exercise—especially during times of external disruption. But it becomes even more valuable when integrated into your annual strategic planning sessions.
When done right, scenario planning adds another dimension to your strategic plan. It pushes leaders to move beyond the most likely case and consider how key initiatives would perform across multiple futures. Would your planned mortgage product work if rates jump again? Does your 2025 growth strategy still make sense if consumer confidence dips?
At CU Strategic Planning, we see scenario planning as a complement to strategic planning, another tool that allows our clients to future-proof not just their goals—but their culture. Teams become more comfortable with ambiguity, more aligned on mission, and more empowered to act decisively as trends unfold.
Making It Practical
Scenario planning doesn’t require a crystal ball—or even a crystal-clear data set. What it does require is dedicated time, cross-functional participation and a willingness to think creatively.
Start small: Choose two uncertainties and build three distinct futures. Give each a name. Explore them as “stories.” Then, work through the implications:
- What would this mean for our members?
- Where are we vulnerable?
- Where could we lead?
These conversations are not about predicting the future. They’re about being ready for it.
Preparation is the most strategic posture a credit union can take during times of converging economic, environmental and political risks.
Five Questions to Start Your Next Scenario Planning Session
- What external factors are keeping your leadership team up at night?
- Which of those factors are highly uncertain—but would significantly impact your credit union?
- If one of those scenarios became reality tomorrow, in what areas would you feel unprepared?
- What no-regrets moves could you make today to be ready for multiple futures?
- Who else needs to be part of the conversation—from operations to the boardroom?
Scenario planning doesn’t require you to predict the future. It helps ensure you’re ready to thrive in it.