NAFCU Services Blog

Aug 14, 2023
Categories: Leadership Liquidity

2023½: What’s Been on Your Mind (So Far)

By: Allied Solutions

Banking’s instabilities came to light in the spring with the crash of Silicon Valley Bank (SVB), Signature Bank, and First Republic. Artificial Intelligence (AI) and the explosion of the online tool ChatGPT are both turning heads and raising concerns. The lack of regulations around the growing number of buy now, pay later (BNPL) programs is raising some red flags. And credit unions are struggling to reach younger generations. Alas, news and conversations around the liquidity crisis, recession, leadership challenges, housing market, and more didn’t subside either. The first half of 2023 has been quite a rollercoaster for the financial industry. We’ve researched the top trending topics for financial institutions so far, and while there’s not enough room to cover them all, here is a quick recap of what’s been up (and down) this year.  

#1: Banking Turmoil

If this was a game of Family Feud “survey says”, big bank failures are at the top of the list of trending topics this year. While bank management and federal regulators were all pointing fingers at one another, credit unions were put in a promising position – if they acted swiftly.

A Gallup Study in 1979 reported 60% of Americans trusted their banks. Today, that number has dwindled to only 26%. Not since 2008 has there been a better time for credit unions to take advantage of the banking industry’s negative image to bolster their own. This is the perfect opportunity for credit unions to (re)focus on their brand, marketing, and digital strategies so they can be best positioned to grow in this fluctuating environment.

Watch  Allied Solutions’ CEO Pete Hilger talk about how credit unions can take advantage of the current financial market and how critical the digital evolution is to growing new members at NAFCU’s Engage 2023.

#2: The Liquidity Crisis

The words we don’t like to hear, yet here we are. The lack of liquidity and ability to keep up with consumer demand has turned into a game of chess, or Tetris. If there is one thing we have learned during a liquidity crisis, it is that having a strategy (and a backup) is key when the economy takes a downturn.

Each plan should include:

  • Measuring your liquidity often
  • Performing stress tests
  • Using the right tools to help you maintain and grow your liquidity
  • Find new ways to diversify your portfolio

#3: The Gen-Z Revelation

Did you know overall, Gen-Z makes up only 4% (and Millennials 5%) of credit union members? Of course you did, because it’s been on your mind this year! In addition, they are also the generation with the weakest financial education. According to FICO, 29% of Gen-Zers are unaware of what their credit score is - if they even have one. The aforementioned refocus on brand, marketing, and digital strategies really comes into play here with both Gen-Z and Millennials becoming the customer majority for financial institutions. It will take a shift on the credit union’s part in order to stay relevant to these younger generations. A massive focus on being innovative with digital technology while also providing a smooth, frictionless customer experience is going to be key in gaining new, younger members.

#4: Leading for Success

Leadership challenges have been plaguing the industry for various reasons. With constant pressure to do more, be more, and get more – it’s no wonder executives are often left exhausted and possibly looking for other industries to jump to or early retirement.  This blog sums up some of the pain points C-suite executives face today when it comes to company culture, burnout, and the modern workplace.

#5: AI Chit-Chat(GPT)

You’ve heard about it, you may have been tricked by it, but you may not necessarily know what’s going on, or more so, how it affects the financial industry. AI comes in a plethora of forms. Most recently generative AI tool, ChatGPT, has been making mainstream news with its ability to churn out essays, business plans, marketing strategies, and more in mere seconds with just a few prompts. Software companies, especially financial, have not wasted any time jumping into the AI world as they are enhancing their current product lines with AI technology, expansively benefiting your credit union and your members. Because when it comes to growing your credit union with today’s parameters - faster and more accurate has never been more important.

What’s been on your mind this year up to this point? This list probably doesn’t put a dent into your everyday thoughts, let alone what the following months will bring. One thing is for sure though, this isn’t the financial industry of yesteryear.

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