Remaining Relevant For The Future - VLI Hawaii | Home · FINTECH’S GROWING MARKET DISRUPTION....

2020

REMAINING RELEVANT FOR THE FUTURE

Alexandra Gekas, VP, Marketing & EngagementCallahan & Associates

Learning Objectives:1. Examine the state of the industry today and what that means for tomorrow.2. Review key future credit union issues that are keeping executives up at night.3. Discuss risk factors with potential to affect future relevancy.

Remaining Relevant For The Future

Alexandra Gekas, Vice PresidentCallahan & Associates

ME IN A ONE-MINUTE NUTSHELL

3

4

CALLAHAN IN A ONE-MINUTE NUTSHELL

4

TODAY’S TOPICS

• Credit Union Trends: Where are credit unions today?

• A Look At The Current Marketplace: Where is the competition today?

• Ways To Remain Relevant: Where do we want to be tomorrow?

5

CREDIT UNION TRENDS:WHERE ARE WE TODAY?

7

5,396US credit unions

Mortgage origination fuels lending activity#1

Certificates drive positive share growth#2

Strong ROA and Net Worth allows for future growth and investment#3

THIRD QUARTER CREDIT UNION HIGHLIGHTS

8

MEMBERS SAVINGSLENDING BOTTOM LINE

9

4.2 MILLION NET NEW MEMBERS ADDED IN LAST YEAR

100.0 103.4 107.5 111.9 116.7 120.9

2.9%

3.4%4.0% 4.0%

4.4%

3.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

0

20

40

60

80

100

120

140

3Q14 3Q15 3Q16 3Q17 3Q18 3Q19

Mill

ions

Membership and Annual GrowthData as of 09.30.19

Total Members Annual Growth

Source: Callahan’s Peer-to-Peer AnalyticsSource: Callahan’s Peer-to-Peer Analytics

11

BALANCE SHEET EXPANDING AT SLOWER PACE

$704 $779 $857 $947 $1,037 $1,099

10.1%10.7%

10.1% 10.5% 9.5%

5.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

$0

$200

$400

$600

$800

$1,000

$1,200

3Q14 3Q15 3Q16 3Q17 3Q18 3Q19

Billi

ons

Total Loans and Annual GrowthData as of 09.30.19

Total Loans Outstanding YOY Growth


9.5%

8.4%

9.8%

12.5%

6.5%

9.9%

5.9%

7.4%

4.4%

2.2%

6.3%

7.2%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

Total

Credit Card

Used Auto

New Auto

Other RE

1st Mtg

Annual Growth in Loans Outstanding Data as of 09.30.19 3Q19

3Q18

SLOWDOWN IN AUTO MARKET AFFECTS BALANCE SHEET GROWTH

Source: Callahan’s Peer-to-Peer Analytics

SHARE GROWTH RATE RECOVERS FROM 2-YEAR SLOWDOWN

$951 $1,005 $1,092 $1,165 $1,223 $1,308

3.6…

5.7%

8.6%

6.7%

5.0%

6.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

3Q14 3Q15 3Q16 3Q17 3Q18 3Q19

Billi

ons

Total Share Balances and Annual GrowthData as of 09.30.19

Share Balances YOY Growth


SHARE CERTIFICATES DRIVE SHARE GROWTH, UP $51.0B YOY


5.0%

5.8%

7.0%

1.0%

-0.8%

8.7%

6.9%

3.1%

5.8%

2.1%

3.6%

22.2%

-4% 1% 6% 11% 16% 21% 26%

Total Shares

Regular Shares & Dep.

Share Drafts

MMA

IRA/Keogh

Share Certificates

12-Mo. Growth in Shares SegmentsData as of 09.30.19 3Q19

3Q18


15

LOAN-TO-SHARE RATIO TICKS UP; BEGINNING TO PLATEAU?

74.0% 77.5% 78.5%81.3%

84.8% 84.1%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

4Q17

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

Loan-to-Share RatioData as of 09.30.19


ROA APPROACHES 1% THROUGH THE THIRD QUARTER

0.83%0.80% 0.78%

0.79%

0.96% 0.98%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

3Q14 3Q15 3Q16 3Q17 3Q18 3Q19

ROAData as of 09.30.19


$122.6 $131.4 $140.4 $150.5 $163.5 $177.4

$7.1$7.2

$7.7$8.7

$9.2$9.6

10.9%

11.4%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

3Q14 3Q15 3Q16 3Q17 3Q18 3Q19

Billi

ons

Net Worth and AllowanceData as of 09.30.19

Net Worth Allowance Net Worth Ratio


STRONG NET WORTH RATIO BODES WELL FOR ECONOMIC SHOCKS

PENETRATION RATES REMAIN SOLID EVEN WITH 21% MEMBER GROWTH PAST 5 YEARS

Credit Card Real Estate Share Draft Auto

17.6% 5.5% 53.7%

21.3%3Q19

3Q14Change

16.3% 5.4%58.6%

17.3%

+1.3% +0.1% +4.0%


Penetration RatesData as of 09.30.19

+4.9%

A LOOK AT THE CURRENT MARKETPLACE: WHERE IS THE COMPETITION TODAY?

19

BANKS TOP CREDIT UNIONS IN CONSUMER SATISFACTION FOR THE FIRST TIME EVER

21

WE’RE COMPETING IN A LAND OF GIANTS & FINTECH DISRUPTION

22

23Source: FDIC and NCUA

24

BRANDS LOOK LIKE THIS…

24

2525Source: FDIC and NCUA

For graphs, tables, or other visuals that need more room. Delete this box.

FINTECH’S GROWING MARKET DISRUPTIONFindings from PwC’s Global FinTech Survey

80% 56% 82%believe their business is at risk

have disruption at the heart of their strategy

expect to increase FinTech partnerships in the next three to five years

26

27

BRANDS NOW LOOK LIKE THIS.…

27

28

THESE LOGOS ARE MARKETING TO OUR MEMBERS...

28

29

AND USING OUR OLD VALUE PROPS…

29

30

WE’RE COMPETING WITH THESE LOGOS TOO…

30

WAYS TO REMAIN RELEVANT: WHERE DO WE WANT TO BE TOMORROW?

31

1. Mission2. Growth3. Talent Development4. Digital First5. Governance

2020 PRIORITIES: WHAT CUS ARE THINKING ABOUT

32

PURPOSE TALENT MINDSET

FOCUS ON THE INDUSTRY IMPERATIVES

34

PURPOSE

35

FINANCIAL HEALTH IN AMERICA

59% Of U.S. adults are living paycheck to paycheck. – Charles Schwab

39% Of Americans either cannot or would need to borrow or sell something to cover a $400 unexpected expense. – Federal Reserve

25% Of non-retired Americans have no retirement savings. –Federal Reserve

37

KEY QUESTIONS REGARDING PURPOSE

• Do you feel your credit union has a clear purpose?• Do your members and community know it?

• What’s your unique brand story? How well do you tell it?

38

TELL YOUR CREDIT UNION STORY

39

MEMBERS CAN HELP

40

41


Do you feel your credit union has a clear purpose?• Do your members and community know it?

What’s your unique brand story? How well do you tell it?

How are you differentiating your credit union?

2015

42

2019

43

2015

44

2019

45

46


Do you feel your credit union has a clear purpose?• Do your members and community know it?

What’s your unique brand story? How well do you tell it?

How are you differentiating your credit union?

How do you measure your impact?

WE STILL NEED TO MEASURE THIS….

Source: Callahan’s Peer-to-Peer Analytics47

BUT WE NEED TO START MEASURING DIFFERENTLY

# of Financial Health Programs

Offered

# Employee Volunteer Hours

% Employee Diversity

$ Grants$ Habitat For Humanity Loans

# First Time Home Buyer Loans

48

TALENT

49

HIRING & RETAINING GOOD TALENT MATTERS

50

AND YET…

51

KEY QUESTIONS REGARDING TALENT

• How do you find, develop, and retain great employees?

52

TALENT IN ACTION

Building An Effective Retention Program

53

TALENT IN ACTION

• We’re investing in employees, giving them more depth in what they’re doing, and getting them in front of senior management.

• We’ve developed an end-to-end approach to training, from new hire onboarding to development of senior-level competencies.

• We’re also in the 3rd year of our leadership development program, which offers open enrollment every year for up to 25 participants.

Building An Effective Retention Program

54

55


How do you find, develop, and retain great employees?

Are you evolving your roles to meet the demands of the future?

ROLES, THEY ARE A CHANGIN’

56

57


How do you find, develop, and retain great employees?

Are you evolving your roles to meet the demands of the future?

How are you incorporating diversity & inclusion into your strategy?

THE RIGHT AND WRONG WAY TO APPROACH D&I

Source: Jennifer Brown “How To Be An Inclusive Leader” 59

VS.

BUILDING A SUCCESSFUL D&I STRATEGY

• Compelling CEO vision • Management accountability

• Value drivers • Diversity mix

• Data and analytics

• Prioritized initiatives • Inclusive culture

• Metrics and tracking

• Local adaptation • Cross-industry/sector

collaboration

Source: McKinsey&Company, Delivering through Diversity 60

• Compelling CEO vision• Management accountability

MINDSET

62

KEY QUESTIONS REGARDING MINDSET

• Is innovation a leading component of your culture?

63

• One part problem solving

• One part problem preventing

RECIPE FOR INNOVATION

64

INNOVATION COMES FROM ANY LEVEL

65



• Are you willing to fail a little to learn a lot?

66

1.10^5=1.61.01^260 = 13.3

67


68


• Are you willing to fail a little to learn a lot?

• What is the role of collaboration as your credit union evolves?

COLLABORATION IS IN OUR DNA“There’s more and more to know in the world, and you can only have so much in your head. So the share of stuff you know as an individual is declining in any field.”

- Benjamin Jones, Kellogg School

69

WAYS TO COLLABORATE

70

YourCredit Union

Community

Fintechs

Local Businesses

Each other!

CUSOs

Internally

OUR MISSIONCredit unions are different and always have been. We never came together with the notion of making money, but with the notion of helping people and improving their lives.

- Ed Callahan

71

72

PURPOSE TALENT MINDSET

TO BE CONTINUED….

Thank You! Alexandra Gekas

[email protected]/in/alexandra-gekas/

Remaining Relevant For The Future - VLI Hawaii | Home · FINTECH’S GROWING MARKET DISRUPTION....

Documents

Transcript of Remaining Relevant For The Future - VLI Hawaii | Home · FINTECH’S GROWING MARKET DISRUPTION....