Sources of Revenue…Something to Consider
Many credit unions are examining their business models and dissecting their membership in several ways. One example is by age group. The objective is to understand where business is coming from to help ascertain the age groups that contribute the most to the cooperative. Often the focus is on loans and deposits. However, a key piece of data that needs to be included in such an analysis is the percentage of non-interest income each age group contributes. Without this information, the picture can be incomplete.
Take examples A and B below. Example A looks solely at the loans and deposits held by each age group for a credit union. Example B, on the other hand, includes the non-interest income generated by members. This provides a more complete picture of how each group is generating revenue for the credit union.
Credit unions can learn a lot about their membership with this information, such as which groups generate the most revenue and what the prime borrowing years are for their membership. This type of information can greatly enhance allocation of resources, including marketing efforts.
A couple of logical next steps include evaluating the cost structure of various products and services as well as counting your business every day by delivery channel. Gaining a better understanding how your membership uses key delivery channels also will greatly inform strategic allocation of resources.
