Strategies for Credit Unions to Grow Deposits in Any Economy

In today’s shifting economy, many credit unions continue to focus on maintaining adequate liquidity. Lower interest rates over the past decade have resulted in some credit unions holding large portfolios of low value loans. Now that interest rates are high, many credit unions are more concerned about driving deposits to offset these low yields.

At the same time, some consumers are using up savings that they accrued during the pandemic. This results in lower than average - or even decreasing - deposit levels. Plus, consumers continue to shop around for financial institutions that offer high deposit rates. High deposit rates cause increased pressure on credit unions to maintain their existing deposit accounts. 

Given these challenges, credit unions need to explore new ways to drive deposits. Credit unions need to find consumers that have the financial resources to become valuable, high-deposit new members. While at the same time continuing to  focus on increasing deposits across existing member accounts. And as always, credit unions need to ensure that they maximize their marketing budgets through high-return marketing programs.

Here’s how credit unions can drive deposit growth

With the right consumer financial insights, credit unions can gain new members, grow deposits, deepen member relationships, and deliver a positive member experience. Read on to learn more.

1. Target the right consumers for new credit union deposit relationships

With so many financial options available to consumers today, it can be difficult to attract the attention of anyone. Especially attracting those that can drive new deposits. 

To better focus deposit prospect targeting efforts, credit union marketers can enhance their segmentation with a more complete view of consumers’ financial potential. Using insights such as deposits held across firms, estimated income, and affluence, credit unions can target those consumers that are more likely to be able to bring in significant new deposits.

For example, credit unions can target consumer households in their target markets that are likely to hold over $25,000 - or over $100,000 - in deposits at other firms. Many banks and credit unions have used this kind of insight to fuel both their direct and digital marketing programs. This leads to them identifying millions in potential new deposits.  

2. Uncover hidden opportunity to grow deposits

Deposits spread across your firm due to many of your members likely having several financial relationships. But, you can differentiate and target these members by incorporating deposit, income, and affluence insights into your segmentation. 

Here’s how this works: an analysis of a credit union’s existing membership revealed that over $14 billion in deposits were being held by current members at other financial providers. By targeting these members through a direct mail campaign, the credit union expected to generate $70 million in new deposits. (Equifax analysis)

3. Leverage email to maximize marketing budgets 

You are probably already using email as part of your marketing efforts. But powering your email targeting with financial insights can really pay off.

One credit union that needed to fuel liquidity after a large growth in loans used an email prospect list to reach prospects likely to have over $25,000 in deposits at other firms. The result? Over $32 million in new deposits. Plus there were double the number of new CD and money market accounts than in the previous year.  

4. Identify high-value members for premium treatment and deposit offers

How well can you identify your best members across your web-based applications, call centers, and branches? Many credit unions pride themselves on delivering a top-notch member experience. That is why identifying your best members and promoting your best offers can drive new deposits that can benefit both you and your members. 

First, integrate financial insights such as likely member affluence, estimated income, or deposit opportunity into your existing systems to better communicate your deposit promotions. Then, you can deliver a new CD offer to select members when they use your ATM to obtain funds. Or, you can have your agents promote a limited-time money market offer when select members visit your branch or call in.

While there is significant debate on where the economy is heading in the coming year, credit union marketers can use these strategies to enhance their deposit-growth campaigns to shore up liquidity while at the same time deepening member relationships.

Explore more ways to find valuable new members - and differentiate which of your current members hold the most opportunity for growth - in our Drive Customer Growth ebook. 

 

*https://www.americanbanker.com/creditunions/news/credit-union-regulator-says-liquidity-risk-is-top-priority-for-2023