Credit Unions : A Market Perspective

Feb 18

How basic industry data can be used for meaningful insights?

The following article demonstrates the power of cloud computing for generating insights from readily available information. Using public data from Credit Union National Association and Federal Reserve Bank of New York presented below are some charts and commentary on them.

The analysis presents some key takeaways for Credit Unions in their market outreach for Home, HELOC and Auto Lending, comparing segment statistics to industry data
It also sets up the stage for potential use of AI/ML tools to slice and dice data in meaningful ways; discovering what otherwise remains hidden behind multiple workbooks

At Synergi, we believe in the power of analytics, simplifying decision-making with the right technology application. This is one such example.

US National Statistics with 2023 ending in June. Mouse over charts to view more information & Don't miss out on the last one.

Not only have the Credit Unions shown a continuous growth in member acquisition since 2011 but also have increased per Union member counts from about 13K in 2011 to nearly 27K in 2023.

The decline in growth in 2019 & 2020 can likely be attributed to COVID impact. 2023 shows a slowdown in growth. Is it because of the rate environment or some other anomaly is still to be seen with end of year numbers rolling in?

Like with member growth, outstanding balances in the three important loan sectors have also shown consistent increase more than doubling in each.

Of course, of interest would be comparisons to overall industry which follows next.

The three charts above show a comparison of Credit Union Outstanding Balances by loan type against industry.

Key Takeaways:

Industry share of Credit Unions has made significant progress since 2011
Mortgage share at about 5% remains relatively low compared to HELOC and Auto
Market rate seems to impact Auto and Mortgage in different ways. Low-rate environment is conducive to home lending while high rates favorable for Auto.
Rate impact can be attributed to member behavior.

High-rate environments have auto dealerships offering high APRs which have borrowers move to Credit Unions
At the high rates have lower refinance demand impacting originations

How does one circumvent this change in borrower needs and behavior to rate fluctuations remains a challenge?

At Synergi, we are developing a rate agnostic brand building approaches that addresses the issue. More to follow on it in our subsequent blogs.

Till then, I leave you with a last chart combining the three above (with a dropdown for loan type). An illustration of possibilities.