The ripple effects of the COVID-19 pandemic years have brought about rapid change and a new challenging environment for credit unions. Macroeconomic factors that can be traced back to the early pandemic years, have induced a competitive "war for deposits." Financial institutions, including credit unions, banks, and online banks find themselves in a heated battle to attract deposits.
In order to navigate the current competitive environment and prepare for the future, credit unions must understand these new circumstances and how they impact their balance sheets, examine their current strategies, and develop a new action plan.
Credit Union Implications
Rapid change is occurring right now. Consumers and businesses are incentivized to seek better rates and the supply of deposits is dwindling. Financial institutions are also facing a tightening of liquidity which in turn is increasing demand for deposits. Credit unions are at risk of falling behind in the war for deposits to competitors willing to price-up to attract deposits. Credit unions are best equipped to handle slow change, but they must respond quickly to these rapid changes and prepare for the future.
Download the report to learn more about the war for deposits and gain strategies needed to manage this new financial environment.