BOSTON — The number one challenge for credit unions are lower profit margins followed by identifying ways to attract new members, according to a report released today by Aite Group, LLC.
The report is based on the results of a survey of 101 credit unions, all with more than $100 million in assets. It is part of a larger Aite study of 201 credit unions and the first of a series of reports on this market segment.
Approximately 36% of credit unions surveyed said lower profit margins continue to be their top priority. Thirty-four percent said finding ways to attract new members was their biggest challenge.
"As the credit union industry is forced to evolve, many institutions find themselves in uncharted waters," said Christine Barry, research director with Aite Group and author of the report. "Survival in today's competitive marketplace requires flexibility, and, in the case of credit unions, it also sometimes means expanding well beyond their roots."
Thin profit margins and growing competition within the financial services industry may be the result of credit unions competing head-to-head with banks and members demanding more sophisticated products and services, the report noted.
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