ROX Is the New ROI

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Historically, financial institutions have measured their success purely on traditional return on investment (ROI) metrics, such as revenue, efficiency ratio, member numbers and deposit growth. However, with digital disruption, innovative fintechs and weakening customer loyalty all upending the banking industry, these measures no longer tell the full story, nor do they provide actionable intelligence to credit unions for long-term planning. The financial sector is moving too fast, and its customers are moving even faster – meaning success today is no longer an accurate forecast for future viability.

The concern with traditional measurement techniques is that they focus too much on the here and now, and don’t take into account the simple fact that credit union members have more choice than ever when it comes to their financial partners. They may maintain a primary deposit account with a credit union or have a car loan with you – which looks good for the credit union’s balance sheet – but take their mortgage or wealth management business to a user-friendly fintech if they feel the credit union can’t meet those needs. This translates to lost future revenue for the credit union, but ROI measurements may not show that.