From Tornados to Rainbows: A 2024 Forecast

This blog post is sponsored by Allied Solutions.

The financial services industry faced intense challenges in 2023, such as high interest rates,  staffing shortages and liquidity, to name a few. To remain competitive, financial institutions were forced to increase deposit rates, sending more money out their doors to retain deposits, which had a dramatic impact on their net interest margin. While the nation is (slowly) trying to make its way back from the upside-down, mess of a financial year that 2023 was, there are bright spots in the 2024 forecast. There are some consultive tools you may not be familiar with, but will be happy to learn about, as they will not only help your credit union’s bottom line but also save energy, bandwidth and precious time.

2024 Forecast: Partly Sunny

Whenever a storm rolls through, you look for the next sunny day.  A recent annual survey by CUESolutions provider Cornerstone Advisors to community-based financial institution executives showed some positive outlooks in 2024 vs their 2023 outlook survey. While 52% of those surveyed anticipate a recession or downturn in the economy for 2024, credit union executives show less concern in 2024 for:

• interest rate environment (down 14%)
• weak economy/loan demand (down 15%)
• ability to attract qualified talent (down 16%)

Generative AI dominated conversations in 2023 and it shouldn’t be any surprise to see 24% of the credit unions surveyed planning to invest/implement it in 2024, which is a pleasant sign that credit unions are leaning into new tech and innovations.

Spring into Efficiency

This spring, plan to transform 2024 into a year of efficiency! By being more efficient, your credit union can help lower its expenses, which helps increase revenue. One such avenue are card and check program consulting that are specifically designed to save your organization time and money, improve revenue predictability, and even control or eliminate ongoing price increases by negotiating the best terms on your behalf.

For instance, card and check consulting firm MarketScan has shown results per transaction net income increases of up to 60% with their debit card consulting tool and has reduced check program costs by as much as 64%. By working with these types of experienced partners, the tasks of researching, analyzing data, negotiating contracts and the reports they all entail can be safely placed in the hands of seasoned professionals while your credit union springs toward operating more efficiently.

Check Program Consulting

Check program consulting is a unique solution that is focused on improving check program costs, efficiencies and revenue predictability. With check program consulting, pricing models are used to identify fair market pricing to help reduce costs now and into the future. Staffed with experts in pricing strategies and negotiations, check program consulting firms continue to negotiate on your credit union’s behalf from start to finish, protecting your credit union and your bottom line.

Card Program Consulting

Have you reviewed your network configurations recently to maximize interchange? Reviewing and managing a debit card program can take months (often over six months) and puts strain on an institution’s time, bandwidth and resources. Metrics surrounding a debit card program are often housed in various silos, making reporting and analyzing of data difficult.

Card program consulting—a sister to check program consulting—focuses on lowering your transaction expense while increasing your interchange revenue. Consultants thoroughly analyze your debit card program expense and interchange down to the transaction level, lead and manage the entire formal review, and negotiate the best financial and contractual terms for your credit union, ensuring maximum profitability and the best interchange payouts.

From tornados to rainbows, the financial services industry is rebounding with optimism despite economic concerns. If credit unions can keep an optimistic focus on efficiency by utilizing consultative services that will help streamline operations and reduce costs, then the remainder of 2024 will have your organization singing in the rain.

Jack Imes is chief client lending consultant at Allied Solutions, which is one of the largest providers of insurance, lending, risk management and data-driven solutions to financial institutions in the US. He has 35-plus years of executive lending experience with both credit unions and banks. Recently, he served as the Chief Lending Officer at $2.65 billion JSC Federal Credit Union, Houston. Previously, he was the CLO at Honda Federal Credit Union and the VP/commercial lending at US Bank, among other top lending roles spanning close to four decades. At Allied, Imes brings his credit union and bank experience to serve as a strategic partner and advisor to our clients and sales team.

Allied Solutions is one of the largest providers of insurance, lending, risk management and data-driven solutions to financial institutions in North America. Allied Solutions uses technology-based solutions customized to meet the needs of over 6,000 banks, credit unions and finance companies, along with a portfolio of innovative products and services from a wide variety of providers. Allied Solutions is headquartered in Carmel, Indiana and maintains several offices strategically located across the country. Allied Solutions is a wholly owned and independently operated subsidiary of Securian Financial Group.