Posted by Steve Stovall, Product & Experiential Marketing Manager, Credit Union Resources, Inc on 12/12/2018

By CO-OP Financial Services

Like most consumers, credit union members are increasingly shifting to online channels to shop for the holidays.

That’s according to an analysis of CO-OP credit union members’ credit and debit card purchases from Thanksgiving Day through Cyber Monday. 27.5 percent of all credit card purchases came from digital channels. That’s a more than 2-point increase as compared 2017’s 25 percent. Debit transactions that came from digital channels similarly increased by 2.2 percentage points (from 14.8 percent to 16.6 percent).

Our findings were in close alignment with a November 24 report by Adobe Analytics, which found that this year’s Black Friday was the first day in history to see more than $2 billion in sales from smartphones.

In addition, the average amount of money spent per cardholder was also up this year, and in some cases, significantly. Credit cardholders spent an average of $292 over the five-day period, up almost 20 percent from last year’s average of $246. For their part, debit cardholders spent an average of $210 from Thanksgiving Day through Cyber Monday. That’s an increase of 11 percent over the same period in 2017.[/caption]

Digital Spending Outpaces Other Channels

CO-OP’s analysis indicates that online shopping drove greater engagement at higher volumes. For example, the transaction data we reviewed shows that cardholders tend to spend more per transaction when shopping online. Over the 2018 holiday shopping period, the average electronic transaction made with a credit card was approximately $100, while in-person credit transactions averaged $77.84. Debit cardholders displayed similar behavior with electronic transaction averages at $54.80 vs. in-person averages at $40.70.

Members Shop for Experiences during the Holiday Season

Cardholder spending data also appeared to confirm a trend consulting firm Deloitte and others have observed over the past several years. Consumers, even those who value the ease and convenience of digital shopping, continue to value real-life experiences.  Of the credit union member purchases made over the Black Friday shopping weekend, travel agencies, hotel and restaurant merchant categories all experienced sizable increases in both number of credit card purchases and average amounts of those purchases, each up at least 30 percent. While this may indicate more people traveled during the Thanksgiving holiday weekend, it may also be a signal of that “experience-over-things” trend.

According to Deloitte, consumers have increased their budget for experiences over the last five years. In 2018, experiences represent 40 percent of the planned holiday budget. And, PwC predicts consumers will spend more than 50 percent of their holiday budget on travel and entertainment, including hosting families in their homes and coordinating trips to celebrate with relatives.

Why Spend Analysis Matters for Credit Unions

Analyzing where and how members are spending is vital to achieving top-of-wallet status. It can also help you design the kind of personalized, predictive experiences members are increasingly looking for… during the holidays and beyond.

CO-OP’s portfolio of Digital Payments Solutions can help you stay top-of-wallet by meeting the ever-growing technology demands members expect, and giving them access to advanced payments apps and wearable payment options. Learn More

This blog originally posted at the CO-OP Financial Services Insight Vault on December 6, 2018. The original post can be found here.

Categories: Business Partners, Marketing & Printing, Sales & Service
Posted by Mr. Bill Meyer, Communications/Public Relations, Credit Union Direct Lending on 12/11/2018

Two hundred years ago, Napoleon noted that “war is 90 percent information.” In today’s highly competitive financial services industry, financial institutions must have good data…and know how to use it. Credit Unions are realizing the importance of automating their marketing efforts, leveraging their data, so that products and services intersect as efficiently as possible with member need and opportunity.

 

In Intuvo’s recent white paper on credit union marketing automation, we discuss the new ways that marketing experts are responding to the actions their customers are taking. In the case of credit union marketing, we’re talking about trigger marketing and it’s allowing marketers to respond more appropriately to their members needs and earn more business.

 

Trigger marketing takes marketing automation to a higher level, and makes every marketing message more effective, because it is delivered to the prospect at a time that makes sense to that prospect. This mitigates the risk of sending the wrong marketing message to a prospect or overloading them with marketing messages when they are not ready to buy. 

 

As lenders, credit unions have customer data in their core banking and lending systems that can be integrated into an advanced marketing automation platform. This intelligence allows the marketing team to effectively leverage information the credit union already knows about its members, to match them with meaningful marketing messages automatically, and connecting them with the right loan products and services.

 

For instance, when a member closes a new mortgage loan and is in a position for additional credit, the system can be programmed to automatically add this member to receive messages about other loan products, such as new consumer and auto loans. Likewise, should a member take out a new auto loan, the system will know not to send them additional marketing information about those loan products. Making offers to a member that cannot take advantage of can damage the relationship.

 

Having this information, and leveraging it to better serve your member’s needs, is more than half the battle. Knowing a need or opportunity and efficiently executing your financial services outreach through trigger marketing, all while strengthening customer relationships, is a superb strategy.

 

Intuvo’s automated marketing and sales engine uses the activity-based marketing model and is designed specifically to help credit unions capture more loan opportunities and improve the borrowing experience. Credit unions that rely on Intuvo’s digital marketing solutions have consistently increased loan volume by up to 30%.

 

This article was written by Jeff Shood, CEO of Intuvo, a CU Direct company.

Categories: Financial & Auditing, Marketing & Printing, Strategic Planning & Consulting, Technology Consulting & Compliance
Posted by Mark Wert, Senior Advisor, Catalyst Corporate FCU on 11/29/2018

In 2005, interest rate derivative and bond traders wanted more volatility in the rates markets. Interest rate volatility markets were all but dead, and traders complained about being bored. They had a point, and to be fair, traders need some volatility to make money.

But the old adage, “be careful for what you wish for,” holds true. With a flat, risk-free curve and little regulation, financial engineering had hit an all-time high. Spreads were so tight, and it was very hard to create structures for investors to pick up a measly basis point or two on the margin. 

We know what happened next.  We got volatility – and then some. Credit dried up, liquidity disappeared, equities were pummeled, the economy came to a standstill, jobs were lost and margin calls multiplied.   

Over time, albeit some extremely tough times, equity markets recovered as indices pushed new limits and set new highs year after year. But naturally, economists began to wonder what would happen when the Fed began to remove accommodation and started to deleverage their balance sheet.

What happens to liquidity?

During this expansion period, easy money and low discount factors drove asset prices higher. Deficit after deficit ballooned U.S. Treasury needs and led to record-setting amounts of outstanding debt.

We are now into the fourth year of Fed tightening and balance sheet deleveraging (though shrinking the balance sheet is more recent). Rates have moved higher, which has impacted rate sensitive markets. For example, housing growth continues to slow.

However, a potential slowdown in the economy, a trade war with China, widening credit spreads, corporate earnings that may have already peaked, geopolitical concerns, and tax cuts may all cause concern as the Fed pulls support and eventually lets the markets act on their own. This is all occurring as the Fed continues to drain liquidity. Financial institutions, such as Catalyst Corporate, have modeling tools available to assist credit unions with liquidity management during any possible volatility.

Welcome back, volatility!

Volatility is back in most markets, but it is still fairly nonexistent in the rates market. Treasury yields have remained range-bound. This cannot be said for equities, currencies, energy/commodities, etc. Oil has fallen off a cliff, and natural gas just went through its annual spike.

Will volatility continue?

We don’t know yet. If a recession is on the horizon, what will happen first? In the past, we’ve seen currencies devalued, a NASDAQ bubble, a mortgage market collapse, etc. Will we have a credit crisis in the corporate market next?

The cash to debt ratio for corporates fell to its lowest level ever – 12 percent – in 2017. Credit spreads are widening, the leverage loan market has ballooned, corporate debt is at an all-time high, bond holders are unable to move big positions as dealers are balance-sheet constrained due to regulation. Will this cause the Fed to overtighten? Will equities go through a prolonged correction? Will oil prices stop dropping? Will corporate treasurers be able to refinance their debt?

Historically, the Fed’s over tightening generally pushes the U.S. economy into a recession. The markets don’t like uncertainty when it comes to the Fed. But, with so much unknown as we get closer to the end of a Fed tightening cycle, market volatility is back, reminding us to be careful what we wish for!

Categories: Business Partners, Financial & Auditing
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