With the U.S. economic growth rate predicted to hold above the long-term rate of 2 percent through 2024,i credit unions and banks face an overall favorable outlook for the near future. However, pervasive market conditions, such as increasing interest rates driven by inflation, thinning margins and flagging employee morale could derail financial institution attempts to maintain the momentum of the home buying spree of 2020 and early 2021.
What’s a financial institution to do when market volatility comes knocking? Follow the 5 leadership strategies adopted by progressive banks and credit unions and take a people-first approach to creating a more profitable operating environment.
Put customers and members first
Banks and credit unions are well recognized for offering personalized support to customers and members, and that’s a culture that top leaders know how to maintain.
According to research conducted by Fannie Mae, consumers prefer to perform early tasks, such as learning about the mortgage process or filling out an application, online.ii Seventy percent of respondents preferred to submit documents digitally as well.iii
However, as consumers move deeper into their mortgage journey, they appreciate being able to speak to a loan officer or to perform tasks in-person. Progressive bank and credit unions understand this and demonstrate a people-first approach to operations by adopting mortgage technology that supports a true omni-channel environment.
Focus on employee development
According to recent surveys, maintaining staff motivation and morale is the biggest leadership issue credit union and bank leaders face.iv,v Record high origination volumes over the last few years have stretched resources thin, while the waning activity now creates concerns over job security.
Progressive bank and credit union leaders are taking a proactive stance to ward off worker disengagement through new approaches to employee development initiatives, focusing on career journeys instead of single opportunities.
“Some processors might want to become loan originators or they might want to become underwriting assistants or underwriters,” said Matt Sweetanos, Director of Mortgage Services at Member Options, a subsidiary of UA Community Credit Union. “So, we’re focused on creating employee development pathways for every single position.”
By preparing employees to advance throughout the institution and follow their own journey toward career fulfillment, progressive leaders are creating a home-grown pool of talent and preparing leaders of the future.
Update Communication Strategies
Technology has changed how we communicate both within a business and across society. Consider that twenty-eight percent of Americans aged twelve and up listened to weekly podcasts in 2021, a seventeen percent increase over the previous year.vi
Progressive credit union and bank leaders use these preferences to better engage both employees and customers or members. For instance, creating audio training materials makes it easier for staff to complete employee development initiatives, while how-to podcasts create engagement opportunities with both employees and customers or members.
Encourage Internal Cooperation and Commitment to Overall Goals
While it’s true that the credit union or bank culture is one of its greatest assets, the people first approach doesn’t always take on life within the internal structure of the financial institution.
“I’ve been part of organizations where the sales team and the operations team look like they’re at war with each other,” said Sweetanos. “And it doesn’t make any sense. We’re all trying to move in the same direction.”
On the other hand, progressive leaders understand how to unite teams behind organizational goals, often using advancements in technology to promote cooperation and unity by making it easier to share information.
Use Technology to Drive Down Costs
Recent data from the Mortgage Bankers Association indicates that lender profitability pursued a steady decline throughout 2021.vii Mortgage leaders see the writing on the wall as sixty-five percent of respondents to Fannie Mae’s December 2021 survey say they expect further declines in 2022.viii
For progressive leaders, however, thinning margins provide an incentive to shave costs through technology adoption. Recent advancements, such as cloud-based services and APIs, make it easy for banks and credit unions to create end-to-end digital workflows or to streamline operations with bolt-on capabilities.
The progressive leaders who take advantage of technology are creating sustainable and repeatable processes capable of decreasing costs. According to David Lykken, President and Founder of Transformational Mortgage Solutions, “technology is the single biggest area that lenders turn to when it comes to improving margins.”
To learn more about the strategies employed by progressive financial institution leaders, we’re sharing a wealth of information from leading experts in our webinar “Leadership Strategies to Be Successful in the Mortgage Market,” for individualized guidance from experienced professionals.
i “Leadership and Technology Strategies to Be Successful in the Mortgage Market.” Finastra, Nov. 17, 2021. Web. ii Tim McCallum and Jenney Shen. “The Pandemic's Impact on Mortgage Digitization and Homebuyer Satisfaction.” Fannie Mae, Jul. 15, 2021. iii Tim McCallum and Jenney Shen. “The Pandemic's Impact on Mortgage Digitization and Homebuyer Satisfaction.” Fannie Mae, Jul. 15, 2021. iv “Leadership and Technology Strategies to Be Successful in the Mortgage Market.” Finastra, Nov. 17, 2021. Web. v “Leadership Strategies to Be Successful in the Mortgage Market.” Finastra, 2021. Web. vi “The Infinite Dial: The Infinite Dials 2021.” Edison Research, Mar. 11, 2021. Web. vii “Leadership and Technology Strategies to Be Successful in the Mortgage Market.” Finastra, Nov. 17, 2021. Web. viii Candyd Mendoza. “Mortgage Lenders Anticipate Thinner Profit Margins Ahead.” Key Media. MPA, Dec. 16, 2021. Web.
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