Across America, credit union leaders are under pressure. Not only must they consistently grow membership while competing against giant multi-national banks, they must also produce the “Holy Grail” of financial institutions – new deposits.
At Kony DBX, we focus closely on our customers’ business model, in order to deliver meaningful results. A recent, third-party evaluation by FedFIS, measured the financial performance of our credit union customers against the overall average. Armed with Kony DBX’s more streamlined, robust digital banking experience, are Kony DBX customers better executing against their business plans?
I’m pleased and humbled to report that the in-depth study validates our approach. Customers are locking in tangible results (see below) with the most important metrics available – financial performance. This translates into concrete metrics that Boards of Directors can measure and members can fully experience.
Kony DBX doesn’t just walk away after credit unions undergo digital transformation. We scrutinize their double bottom line – profitability and member satisfaction – to ensure their investment is paying off. In many cases, we continue to provide strategic counsel all along the way to help them integrate technology and human capital. That will not change.
At the end of the day, the lifeblood of every financial organization is its deposits, and our objectives are perfectly aligned with credit unions: delight and attract members, while growing revenue. The FedFIS study serves as an important touchpoint, but we will never be satisfied with the status quo. Kony DBX will always strive to raise the bar.
When drilling down into the types of deposits that Kony DBX customers derive from their members, they’re attracting high quality and high net-worth deposits with greater long-term value, based on the size and length of time deposits are held. This is where Kony DBX customers truly shine, to the tune of two full percentage points higher than the market average. While the market average credit unions saw a growth of 5.65% in these high-value deposits, Kony DBX credit unions grew this segment by a whopping 7.83%.
Kony DBX credit unions grew deposits nearly 1 full percentage point above the market average, with Kony DBX organizations at 7.44% vs. the market average growth of 6.53%.
As the all-important revenue metrics grow for Kony DBX credit unions, their costs are shrinking at the same time. Kony DBX credit unions are spending three percent less than the average market cost to acquire deposits. The Average Efficiency Ratio—or Cost to Revenue Ratio—for non-Kony credit unions is 70.51%. Meanwhile, Kony DBX credit unions are paying less – only 67.04% – for that same dollar.
When considering the previous three performance measures together—higher and better-quality deposits and lower costs—the impact on margins improves exponentially. When digital banking moves the needle on the bottom line, everyone wins. Member experience is enriched, and greater member loyalty ensues because members can transact at the time and manner of their choosing.
Once again, Kony DBX credit unions outperform their peers in this category. They attract and retain the most profitable members, thereby generating a higher rate of return on all credit union assets. Higher quality deposits translate into more assets in every deposit account.
There is a direct correlation between educated account holders (who fully harness technology) and higher account balances (available to be loaned). There is a slight difference between the two groups. While market average credit unions score a 0.95% return, Kony DBX credit unions are making a 1.05%.
While Kony DBX credit unions are increasing and improving deposits, membership is also growing. The average market growth for credit union members is 1.17%, and Kony DBX members are growing at a rate of 1.11%.
In closing, when looking at all metrics, it’s evident that Kony DBX credit unions are outperforming—and growing faster than—their counterparts.