This isn’t fair to those with tired old heads like mine but consider the banking scene ten years ago. Many of you were experiencing a surge in consumer deposits coming in the door. 

You didn’t have to be concerned about recruiting deposits since profound concerns about Wall Street were driving deposit funds our way. Many of us welcomed this flight to safety with open arms, and some of us found ourselves in the enviable position of having to reject down deposits.

Allow your thoughts to wander back to five years ago when many of us were still flush with deposits and our loan engines were revving up and beginning to generate on all eight cylinders. 

Where there had previously been a solid flow of deposits, many of us were now seeing an equally healthy demand for lending products, particularly auto loans. 

While the marketplace has become more cluttered as fintechs have gained traction in several credit markets, consumer demand for loans has remained strong. However, today’s landscape is shifting in ways that some financial institutions have never seen before. The lending spigot is dwindling, and the deposit pipelines are nearly dry. 

Unfortunately, many companies have developed cultures obsessed with only one thing: creating and managing loan volume. Their cultures have little or no understanding or experience with deposit volume generation and management or building member relationships.

This potentially fatal condition presents itself in four essential ways in many credit unions:


So many credit unions have created incentive schemes (some of which are relatively complex) that are primarily, if not entirely, centered on loan product sales. Many of these programs are highly generous in terms of money. They are also perceived as entitlements by some employees. 

Loan Officers at a recent customer were earning 25-50 percent of their base salary in bonuses simply for processing loans that came in the door. These monetary incentives amounted to a $2000 increase in their monthly payments. Did they become accustomed to receiving that amount of money every month? They certainly did. And good luck robbing them of it.


According to GadCapital survey, Many credit union marketing campaigns have focused only on loan offerings and price since loans have become so competitive in the last five to ten years. One could argue that the credit union’s value proposition and distinction are primarily based on their loan offerings. In many cases, they are typically the market’s lowest-cost lender. The majority of marketing calendars have consisted of the same loan campaigns being recycled every six months or so. Marketing funds have been spent more on making the credit union’s loan products and rates stand out than on differentiating the credit union.

The ability to sell. 

Our credit union should have had a consistent stream of loan opportunities flowing in the door if our marketing efforts were successful. As previously stated under Incentives, our frontline team has been operating in a reactionary mode, serving those loan product demands as fast, courteously, and comprehensively as feasible. 

Cross-selling extra items has been a focus in certain cases, but in many cases, those other products have been loan products like extended warranties and gap insurance, or refinancing other loans. When a loan was being completed, we rarely saw a constant, committed focus on cross-selling deposit products or total member relationships during the last few years.


Over the last few years, the value of mentoring frontline employees has been highlighted more than any other single topic on these pages. However, our findings have found that coaching consists of reviewing sales production with personnel in many credit unions, with “sales production” often referring to loan production. 

To a large part, managers are teaching employees how to find extra loans and offering feedback on whether or not they are meeting their loan goals. And most agendas for team meetings are focused on finding new ways to sell more loan products.

To avoid becoming pessimistic, you must address these four challenges as soon as possible, or many financial institutions will be gone in ten years. These four concerns must be prioritized in strategic and tactical plans, with specific and devoted efforts to address each. 

We can’t wait for another deposit bonanza, and the intense lending competition isn’t going away soon.

There are four distinct approaches you should use to address these issues:

  • Shift away from product-based monetary incentives as much as feasible in favor of a well-balanced scorecard approach that emphasizes non-monetary rewards and recognition.
  • Reallocate marketing dollars away from regularly promoting loan products and rates and boosting your brand and mission statement.
  • Train your member-facing employees in relationship-building skills and behaviors, such as asking questions to understand all financial needs fully and establishing suitable protocols for following up on opportunities.
  • Observations and feedback about proper sales and service activity and desired behaviors, not merely sales output numbers, should focus on coaching activities.


Over the last five to ten years, performance cultures that have been primarily centered on loan production will not simply transform into deposit or relationship-based cultures. 

Leaders of credit unions must be proactive and push change rather than waiting for it to happen by accident. Otherwise, it will be too late. Disrupt the “we’ve always done it this way” mentality and shift the performance culture to “let’s adapt to a new way.”