Takeaways from a Year in the CUSO Space
2024 is in its final quarter. As one year concludes and preparations are made for the year to come, I like to look back, reflect, and ponder what we learned and how that knowledge will shape the future.
When it comes to CUSOs and their continued expansion within the credit union industry, I’ve walked the walk and talked the talk this year. Webinars, podcasts, conferences, and trade shows; I’ve discussed the nature of CUSOs and their role in the strategic growth strategies of credit unions with audiences across the country. These are some of my takeaways after thousands of travel miles and lots of conversations:
- There is a CUSO for everything — This is a very exciting time in the CUSO space. Not just because of their continued growth, but because there is now a CUSO to fit every shape, size, and need. CUSO customization allows for greater cost savings while powering growth and increasing efficiency.
- CUSOs expand the breadth of outreach, regardless of credit union size — The benefits of CUSOs can certainly contribute to expanding membership, especially among younger consumers. But just as importantly, CUSOs drive a greater use of products and services by existing members. CUSOs apply whether you are trying to move your average from 1.8 to 2.2 or increase the number of products per member from 2.3 to 2.8.
- The CUSO equity model has proven to be a winner — As more and more credit unions make the decision to invest in CUSOs, they are following what has become a widely recognized best practice for the process; developing CUSOs with leadership as equity holders and/or credit union owner-members are users. By using this “side-by-side” approach, risk is reduced, and more key stakeholders feel that have a seat at the table.
- Credit Unions are being proactive with their boards — By developing CUSO policies at the beginning of the growth process, credit unions are laying the foundation for a smoother and more successful transaction. When boards feel included from the outset, they tend to coalesce and align their support for the new venture.
- What’s old is what’s new again — A trend that came back in vogue in 2024 and will certainly continue in 2025, is that of tried-and-true CUSOs involved in recurring revenue and ‘required’ products for members. Fintech investing will certainly continue, but we see a massive uptick in areas such as property and casualty insurance, wealth management, compliance and title agency CUSOs.
Given Capstone’s experience in 2024 and over the past two decades advising credit unions and CUSOs on growth and helping execute CUSO transactions, I am now even more firmly committed to my belief that CUSOs are the best vehicle for growth available to credit union leaders. As 2024 makes way for 2025, and I prepare for a new year of CUSO challenges and opportunities, I am excited for what’s next. Here’s to a future where CUSOs help make the aspirations of today the realities of tomorrow for credit unions and their members.
John Dearing is Managing Director and Partner with Capstone Strategic. He can be reached at JDearing@CapstoneStrategic.com.
