Recently, I was contemplating the idea of what our credit union might look if we as an industry could start over. As a credit union board member, I have seen that board working on becoming more strategic with board meetings and finding ways to improve. This effort made me think about what we could change if our credit union could start anew. Of course, I want to start over with our current member and asset base. Is that reasonable? Probably not, but bear with me.
The branch equation
Where to begin? Probably with branches.
My credit union currently has three. Would it be better to go without any branches? Maybe we only need one or two? Research indicates people are using online and mobile access for most of their transactions. This same research indicates that members still want to walk into a branch when needed. People like to speak in person for more complex transactions and problem resolution. So while branches may be less important, many members still want to walk in when they feel the need. Figuring out the right number of branches is the big challenge.
What’s the right number of employees?
Next up would be employees. If you have none or fewer branches could you reduce the number of employees? Maybe. Maybe not. Fewer branches might mean more telephone calls, emails, and text messages. You might need more people for those activities and fewer branch people.
Fewer branches might also mean using ITMs where centralized customer service people handle transactions via video. When they are not doing that, they answer phone calls or respond to email and text messages. To answer the people question you would need to decide if ITMs are the way to go, and if not then whether you need more people to answer phones and respond to emails and text messages.
Picking a core processor
This is as important as the first two topics. Would you still use the same core processor? Do your employees find it easy to use? What would make your current core software better?
Does your core processor provide the kind of online system that meets the current demands of your members? Do members find online banking easy to use? Is it flexible? Does it work well on mobile, tablet, and desktop devices? What would make your current online banking better?
Office space or digital space?
The COVID pandemic has changed much about work in the last two years. In the beginning, we felt we had to work remotely. As businesses start to feel like working in the office is more acceptable, do employees want to go back to the office? Recent surveys find that employees prefer to work at home because it saves time and reduces stress by eliminating commutes. The desire to work at home varies of course. Some people want to work at home full-time, some part-time, and some want to work in the office full-time.
In light of this desire to work full-time or part-time at home, you may be able to substantially reduce your office space requirements. This could save on rent expenses for office space but could increase costs for home office stipends. In the employment market of today, employees have a bit of an upper hand. Keeping the best employees requires a flexible work arrangement.
Your website and app
Does your website currently do everything you want it to do? Does it help visitors? Does it encourage visitors to take action? Does it work well on modern devices—both large and small? How would you change your website? What content would you add? What content would you delete?
How about your mobile app? Does it meet the needs of your members? Does it provide the credit union with sufficient information to understand how members use it? What would make it better? More content, ads, help? Or less?
Products
Do your current products meet the needs of your members now? Would you add new products? Eliminate some? Ask yourself, how do my products satisfy current members? Are they complete?
I recently read an article about an insurance CUSO. What if we offer products and services unrelated to banking like insurance? Would we buy an insurance agency? Start a new one? Work with a CUSO? Is this a good strategy?
Maybe the credit union of the future is an organization that puts together products and services offered by others including the banking component. The credit union might consist of staff that simply oversees the delivery of said products and services. Does that make sense as a strategy?
Developing a strategy
I mostly listed a bunch of questions, so you might ask “what’s the point?” We do this every day when we make decisions. We ask a question or are presented with a problem, assess the options, and make a choice. These are normally considered tactical decisions.
One of my primary responsibilities as a board chair is to think strategically. Thinking strategically is not what most of us do in our daily lives. We are just trying to solve a current problem or question. We do not always think about the long-term direction, we just solve the problem of today.
Strategic thinking and planning are challenging because we have to look at where we are now, determine where we want to go, and then make a plan to get there. As a board member, I can only think and plan. I do not get to execute, which is where most of us want to be—making things happen.
Most of us spend our lives doing, rather than strategizing and planning. Board members must stay out of the day-to-day operations of the credit union while laying out a plan. Developing a strategy, having the board approve it, and then watching the executive team implement it is a very interesting process to participate in and watch.
Credit union boards provide extremely valuable education on the everyday challenges credit unions face. Developing a strategy to help a credit union grow and minimize those challenges is an everyday learning experience for board members. Get involved in your credit union and you won’t be disappointed with what you learn.
