The National Association of Credit Union Service Organizations' (NACUSO) annual conference in Lake Buena Vista, Fla., brought together some of the most innovative people, credit unions, and CUSOs for illuminating discussions that touched all aspects of the movement.
Following are 10 points that provide a sampling of the conference sessions. For more thorough coverage, visit our NACUSO conference page or any of the hyperlinks associated with particular articles.
NASCUS: Find middle ground on CUSO review
John Kolhoff, chairman of the National Association of State Credit Union Supervisors (NASCUS), explained “the CUSO trap” for regulators. NASCUS has recommended to NCUA that examiners should focus only on the impact of a particular service offering on a CU’s safety and soundness, rather than evaluating the entire structure of a CUSO.
On the other hand, Kolhoff acknowledges that the interconnectedness of most operations makes it difficult to draw clear lines so one can easily evaluate that impact.
And he said the lack of a shared channel to distribute these reviews to investing credit unions hampers examiners’ efficiency and could prove costly to credit unions that would put their CUSO relationships under greater scrutiny if certain findings came to light.
Analytics can empower CUs’ message
Banks’ poor standing with consumers—especially young adults—would be an advantage for credit unions if only those consumers knew what credit unions were all about, says Fredda McDonald, executive vice president/chief creative officer for PSCU.
That identity crisis could prove credit unions’ undoing in the ongoing payments revolution, which revolves around the millennials and the rapid ascent of mobile technology, says McDonald.
If credit unions can’t explain why they’re different, they and banks will both be passed over in favor of new technology—just as Netflix’s successful digital strategy put out of business both Blockbuster and mom-and-pop video stores.
While banks’ deep pockets give them an advantage in constructing a brick-and-mortar and mass media presence, credit unions can go toe-to-toe in technology so long as they capitalize on the power of social media and analytics to reach groups targeted as likely members, McDonald said.
Two skills will set you apart
Robert Herjavec, a co-star on ABC’s "Shark Tank," became a successful Canadian entrepreneur not because of his college degree (which he received in English literature) but because of his instincts and savvy.
When asked what coursework he suggest his two teenage daughters pursue, Herjavec said all that matters these days is having a degree—any degree—because those without one can’t compete for jobs.
But he does believe certain skills have grown in importance during the information age.
“To be successful, you have to understand the language of success,” Herjavec said. “And the language of success is technology and money.”
Target data breach is ‘tip of the iceberg’
How’s this for ominous?
Herjavec, whose wealth springs from his early and ongoing investment in cybersecurity, scoffed at the notion that network breaches will decline thanks to companies stepping up their defenses in the wake of highly publicized incidents.
“Everybody’s heard about Target breach, PCI,” Herjavec said. “It’s not even the beginning. It is simply the tip of the iceberg.
“Right now, there are 2.6 billion humans on the Internet, and five billion IP addresses… By 2021, there will be roughly five billion people on Internet but there will be 343 trillion IP addresses. Everything will be connected. Everything. Any electronic device that is not connected to the Internet will be useless. I don’t mean a computer; I mean any electronic device.”
With that many targets, and no shortage of devious actors, the paradigm of protecting your company has shifted.
“I don’t want to scare people; I don’t like to live in fear. But today, the idea of preventing a breach is impossible. Anybody who wants to breach your organization absolutely, positively, 100% can,” Herjavec said. “Smart companies no longer talk about preventing a breach, but making sure that when there is a breach nothing’s taken. Network breach should not equal data breach.”
CUs should develop task force on aging
Credit unions should develop a task force to generate a two-fold strategy on their aging baby boomer-heavy membership, CUNA Mutual Group’s Hendrix Niemann said.
Part I involves helping boomers set themselves up well for retirement by conducting potentially difficult conversations about their holdings and investments.
Part II is figuring out how the credit union will handle the economic hit when Boomers “decumulate,” or spend down their holdings through use and for tax purposes. Developing or furthering relationships with their children is crucial to keeping that money in the credit union.
'What time is the 3 p.m. parade?'
Showcase exceptional customer service by answering the 'question behind the question' your customer has asked, according to the Disney Institute's Kendal Jolly.
“Don’t just look at it at face value—answer it so you exceed the customers’ expectations,” he said. "When they ask, ‘What time is the 3 o’clock parade?’ what they want to know is, ‘Where is the best place to watch the parade?’”
Credit union leaders should turn around this exercise on themselves, Jolly recommended.
“What’s the seemingly obvious question members come to you with again and again and again?” he asked. “How are you training staff to give people the answer they really want?
The power of predictive analytics
Credit unions have begun to harness the power of predictions by better targeting their mailings, routing online advertising through favorable IP addresses, and even determining proper levels of call center staffing for the inevitable peaks and valleys, reports Simon Gao of CUNA Mutual Group.
Using the random selection process, mailings to the top 40% of a credit union’s member file typically would yield a 40% response. Using a predictive model based solely on internal data, mailing to a select 40% of the membership generates a 65% response.
Motto: They ask, you answer
In what content marketing guru Marcus Sheridan dubs our “honest economy,” organizations succeed by establishing themselves as the go-to source for answers to consumers’ broad-based concerns, and providing clear and detailed information about their own products.
“Can you become that ultimate trust agent in your industry?” he asked.
Credit unions have a long way to go in that regard, Sheridan said.
His basis for that blunt assessment: In multiple online searches for common consumer queries about credit unions—whether framed positively or skeptically—the first page of results populated with links to information from banks, government associations, and crowdsourced sites such as Yahoo! Answers, but lacked any credit union representation.
CUSOs must respond to NCUA’s skepticism
Three factors have created the regulatory-heavy climate, according to former NCUA Board chairman Dennis Dollar:
- Congressional pressure to avoid another financial crisis;
- The Obama administration’s desire to achieve results by circumventing a divided Congress; and
- A regulator culture that believes policy solves problems.
“You’re at a bit of a moment of truth,” Dollar said. “This is a tremendous opportunity for you to step up to the major leagues and play an activist advocacy agenda to match the activist regulatory agenda.”
Seek improvement from within
Encourage “intrapreneurship”—actionable brainstorming by employees from all ranks of your business, say CUSO originator Mike Atkins, Open Technology Solutions, and John Best, Best Innovation Group.
“Everyone, down to the very last person on staff, must understand it’s their job to continuously look at what they’re doing and find a way to do it better,” Atkins said.
When developing a great idea, it’s crucial to adhere to the principle of MVP—Minimum Viable Product, say Atkins and Best. To ensure the project doesn’t get bogged down, be firm in your goal to focus only on the core product, and prevent others from tacking on useful but superfluous features.
“You’ve got to put the boundaries on it,” Atkins says. “Otherwise, you end up trying to boil the ocean.”