Frugal Innovation: A Delightful Byproduct of the Recession?
By Anne Legg
Some economists say there are signs the recession is over. That may be, but until loan losses decrease, financial belts will most likely stay tight.
In the meantime, we can at least look back and see what we’ve learned from this wacky financial rollercoaster ride we just took—or are still on.
One of the obvious takeaways is how we’ve managed to do more with less. This can also be a form of innovation—“frugal innovation.”
Frugal innovation involves finding ways to improve your organization and members’ lives through the use of technology when money and time are scarce.
The Economist (April 19) explains frugal innovation and offers three ways to reduce costs:
1. Contract out more work. This is an opportunity to review current vendor relationships and determine how vendors can help you cut costs.
2. Find imaginative ways to use existing technology. A great example of this is found in India, where a telecom entrepreneur has reduced a bank branch to a smart-phone and a finger print scanner, allowing ATMs to serve rural customers.
3. Apply mass-production techniques in new and unexpected areas. Mindray, a Chinese firm that specializes in cheap medical products such as electrocardiograms, has reduced the expensive lithium-ion batteries its products use. The company now uses less-costly raw materials and makes the batteries in less expensive ways, reducing the cost from $40 to $12.
So how can the credit union industry benefit from frugal innovation?
With frugal innovation, credit unions can improve members’ financial lives. Think about it: Credit unions have great technology at their fingertips—online banking, wireless banking, mobile banking, and a vast array of social media and lifestage segmentation products we can customize for members.
And the core processors probably hold more information about members than their parents do. With just those technologies, there HAS to be something we can do improve the lives of our members.
Well, what are you waiting for—the recession to be over?