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Working together amplifies credit union strengths in member service and community impact.
The mission of $42 million Stabilization Central Credit Union, Vancouver is to “provide stability and strength” to credit unions in British Columbia. Stabilization Central CU CEO Bill Corbett, ACCD, CCD, is a CUES member with 18 years of experience with the Canadian credit union system, having worked in diverse roles at multiple credit unions in Canada, including the largest, $33 billion Vancity, also in Vancouver. Corbett’s journey has helped him understand credit unions, their operations and their crucial role in serving their communities.
He notes that Stabilization Central CU operates in the critical space between credit unions and regulators in British Columbia. “Our primary function is to provide proactive support, ensuring effective operational, risk management and governance practices in credit unions,” he says. Stabilization Central CU “also assists in the remediation process for credit unions facing challenges in meeting regulatory standards.
“Credit unions face many external and internal challenges today, including fluctuating interest rates and geopolitical tensions,” continues Corbett. “They’re also grappling with significant internal digitization and infrastructure investments. In the Canadian context, these challenges are compounded by systemic changes like payments modernization and the introduction of open banking. Focusing on effective risk management and governance is paramount.”
However, as credit unions focus on their internal frameworks, they must also remain engaged externally, stresses Corbett. “A common pitfall for credit union leaders and boards is to become too internally focused, which results in diminished collaboration. Credit unions can also fall into the thinking that they know best or that their members or community are uniquely different. Or they want to support their own talent and build their own solutions. All can lead to neglecting collaborative opportunities.
“Despite a smaller number of credit unions today, all can benefit from system-based, collaborative solutions,” Corbett continues. “Whether leveraging technology solutions or sharing back-office processes, collaboration enhances member service and community impact—and true differentiation for credit unions is their exceptional member service and community impact. Collaboration can only amplify these strengths.”
Challenges Ahead
Canadian credit unions face a diverse set of challenges as they navigate today’s evolving financial landscape. According to Corbett, these also include:
The need for lobbying. In 2015, Canadian credit unions began to observe a merging of lobbying efforts and governmental relations into a single national entity, the Canadian Credit Union Association. It happened over several years, starting in 2015, with the last province joining in 2022. The consolidation has brought about efficiency and a united front in certain sectors. “However, it also means that revenue is distributed among fewer entities, potentially hindering their success and ability to innovate,” he continues. “A case in point is technology solutions, particularly those owned by the credit union system, which credit unions generally favor. Acknowledging the value of these system entities and their collaborative potential for creating system-centric solutions encourages unity—and engaging with these entities helps prevent fragmentation, reinforcing their capacity to support credit unions.”
Regulatory expectations. The increase in regulatory burdens might be a point of contention for some, but it’s an aspect of the industry that isn’t going away, says Corbett. Instead of resisting, credit unions should seek opportunities to collaborate and develop effective risk management strategies that address these regulatory concerns. In Canada, regulators are open to various solutions if they align with risk management expectations. Credit unions should work together to develop effective risk management strategies that meet regulatory standards instead of resisting increased regulation.
Corbett notes that one of the things Stabilization Central CU does is build foundational toolkits that are a starting point for credit unions to develop policies/procedures to meet regulatory guidance. “We don’t do the work for them, but we get them started so that all credit unions who use the toolkits don’t have to start from scratch.”
He adds that some Canadian credit unions have also successfully set up organizations like U.S. credit union service organizations that build resources to meet the second or third line of defense infrastructures. “Within some organizations, credit unions have come up with creative solutions to meet regulatory expectations, such as a tailored approach to credit adjudication that may be different than regulatory guidance but still meets the principles of what was expected.”
Chartering new credit unions. The creation of new credit unions in Canada has been rare, with stringent regulatory and capital requirements acting as barriers to entry. “While regulatory barriers make establishing new credit unions challenging, existing ones should seek ways to amplify their core mission while serving their communities,” notes Corbett. “However, diversification through the chartering of new entities in Canada might be a short-term solution, and credit unions should consider other ways to embody their vision. It includes finding new ways to collaborate and offering key technologies to serve members effectively in this modern era.” (Read about Ontario’s first new credit union in more than a decade: Lighthouse Credit Union.)
Moving Forward
Corbett stresses that Canadian credit unions continue to be a shining example of resilience in action. Still, there’s work to be done as they address the new challenges of 2024.
He recommends a two-fold approach:
1. Cultivate the right leadership. Leaders with a collaborative mindset are essential—and the need for leaders with this mentality has never been greater, Corbett says. These leaders can either be seasoned professionals hired from outside the credit union system or talent recognized and cultivated from within. The key is to instill a system focus, emphasizing each credit union’s shared values and goals.
Corbett notes that leaders who energize and align their teams around collaboration can promote making meaningful partnerships across the industry—and credit unions should ensure their boards align with and support these efforts.
“For example, boards can challenge management on courses of action they’re proposing—and specifically ask if they’ve considered collaborative options or system solutions that may be available,” he says. “It’s also crucial to set the tone from the top. Is your board collaborating on governance practices, learning from other organizations, attending industry events, and bringing back insight for other board members and the organization? All can open the door for further collaboration.
2. Find common solutions. Collaborative approaches, including shared digital banking platforms, risk management processes and even HR or finance solutions can strengthen individual credit unions. In turn, aligning with these unified opportunities can amplify the capabilities of individual credit unions.
Embracing Our Roots With Collaboration
Corbett notes that the heart of credit unions lies in their commitment to serving their members and communities.
This “can mean finding collaborative solutions for the banking demands of members while preserving the core values and missions that differentiate credit unions,” he says. “While innovation is critical, maintaining the essence of what sets credit unions apart and their commitment to the community and members is essential.”
Corbett says that by building on their strengths and adapting to challenges, credit unions can continue to thrive and serve their communities effectively in 2024 and beyond. He quotes H.G. Wells as a final thought: “Credit unions must ‘Adapt or perish, now as ever, is nature’s inexorable imperative.’ Leaders who recognize this, focusing both inward and outward, will steer their institutions toward a resilient and prosperous future.” cues icon
Owner of Fab Prose & Professional Writing, Stephanie Schwenn Sebring assists credit unions, industry suppliers and any company wanting great content and a clear brand voice. Follow her on Twitter @fabprose.
