Your CU’s technology integration efforts must link to differentiation strategy.
By Butch Leonardson
In The Discipline of Market Leaders, author Michael Treacy says organizations can choose one of three paths to differentiating themselves from the competition: product leadership, operational excellence through scale, or customer intimacy.
If credit unions want to stand out in the financial services marketplace, they’re probably going to want to focus on the path of customer intimacy, says Ron Shevlin, research director for Cornerstone Advisors, Inc., Scottsdale, Ariz.
Getting that perspective from Shevlin’s research findings is not surprising, considering that financial services offerings are almost commodities, and that credit unions are fairly small operations known for their connection to members.
But, according to Shevlin, getting to a unique differentiation strategy (such as “We are the place for first-time home buyers”) will require credit unions to overcome a key barrier: their “swim lane” organizational structures. Most CU executive teams are organized by function, such as HR, retail/experience, lending and so on. These functional “swim lanes” don't match up well with how our members interact with the CU.
Here is an example. A CU has a goal to provide the same or a very similar delivery experience to members across all physical and virtual channels. Successful execution of this must include staff training, marketing, product management, technology, branch management, facilities management—in other words, the C-level executives must all be thinking more broadly than just their own functional areas.
If you think about it, credit union members may well cross over between financial services delivery channels more than credit union leaders communicate across departments!
When a CU’s differentiation strategy transcends organizational silos and really starts to get legs, the IT group needs to be able to quickly bring in and integrate new applications and functionalities that specifically support that strategy, according to Brian Bodell, CEO/founder of Finivation, New York. When executives stop swimming only in their own lanes, they all have “helping execute on the brand strategy” as their top priority. They no longer say things like, "Oh, that strategy is up to our retail/branch executive.” Instead, all the leaders—and, by extension, everyone—across the organization become stakeholders in delivering the member experience.
Accordingly, credit unions need in-house or hired excellence in systems integration for core banking systems, debit and credit card networks, shared branching networks, mobile/online banking, loan origination and servicing, credit bureaus, funds transfer and bill-pay.
In all, a credit union’s chief information officer must be intentional and believe in the integration strategy, be able to work across all channels and devices, and provide agile responsiveness to the CU's strategy.
Butch Leonardson is director of IT leadership for CUES Supplier member and strategic provider Cornerstone Advisors Inc., Scottsdale, Ariz.
Experts from Cornerstone Advisors will lead CUES School of Payments, April 19-20 in Chicago.
Leonardson will co-lead CUES School of IT Leadership, slated for Sept. 27-29 in Charleston, S.C.
