By Chuck Klein
With the rapid pace at which financial services technology changes, credit unions are continually presented with opportunities to handle business better, whether it be enhancing member service or operating more efficiently – or, in many cases, both. The evolution of Check 21 legislation 10 years ago dramatically changed check processing as we know it; now systems automation and mobile and payments innovations dominate budgeting discussions.
Unfortunately, many credit unions find themselves behind on the technology bell curve. There comes a time, though, when a static technological philosophy can become a detriment to the institution’s success. So credit union executives must ask themselves, “Are we too vested in the status quo?”
Such status quo credit unions do not necessarily reject technological advancement, but rather are somewhat apprehensive to initiate a dramatic operational transformation. But why is that, especially when doing so can leave them in a position to miss clear benefits and become less competitive?
Much of it lies in the fear of change as well as that of monetary commitment in these economic times. While the age-old question, “Why fix something that isn’t broke?” seems to make a strong argument, consider, “Why not fix something that can be improved?” Credit union executives must realize that the long-term return of tech investment – whether member facing or for internal purposes – can outweigh whatever upfront costs and learning curve associated with new technology.
Take for instance the hard-to-measure benefits of electronic document workflow, digital signature capture or even various mobile offerings that, during their due diligence, too many credit unions fail to recognize. In reality, several of the primary technology benefits that generate a return on investment for the institution are hard to measure:
- enhanced member service delivery through the use of online and mobile channels, removing geographic barriers and structured branch hours that otherwise would limit business opportunities;
- added efficiency from the removal of paper for in-branch processes to positively impact employees’ productivity in addition to more evenly distributing expenses across various tasks;
- safer, more secure delivery alternative with electronic documents that also eliminates courier costs not to mention expedites receipt; or
- renewed system of checks and balances required for the oversight of successful account origination processes.
A credit union’s management team is charged with seeking better ways to do business, and therefore its decisions drive the sense of urgency regarding new technology implementation. In evaluating the services they need and efficiencies required to remain competitive, executives must recognize the often understated benefits of self-service delivery channels as well as in the automation of their own workflow. If not proponents of technological advancement, then executives must have a clear understanding of the intangible benefits that they cannot afford to ignore. After all, the credit union’s vitality relies on it.
While the buzz in recent years has focused on capturing younger generations to secure that business as these members grow in their financial maturity, studies are showing that all generations are gaining comfort with technology and especially are favoring online channels for banking services. Add to that, true growth starts from within – credit unions must evaluate what is being done to satisfy member retention. Only when a credit union can mature the relationships with existing members can they expect to develop new ones that will also last.
A credit union’s outlook on innovation and automation, interestingly, is not relative to asset size or membership numbers, but rather is a more widespread matter. There are seemingly small credit unions across the country that actually are mighty technological forces. Avoid being a status quo institution and show confidence in your credit union’s growth capabilities that are powered by technology. Yes, examine the ROI of every decision – but do not stop there. Instead, look to what supports that return. Credit unions must appreciate the intangibles to appreciate what technology can offer, because members already do.
Chuck Klein is CEO of Integrated Media Management, a company specializing in the paperless technologies that automate the space between a financial institution’s core host system and imaging back-end, including digitized signatures in branch or remotely.
From Credit Union Management magazine, also read "Why Workflow?" and "Replacing Paper."
