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THE MOBIlE BankIng ISSUE march 2013 VOLUmE 8 ISSUE 3 9.95 under the hood Expand Your Auto Lending Vocabulary with AutoIMS Louder than noise Payment Matters Is it Time for a Chief Outsourcing Officer Can Members HEAR Your Brand LOYALTY REVENUE AUTO LOANS with AUTOPILOT LENDING by SWBC AutoPilot Lending helps you manage the lending lifecycle from beginning to end enabling you to grow acquire and retain borrowers increase auto loan volume and improve your auto loan performance and revenue. CALL AN SWBC REPRESENTATIVE AT 866-316-1162 OR SCAN THE QR CODE BELOW TO LEARN MORE SWBC 2013. All Rights Reserved. 5540-922 0213 COnTEnTS Credit Union BUsiness MarCH 2013 V O l U M E 8 I S S U E 3 4 6 8 10 12 18 22 Pov Auto BUsiness 101 Tim O Hara networkIng 26 30 36 40 debIt MAtterS Payment Matters Suzanne Savage cu content is it Time for a Chief Outsourcing Officer Credit Union of new Jersey Breakfast Club networking Meeting Murray Halperin AchIevIng SkILLS Holly Herman cu newS Louder than noise Laura Enock Can Members HEar Your Brand MArketIng MAtterS Player vs. Pretenders Cyber security as a Competitive Advantage for Credit Unions Jeff Carter under the hood CRM Lead Generation & Referral Tracking for every Credit Union Tony rizzo cu SPotLIte Sharon Sweda AG Credit supports Rural Growth expand Your Auto Lending Vocabulary with AutoiMs Joe Miller cfo currency Get it for the entire executive team subscription Does it Make sense to Use an investment Adviser Emily Hollis LeAderShIP Women Leaders Dr. Sandra L. Torres should They Team Up or Lead March 2013 Credit Union BUSInESS 1 aBOUT US Publishing Team Tim O Hara Publisher tim Steve Magnuson Managing editor steve Iliana Nord Operations Manager iliana Patti Manzone Designer Homer Marshman III Circulation Director THE MoBilE BAnking iSSUE march 2013 VOLUmE 8 ISSUE 3 9.95 under the hood Expand Your Auto Lending Vocabulary with AutoIMS Louder than noise Cyber Security Competitive Advantage for Credit Unions Staff Writers Laura Enock CU Content Holly Herman achieving Skills Emily Hollis CFO Currency Suzanne Savage Debit Matters Sharon Sweda CU Spotlite Tony Rizzo Marketing Matters Dr. Sandra L. Torres Leadership Can Members HEAR Your Brand Subscriptions Credit Union BUSINESS is published monthly (12 issues per year) by CU Business Magazine inc. A one-year membership costs 89 for print or 69 for Digital. An online membership form is available at Contact Information Credit Union BUsiness Magazine P Box 2223 .O. Palm Beach FL 33480 (561) 282-6015 (561) 588-7711 (fax) tim Contributors Jeff Carter Murray Halperin Joe Miller Sales and advertising Bernie Fitzgerald Advertising executive Bernie or 561-282-6015 1 Greg Halpern Advertising services Manager Greg or 561-282-6015 4 2 Credit Union BUSInESS March 2013 FROM tiM M Publisher s POV y wife Tierney and I began our life together in Los Angeles more than 30 years ago. I traveled west to pursue a job offer and she followed a couple of weeks later. Although my new job turned out to be short lived my new wife while scanning the want ads to find a useful occupation for me learned that a person who sold cars might actually be issued one as partial compensation. This was very useful information indeed So I found myself selling (and driving) new BMWs and Porsches in sunny California. Life was sweet except that Jimmy Carter was in the White House and the prime-lending rate was hanging steady around 20%. It was a terrible time to sell cars but we sure had a whole lot of fun CU auto lending has grown into a huge and sophisticated industry over the last thirty years. This bread & butter lending product attracted more than 135 billion in new car credit union loans last year. That s nearly 15 billion more than the year before And in typical fashion credit union professionals have streamlined and energized car lending and buying with CUSOs like CU Direct Corporation and with sophisticated CU vendors such as AutoIMS. Our Under the Hood cover feature this month centers on the remarketing of vehicles and the star of the feature is AutoIMS a sophisticated and impressive company founded just 15 years ago outside of Atlanta. AutoIMS has been an important advertising supporter of CU BUSINESS since we founded this publication in 2006. I have always been impressed with the company and the people who run it. I had lunch in November with Shannon Meadows the wife and partner of AutoIMS founder Don Meadows and with the author of this month s cover feature (and AutoIMS chief listening officer ) Joe Miller and came away with the knowledge that the less time between repossession and remarketing the better for your credit union Please take a look at Joe s informative article beginning on page 12 and learn how AutoIMS can help your credit union manage its vehicle repossession and remarketing business better and more efficiently. You ll also learn how Don modeled his business after credit unions knowing that members always come first. Enjoy 4 Credit Union BUSInESS March 2013 YOUR OWN AISLE IN AS LITTLE AS INSURANCE 90 DAYS YOUR AGENCY. YOUR BRAND. OUR EXPERTISE. You already offer your members an aisle for checking savings loans and investments. Now you can open an insurance aisle in a way that s working for credit unions nationwide with a full service insurance agency under your brand. Call 860.653.1134 for a free strategic assessment or go online at today. nETWOrkIng Credit Union of new Jersey Breakfast Club networking Meeting By Murray Halperin (Ewing NJ) It was the right time for Credit Union of New Jersey (CUNJ) to begin educating commercial real estate professionals in their marketing area about its Commercial Real Estate and Business Loan Products. Their biggest difficulty lay in deciding how to best introduce their products educate the community and solicit business while keeping to a modest budget and without draining too much time and energy from their existing staff. Sounds like a tall order but CUNJ successfully pulled it off. Here s what they did. Using a program developed and administrated by Biz Lending Center Inc. (BLC) the Credit Union decided to create a Commercial Real Estate Networking group called CUNJ BreakFast Club. The BreakFast Club networking group meets twice a year at CUNJ and includes movers and shakers in commercial real estate from NJ and Eastern PA including Commercial Real Estate Mortgage Brokers Realtors Accountants Lawyers Appraisers Contractors Developers Investors etc. joining the CUNJ BreakFast Club. Some brokers even sent loan opportunities during the initial stages of the Group s development. CUNJ found that there was a great deal of interest in their programs from this LinkedIn program without spending a lot of money on marketing or advertising. As their list began to grow CUNJ created a series of bimonthly email newsletter blasts and sent them to the growing number of people who were interested in CUNJ s message. Teaser emails about the upcoming BreakFast Club meeting began going out with the message SAVE THE DATE for an exciting and informative meeting The agenda for the meeting really began taking shape in mid-October. Creating the Agenda While developing the agenda it became clear to the organizers that the BreakFast Club meeting needed a guest speaker. As they kicked around a number of ideas they realized that the appropriate speaker must have name recognition be a person Club members would want to listen to and ideally someone who had some type of relationship with the credit union. Fortunately they hit upon the perfect candidate in Robert Prunetti President and CEO of the MidJersey Chamber of Commerce who agreed to become their keynote speaker. The MidJersey Chamber of Commerce had just completed a re-branding was developing plans for expansion and was involved in a number of other new and exciting projects in the area. Mr. Prunetti was more than enthusiastic about sharing this information with the BreakFast Club members. Once organizers had made their decision another ideal guest speaker opportunity presented itself. The New Jersey Economic Development Authority offered to send Tejinder Gill Senior Business Development Officer to speak at the BreakFast Club meeting. With two prominent organizations joining forces with the nearly 70-year-old local lender to help business owners find the development money they needed the agenda was Using social Media Initial planning for the January 30 2013 event began in August of 2012. CUNJ appointed several employees who became the CU s liaisons with BLC and helped organize the event and create the event s program. Their first steps were to identify invitees and come up with an agenda exciting enough for invitees to want to take 90 minutes out of their busy day to attend merely serving a good breakfast wouldn t be enough of an incentive. The next step was to figure out how to communicate with the market in a cost effective manner. The organizing committee created a group in LinkedIn called the CUNJ BreakFast Club which then became a member of other LinkedIn groups consisting of Commercial Real Estate Brokers Commercial Mortgage Brokers and other industry related groups in and out of the CUNJ marketing area. Discussions and information about CUNJ CRE and Business Loan Programs were exchanged with the members of these groups who began 6 Credit Union BUSInESS March 2013 nETWOrkIng becoming really interesting to CRE Brokers Realtors Developers etc. and products have become more prominent in the marketplace. We are hopeful that attendees will pass along our name to others in their companies and the people who did not attend are getting new email blasts group discussion messages and now tweets about this event and others that will be announced soon. We plan on holding the next BreakFast Club meeting in a hotel venue and inviting many more guests. Murray Halperin is President and Founder of Biz Lending & Insurance Center Inc. (BLC). Since 2004 BLC has created a number of programs all designed to originate and drive CRE Business and SBA loans and Business Deposits to Credit Unions all over the United States. Some of its proprietary programs include This program provides support to credit union business services departments by working with loan applicants to build a loan file for preparation and presentation to the credit union s loan committee and underwriting team. By using RM-Online the Credit Union frees up the time of its Relationship Managers and staff to prospect and close loans and not become paper pushers with the members. Delivering the Agenda and invitations With the keynote speakers in place the meeting agenda was quickly finalized. It included a great hot breakfast welcoming remarks and introduction by Andrew Jaeger President and CEO of CUNJ a review of CUNJ s Commercial and Business Lending guidelines from David Lodato an overview of how to get a loan pre-screened and quickly put through the system from Murray Halperin as well as the guest speaker s presentations. Allison Kell would help keep the meeting moving and conduct the raffle attendee s favorite part With the agenda set we made sure the invitation and registration process was easy and efficient for the attendees as well as CUNJ and BLC employees. By searching social media and online we found an all in-one program that combined an email invite system with a web site design that offered an easy-to-use registration system with check-in and a follow-up survey system at minimal cost. Thank you internet and social media The meeting room at CUNJ only had room for 40 people while the invite and email newsletter list had grown to over three thousand names. Although the invite program was instructed to stop accepting attendees at 50 names the last thing CUNJ wanted was to be overwhelmed with guest requests. So we matched zip codes to a mapping program and opted to send invites only to people within a certain radius of CUNJ s main office. In the event that we did not get a large enough response we would send another email blast with a larger radius and would keep doing this until the event was sold out. Fortunately that was not necessary. A week before the event a local CDC (Certified Development Company) and business partner of CUNJ called and asked to be part of the agenda. It made sense to include them on the agenda as part of the MIDJersey Chamber and NJ Economic Development Authority presentations. This rounded out the program with by offering Conventional Loans Local State Government backed loans SBA opportunities with the CDC and of course CUNJ Business and Commercial products. We are proud to report that the event took place without any glitches. It was well received by both speakers and attendees. Some of the Commercial Real Estate Brokers and Realtors brought loan opportunities to discuss and others sent in additional opportunities for review. Most importantly CUNJ s name rM-Online The BreakFast Club Helps build the credit union brands and programs with the movers and shakers in the CRE industry by targeting market segment(s) and educating them on why they should refer their clients to the credit union for a CRE loan. This is the only program of its type in the country that is exclusively crafted for credit unions. The BreakFast Club also works in conjunction with USA Benefits Group a nationally known 26 year old health and life insurance agency that is at the forefront of health care reform with a program designed to place agents near credit unionbranch offices to help introduce credit union s Health Care Private Exchange and drive new business to the credit unions. Murray can be reached at 561-393-3770 or by email at murrayh Credit Union BUSInESS 7 March 2013 aCHIEVIng SkIllS Player vs. Pretenders I By Holly Herman recently read an interesting article that offered some great tips on identifying who the players are on your team and who are the pretenders. Pretenders may look and talk the part of a team player but often fall short in helping the team achieve success. Pretenders put their personal agenda before the team s objectives. Here are some tips that you can use to distinguish between the two. 1. Players are service-oriented pretenders are selfish. Players perform for the benefit of others and their organization as well as themselves while pretenders do things that primarily benefit themselves. A pretender is singly focused on outcomes that are in his or her best interest. 2. Players are mission-conscious pretenders are position conscious. Players will cede a position in order to achieve the organizational mission. Pretenders will give up the mission to achieve a position. The progress of the mission is much more important to players than their place within it but a pretender will value his or her position more highly than nearly everything else. 3. Players deliver the goods pretenders only make promises. A player is a team member who can be counted on to complete a task every time. The pretender will claim the ability to do so but does not consistently execute. 4. Players are job-happy pretenders are job-hunters. Players love what they do and do it well. They find their work fulfilling and meaningful and are devoted to carrying out their responsibilities with excellence. Pretenders seem to think the grass is always greener elsewhere. Since they re constantly looking to better their situation they have little sense of loyalty and will break commitments if doing so helps them to get ahead. 5. Players love to see others succeed pretenders are only interested in their own success. A player is happy when another member of the team succeeds because they understand that success benefits everyone. The pretender sees success as a win-lose proposition and resents it when another person wins. 6. Players value integrity pretenders value image. A player can be counted on to do the right thing even 8 Credit Union BUSInESS March 2013 aCHIEVIng SkIllS when nobody is looking. Contrarily pretenders do the right thing when being watched and often do whatever is most expedient when not. They are more focused on appearance than character and rarely admit fault when mistakes are made. They tend to blame others for their problems instead of taking personal ownership. 7. Players make the hard choices pretenders make the easy choices. The price is paid on the front end with a hard choice the payoff comes later. Such choices almost always include risk. Pretenders avoid risk and ensure their choices have immediate impact with little regard to long-term gain. Players aren t afraid to make long-term decisions. 8. Players finish well pretenders fade out. Some employees start out as players but turn into pretenders often because they overestimate the results and underestimate the process. They make the choice to begin but tire of the work it takes to continue. Or they begin and proceed until they are confronted with the need to change. Unwilling to adjust they begin pretending in order to get by. On the other hand a player strives throughout the work process to get the desired results. Who are your players and who are the pretenders Players enhance a team s efforts and pretenders drag the team down. It s important for you to know the difference. Holly Herman is a former CEO of two credit unions Chief of Staff for National Credit Union Administration Chairman Johnson and currently an Achievement Coach helping individuals and organizations. She can be found at or contact her at Holly March 2013 Credit Union BUSInESS 9 CU nEWS Cyber Security as a Competitive advantage for Credit Unions few weeks ago Defense Secretary Leon E. Panetta warned that the United States is facing the possibility of a cyber-Pearl Harbor and has become increasingly vulnerable to foreign computer hackers who could dismantle the nation s power grid transportation system financial networks and government. The warning came in the middle of a two week time frame when cyber attacks on the biggest U.S. banks including JPMorgan Chase & Co. (JPM) and Wells Fargo (WFC) & Co. breached some of the nation s most advanced computer defenses and exposed the vulnerability of its infrastructure. For credit unions and community banks an attack does much more than cause customer inconvenience it could cripple electronic customer channels and prevent members from accessing their money or worse. The nature of these attacks was sophisticated enough and massive enough that even the largest of the financial institutions found it difficult to defend against the attacks which rendered their online banking services unresponsive and unusable for many hours. This was certainly an inconvenience for customers however the full extent of the damage may not be known for weeks or even months. Mr. Panetta also argued against the idea that new legislation would be costly for business. The fact is that to fully provide the necessary protection in our democracy cyber security must be passed by the Congress he told his audience Business Executives for National Security. Without it we are and we will be vulnerable. With the current cyber security legislation stalled in Congress President Obama is weighing the option of issuing an 10 Credit Union BUSInESS A By Jeff Carter executive order that would promote information sharing on cyber security between government and private industry. But this is simply a stop gap measure not a solution and many will likely argue that the regulatory burden is already stifling. After the election the new administration needs to make this top priority for both job creation and national security. Many of the recent regulatory actions including the DoddFrank Act were intended for the good of the banking industry but have had adverse impacts on the credit union model. The industry should not wait for the next regulatory fix. The cyber security issue is only getting more complex and we need CEOs of the credit unions and community banks to take a leadership role in putting an end to this. March 2013 CU nEWS Today with technology outpacing regulation and the banking industry s data and infrastructure constantly under threat of cyber attacks the time is right for credit unions to come together in a powerful show of force to formulate a comprehensive industry-wide approach for measuring monitoring and communicating threats and identifying members. One solution that will help pave the path to success when it comes to cyber security secure identity authentication. Bill Wansley senior vice president of strategy and technology at the consulting firm Booz Allen Hamilton put forth a concept in American Banker urging the banking industry to adopt standards and common means of identifying customers. I believe this concept with small modification for the credit union model could provide unique capabilities and strategic advantages simultaneously. Today with technology outpacing regulation and the banking industry s data and infrastructure constantly under threat of cyber attacks the time is right for credit unions to come together in a powerful show of force to formulate a comprehensive industry-wide approach for measuring monitoring and communicating threats and identifying members. Establishing a common identifier will allow credit unions to protect their greatest asset--their members--and quickly identify understand and share information about threats plan for different scenarios and build the systems required to effectively defend their interests. Currently at credit unions of all sizes the discussion of cyber risk is happening at three levels Boards discuss threats in the context of risk management and corporate reporting Senior executives determine the resources needed to mitigate risk and protect the firm s long-term performance and Technical teams develop new processes and integrate solutions to solidify their security operations. These are worthwhile conversations and third-party stakeholders will undoubtedly find the results beneficial. Only a common language that encompasses the identity of members technology and risk analytics along with business processes engineering and human capital development will provide the multidimensional approach necessary to leverage the best in technology people and processes. Without a unified collaborative approach the costs will be high and timelines long. Firms will quickly fall prey to cyber espionage and attacks if they continue to use the old identity and security models. Wall Street is continuously bombarded by cyber aggressors attempting to steal or disrupt merger plans personal financial data or even the technology that keeps the New York Stock Exchange Nasdaq and brokerage firms running. Credit unions and community banks are already offering a service and business model that is unmatched in larger banks. Imagine the possibilities of a member network that was ultrasecure. Why would anyone want to bank at a place that continually charged high fees was not secure or continually breached Credit unions could come together in an effective manner to create an ultra-secure truly members-only environment. This would provide the long-term risk mitigation required in today s environment while also creating a compelling member value truly differentiating it from vulnerable banks. If you don t keep your member safe--somebody else will. Jeff Carter is Chief Strategy Officer of EyeLockCorp. March 2013 Credit Union BUSInESS 11 UndEr THE HOOd Expand Your auto lending Vocabulary with autoIMS By Joe Miller holesale vehicle remarketing--a phrase that many credit union executives may not know--lies at the center of an 80 billion marketplace where lenders auction houses car dealers and others convene to buy and sell used vehicle inventory in the most efficient manner possible. AutoIMS a company that provides industry standard platforms to connect lenders with auctions and manage vehicle inventory also sits at the center of this marketplace AutoIMS was founded over fifteen years ago by auction industry executives who recognized that the Internet offered several incredible opportunities to improve upon expensive error-prone and paper-driven processes that then dominated the industry. An industry pioneer named Don Meadows known for his fair-but-tough perspective as a big seller at auc- W 12 tions agreed to build from the ground up a new software platform that would satisfy the needs of everyone in the auto auction industry. Meadows was well-known to industry insiders for many reasons but especially for his ability to fairly judge vehicle depreciation and residual values his knack for blending art and science in selling cars and for his mediation skills. The auction marketplace is about bringing different parties with disparate goals together amicably and Don s work at AutoIMS epitomized the industry s best qualities perfectly. He was an utter success. Today AutoIMS offers a robust set of tools that connect auctions with commercial consignors--such as credit union--who are often simply trying to maximize the value recovered on repossessions or out-of-fleet cars by selling those vehicles as quickly and for as much money as possible in a Credit Union BUSInESS March 2013 UndEr THE HOOd commercially reasonable and competitive environment. As the needs and strategies of over 1 200 institutional sellers and more than 500 auctions have evolved so have the software and service solutions of AutoIMS where neutrality is their key to serving as the connecting hub for so many different parties. The Rise of Auto Lending at Credit Unions Credit union growth continues to surge as they gain members and market share from bigger banks by offering more personal customer service and a wider range of products and services including auto loans. As with any loan product defaults are part of the cost of doing business and efficient collections and recovery practices go hand in hand with business success. An auto-lending portfolio provides a specific piece of recoverable collateral along with an entirely new set of administrative challenges for doing so. The Consumer Financial Protection Bureau (CFPB) and increasingly state-by-state legislation have made the auto repossession and recovery landscape difficult to navigate. Because of strict timelines about Notices of Intent to Sell and other consumer protection documentation it is important that default loan vehicles are dispatched in a commercially reasonable manner. While this means many things to many people the auto lending industry has unanimously agreed that auto auctions The Consumer Financial Protection Bureau (CFPB) and increasingly state-by-state legislation have made the auto repossession and recovery landscape difficult to navigate. provide as good a chance as any other marketplace for sellers to meet the commercially reasonable test. Competing at the Auctions Despite common myths no auto portfolio is too small to benefit from the auction marketplace. In a comparison of financial and process benchmarks from over six months of sales data between a group of small and large consignors AutoIMS found no material differences in the level of service or performance gained between the two groups. Although there were differences in the way credit unions and other smaller consignors approached the remarketing process all parties participating in the study agreed that finding a common communication platform on which to exchange data in a consistent March 2013 Credit Union BUSInESS 13 UndEr THE HOOd 4. After the Sale Report on results use built-in calculations to reconcile sales judge auction performance create financial and process benchmarks and make future decisions. Repo and auction data stay in the system forever and are easily searchable and reportable. 5. Electronic Data Interchange Avoid re-keying data altogether. Even with limited IT resources a credit union can set up automatic feeds of non-sensitive data between their host lending system and AutoIMS to drive even greater efficiencies throughout the auction remarketing process. large and small lenders have learned to put fax machines and FedEx aside now preferring to exchange vehicle inventory data online which is easy and secure. fashion was essential to reducing administrative burden and achieving high performance in the auto remarketing process. That platform is AutoIMS. Large and small lenders have learned to put fax machines and FedEx aside now preferring to exchange vehicle inventory data online which is easy and secure. Credit unions have been especially quick to embrace AutoIMS s flexible and easy-touse inventory management system in varying degrees depending on need. Using the tools provided CUs can easily manage and track inventory throughout the repossession and recovery lifecycle regardless of size. 1. Repossession AutoIMS includes a built-in repossession management module to assign and track repossessions. Simply enter vehicle inventory when convenient and assign to any repo agency or forwarder when ready. You can receive updates track performance and manage agent invoices online as well as manage repo vendors to ensure compliance performance and fee appropriateness. 2. Auction Assignment This allows you to update repo vehicle records by assigning to auction without re-keying any data and use the closest auction or auto-assign technology to ease the process. The auction function also acknowledges assignment automatically generates release forms and arranges and tracks transportation. 3. At the Auction Key dates and statuses are tracked and stored throughout the lifecycle of the vehicle along with title other documentation management. Vehicle condition is reported by auction including photos visible on You can make repair decisions using built-in valuation tools to set floor prices request run numbers and much more. 14 Credit Union BUSInESS The Relationship Business Used cars aren t the only things that AutoIMS has in common with credit unions. Building on a culture of relationships is what brought AutoIMS to its prominent position in the vehicle remarketing industry as AutoIMS literally and figuratively connects thousands of people every day enabling them to conduct business efficiently and productively. With high data standards and consistency at the heart of its successful inventory management platform well over 200 credit unions have been able to maintain and even extend their unique culture value proposition and preferred business processes using AutoIMS while saving time and money. While many credit unions use the full suite of AutoIMS managing a vehicle from repossession through remarketing some opt for a more simplified view of their inventory and establish indirect relationships through third party remarketers or local auctions. Regardless of how they connect AutoIMS refers to all of their clients as members and treats them with that level of exclusivity. Members can reach one of their Atlanta-based Customer Service professionals for assistance from 8 00am to 8 00pm ET every business day. A new era Even though it lost its visionary founder and CEO in December 2012 Don Meadows legacy ensures that AutoIMS will be around for the long haul. In addition to its long service as the industry standard partner for so many companies AutoIMS is well positioned to lead the charge toward new technologies like Internet selling and new predictive market analytics. March 2013 BENEFIT FOCUS We Specialize in Executive Benefits for Credit Unions In today s environment of ever-changing regulations your organization needs someone entirely dedicated to your industry. We understand your needs better than anyone and no one is better equipped to help you develop implement and administrate executive benefit plans that will attract and retain the most talented executives and directors. You can be confident knowing we have designed your plan to be compliant from the moment we put it in place and will work to make sure it remains compliant for its entire life. Let us show you how our focus will benefit your Credit Union. FROM OUR 888-494-8911 tquigley UndEr THE HOOd autoIMS sustains don s legacy by maintaining excellent relationships with CUdl and other associations attending trade shows like the California Credit Union Collectors Council and publishing articles such as this one. An important part of Meadows legacy was his passion for helping all types of companies with their remarketing efforts and he paid special attention to credit unions. AutoIMS sustains Don s legacy by maintaining excellent relationships with CUDL and other associations attending trade shows like the California Credit Union Collectors Council and publishing articles such as this one. These were all top priorities under Meadows and have continued to be priorities since his death because AutoIMS recognizes that some of its best member relationships and opportunities remain in the credit union industry. To learn more about AutoIMS visit call (888) 683-2272 or email customer.service Joe Miller is the Director of Customer Service for AutoIMS but refers to himself as the chief listening officer. Responsible with his team for ensuring every auction and consignor member derives the most value from AutoIMS and their own remarketing processes Miller most enjoys helping people by recognizing their needs and connecting them with the resources required for success. 16 Credit Union BUSInESS March 2013 CFO CUrrEnCY does it Make Sense to Use an Investment adviser T By Emily Hollis CFa Partner vestment adviser is that fees are not shown as expenses on your financial statements. A fee-based adviser charges a fee to help you select manage and monitor your investments. When you hire a fee-based investment adviser you are entitled under federal and state laws to full disclosure for all fees paid to the investment adviser. The dedicated fee-based investment adviser receives no compensation for trades that it executes on behalf of its clients. The adviser s profits are derived from the annual fee that clients pay not each individual transaction that is executed on behalf of its clients Fee-based investment advisers typically execute trades with large broker dealers (primary dealers that hold inventory) that will not directly transact business with most credit union clients mainly due to relatively low trading volume. Because fee-based investment advisers advise clients with an aggregate of investable assets of perhaps billions of dollars they are able to foster trading relationships with these primary broker dealers and eliminate the middle-man . Credit unions with limited trading volume typically have the option of maintaining direct vendor relationships with regional broker dealers. Most regional dealers must purchase bonds from the primary dealer and then mark the price of the bond even higher in order to make a profit on the security. The cost savings in executing trades with fee-based investment advisers can be phenomenal depending upon the strength of the adviser the security type market conditions and investment volume of the credit union. In addition to savings in execution a fee-based investment adviser is able to remain objective when analyzing and selecting securities that offer the greatest value to your institution s balance sheet rather than focusing on the profitability associated with choosing a particular investment simply to generate high he primary responsibility of any credit union official involved in investment activities is to ensure the safety of the balance sheet. Securities available in today s market are more complex than ever before and a multifaceted investment portfolio will demand more elaborate modeling and reporting to your Investment Committee and Board of Directors. The cost of managing this activity each year (salaries overhead software etc.) is very expensive and even for large credit unions the costs of performing this analysis in-house can be prohibitive. Simply put quality investment advisers have the systems and resources to perform high-level analytics and provide credit unions with expertise on portfolio strategizing and security selection which could greatly enhance the net yield on their investment portfolios and keep you from unintended consequences (i.e. extension risk). There are two steps in choosing an investment adviser for your credit union. The first step is to determine whether to use an adviser that is commission or fee-based the second step is to determine whether your funds will be managed on a discretionary or non-discretionary basis. Fee-based Versus Commission-based Advisers Commission-based investment advisers such as broker dealers are compensated for selling financial services or individual securities transactions. Broker dealers are paid on a transactional basis and their profits are derived from purchasing or creating a security at one price and selling it at a higher price (the bid ask spread). This is an important element to consider. Commissioncompensated sales representatives are not required to disclose the commission or the dollar amount of the commissions they are paid. Simply put the advantage of a commission-based in18 Credit Union BUSInESS March 2013 OUR MISSION IS TO. ENSURE DOING BUSINESS IS. EASY & PROFITABLE. WRITE YOUR. OWN PLAN FOR SUCCESS WITH NAC. As a nationally recognized administrator of top quality vehicle service agreements NAC is focused on providing the products credit unions need to create new fee income and expand membership. NAC s fully insured coverage plans provide YOUR MEMBERS with peace-of-mind protection against expensive vehicle repairs. Our powerful online technology provides YOU with a simple-to-use sales tool that automatically matches vehicles to eligible plans displays cost-effective options and generates a contract PDF instantly when finished FOR YOUR MEMBERS Great Benefits - Roadside Assistance Rental & More Superior Customer Service Fast Claims Processing FOR YOU Online & On-Site Training Fast Personal Support Easy Online Submissions Custom Marketing Materials Auto Powersport & RV NACSOLUTION.COM 800-664-5724 CFO CUrrEnCY commissions. They also have no incentive to move in and out of security positions for the sake of creating additional revenue. non-discretionary Versus Discretionary Accounts A discretionary account is one that allows a broker or Registered Investment Adviser (RIA) to buy and sell securities without the client s consent. With a non-discretionary account the investment professional is not authorized to buy or sell securities for your account without your prior approval. recommending securities to clients these brokers must clearly communicate whether they are acting as a fiduciary providing investment advice or selling a suitable security as a registered representative of the dealer they work for. FINRA examines brokers for regulatory compliance and is sanctioned by the SEC to discipline registered representatives and member firms that fail to comply with federal securities laws and FINRA s rules and regulations. Regulation of Fee-based Advisers Investment advisers that have more than 30 million under management must register with the SEC under the Investment Advisers Act of 1940. This Act defines investment adviser in part as any person who for compensation engages in the business of advising others either directly or through publications or writings as to the value of securities or as to the advisability of investing in purchasing or selling securities or who for compensation and as part of a regular business issues or promulgates analyses or reports concerning securities. The SEC is responsible to proactively prevent investor harm by working closely with agency examiners. When SEC examiners identify deficiencies in a firm s compliance program those deficiencies need to be corrected before they lead to other securities law violations that could harm investors. The SEC is responsible for disciplining investment advisers that essentially ignore SEC examination warnings. Regulation of Commission-based Advisers Brokers who receive a commission on sales are required to register with the Financial Industry Regulatory Authority Inc. or FINRA. FINRA is the successor to the National Association of Securities Dealers Inc. (NASD). It is a non-governmental organization that acts as a self-regulatory agency that regulates member brokerage firms and exchange markets. The Securities and Exchange Commission (SEC) is the government organization which acts as the ultimate regulator of the securities industry including FINRA. Commission-based brokers who also provide investment advice are required to affiliate with an RIA making them dually registered with FINRA and the SEC. As an RIA they are held to the Fiduciary Standard as defined under the Investment Advisers Act of 1940. When providing investment advice and 20 Credit Union BUSInESS March 2013 CFO CUrrEnCY Due diligence of a Fee-Based investment Adviser To find out about fee-based investment advisers and whether they are properly registered you would review their SEC registration form called a Form ADV. The Form ADV has two parts. Part 1 contains information about the adviser s business and whether the adviser has had problems with regulators or clients. Part 2 sets out the minimum requirements for a written disclosure statement commonly referred to as the brochure. Advisers must provide this statement to prospective clients initially and to existing clients annually. The brochure describes in a narrative format the adviser s business practices fees conflicts of interest and disciplinary information. Where applicable each brochure provided to clients must be accompanied by a brochure supplement that includes information about the specific individuals acting on behalf of the adviser who actually provide investment advice and interact with the client. An adviser must deliver the brochure supplement to the client before or at the time that the specific individual begins to provide investment advice to the client. You can view an adviser s most recent Form ADV online by visiting the Investment Adviser Public Disclosure (IAPD) website. You can also obtain copies of Form ADV for individual advisers and firms from the investment adviser your state securities regulator or the SEC depending on the size of the adviser. You ll find contact information for your state securities regulator on the website of the North American Securities Administrators Association Conclusion Of course I am partial to a fee-based adviser for that is the investment philosophy with which I passionately agree. Fee-based advisers are incentivised to focus on the long-term needs of clients and are compensated as long as the firm is doing a good job in assisting credit union management in managing the balance sheet making the firm a true partner to its clients. Emily Hollis CFA is a partner with ALM First Financial Advisors LLC. March 2013 Credit Union BUSInESS 21 lEadErSHIP Should They Team Up or lead lthough we live in a time of great workplace inclusion executives sometimes find themselves at a crossroads when deciding whether to collaborate with or lead their subordinates and women struggle with this issue the most. One of the perceptions among business experts is that women are more inclusive and team-oriented than men. Other reports say that men are socialized as team players by participating in competitive sports as young boys whereas women are more apt to be competitive with each other and are taught to most value their own beauty popularity and their ability to attract the best men. Some would say that women are rarely taught to work together to reach a common goal yet inclusion seems to be second nature in women. Even though men are steered towards team activities they don t seem to have any issues with foregoing team spirit when it comes to leading. Perhaps women are simply more people-oriented and therefore working in a team environment seems natural. When it comes to the workplace women are more socialized toward interdependence. A recent study of executive life by Fortune magazine found that increasingly executives were developing cooperative characteristics while women were still having trouble distinguishing between knowing when to collaborate and when to command. Women leaders By Dr. Sandra L. Torres A tinctly different though effective ways when compared to men. This is probably a result of the different strengths and styles that women bring to the workplace. Oftentimes men and women use different processes for decision making and leadership. Because women seem to be more relationship-oriented they tend to focus on building relationships before asking others to get things done. This relationship building can be effective as it tends to make subordinates feel more comfortable in taking direction but it can also be disadvantageous especially when tasks are not performed as expected and an employee needs to be reprimanded. A good relationship can rapidly go sour. Men tend to go straight to the task and build their relationships when they are in the task. Decision-making styles also differ between genders. When working in teams men tend to process information internally until they arrive at a solution while women appear to process information externally expressing options aloud which can be viewed as a sign of weakness in female leaders. When it comes Team-Oriented Characteristics Researchers us with data concept that manage their 22 have supplied that supports the women lead and businesses in disCredit Union BUSInESS March 2013 lEadErSHIP to nonverbal communication women and men seem to have a language all of their own. Woman will often nod to indicate that they are listening but to men nodding signals agreement. Men who remain still when a woman is speaking may appear to be bored which prompts the female speaker to repeat what she is saying or ask if he is listening which can lead to her being thought of as too talkative. Despite stereotypes to the contrary studies have shown that men talk more than women and interrupt and talk over women much more than women interrupt men. During meetings men take up more time and space while women leaders who team-up try to ensure there is more equality present. Men tend to be more hierarchical while women because they are more relationship oriented tend to lead by consensus. These factors can result in women not being viewed ed having enoughbring you success in employee motivation as as message will self-confidence to become leaders. well as in building a positive productive workplace. For many leaders Team Dynamics employee appreciation is part of their DNA increaseothers it canin leadership roles has generated inThe but for of women be a scarce commodity. in fact many organizations are offering leadership development training to terest in the understanding of team dynamics. Because women lEADErSHiP tend to have more nurturing natures team Take this Thanksensure that leaders develop skills in this area.dynamics are often more predictably supportive democratic decentralized evgiving season to make your workplace the exception and use and participative in to ery opportunity teams lead by women which can result in more productivity team demonstrate your satisfaction and creativity. Even Tuckman s Five-Stage Theory gratitude to your of Group Development sounds like a woman s blueprint for leading her family forming storming norming team. performing and adjourning Conversely men have behaviors that are speaker Author more active aggressive directive structured and task oriented which can and leadership impact team cohesiveness. So why is it challenging for Miconsultant women to shift from being a team member to being the team s Dr. ami-based leader The push for leaders to shift practices around the world. Torres has researched leadershipfrom a directive and structural style than 20 years of experience in the credit union indusMore to a participative style puts women at a disadvantage because made her an are already participative. Therefore any try has by nature theyardent believer and practitioner of the difference in behavior seems insignificant. Men however discredit union philosophy people helping people. Leadership play a more dramatic change expertise behave writings trainSi offers bilingual leadershipwhen they via her in a participative manner. They are seen to have pleasant side Her specialty is ing workshops and their character yet are still viewed as strong leaders. better by visiting found women s leadership. Get to know her Also studies have leadsufficient evidence to support women s inequality when leaders need to say thank you in a genuine manner. Your team members will likely work much harder if they feel that what they re doing really makes a difference and that their efforts are noticed by those with power. Dedicated to developing leadership across cultures. Leadership Programs Develop Talent and Achieve Results Studies show that on average leadership development programs have a 20-40% significant impact on the following Personal Ability--Communication - Collaboration--Teamwork Productivity--Quality and Cost of Work Consider how an investment into coaching mentoring or training initiatives will result as a positive ROI on your organization s income statement. Dr. Sandra L. Torres Leadership authority and founder of Leadership Si (see) offers bilingual leadership expertise via her writing training programs workshops and speaking engagements. Become an extraordinary leader November2013 March 2012 Develop great leadership skills. For more information contact her at drsandi 24 Union BUSInESS Credit 21 Credit Union BUSiNESS lEadErSHIP When working in teams men tend to process information internally until they arrive at a solution while women appear to process information externally expressing options aloud which can be viewed as a sign of weakness in female leaders. ing in a mixed gender environment. Women in male dominated careers face greater resistance when there is a male majority. Men increasingly want to keep the team domain for themselves. These are only a few of the subtle but powerful dynamics that can weaken a female leader s position. A Powerful Paradigm Lead and Team-up Women need to create a new paradigm of leadership power. As experts in multi-tasking they can both lead and team-up. Women leaders who understand the distinct way in which they can exert power need to make decisions predicated on sustainability of both their and the team s position. Leadership should leverage the power of a woman s innate characteristics for collective empowerment. Strengths such as conviction creativity and mentorship can make women strong leaders. Behaviors that set them apart from men such as collaboration and inclusiveness will allow them to team-up when necessary. Women s leadership can then be a force that can and must be harnessed for the team s good. Author speaker and leadership consultant Miami-based Dr. Torres has researched leadership practices around the world. More than 20 years of experience in the credit union industry has made her an ardent believer and practitioner of the credit union philosophy people helping people. Leadership Si offers bilingual leadership expertise via her writings training workshops and speaking engagements. Her specialty is women s leadership. Get to know her better by visiting March 2013 Credit Union BUSInESS 25 dEBIT MaTTErS Is it Time for a Chief Outsourcing Officer Payment Matters By Suzanne Savage R apidly changing technology growing product complexity and greater requirements for security and compliance have created product and service needs that many credit unions can no longer fill with in-house systems and staff. This growing need for product and operational function specialization has created many opportunities for third party providers to offer solutions to credit unions. With robust product and services available off-the-shelf CUs now offer members a sophisticated product set that rivals banking competitors. Internal operations are now managed in ways that require far less internal expertise. Credit unions constantly grapple with outsourcing decisions across all product lines including lending collections home banking core systems and payments. Many internal operations functions are also outsourced to third parties in the human resource IT and marketing departments. While traditionally viewed as a way to cut costs today outsourcing provides the primary way CUs acquire functionality or expertise not available in-house. Shifting to a highly outsourced environment changes the way credit unions make internal decisions and drives requirements for an updated management skill set. Internal decisionmaking is less focused on in-house versus outsource options and more focused on identifying which vendor products will best meet credit union needs. Skills heavily weighted towards vendor management are more useful in this environment than those more focused on operations and technology management. Does the shift in how CUs acquire and manage products mean that the time is right to consider hiring a Chief Outsourcing Officer Consider the shifting management responsibilities of line managers. 26 Credit Union BUSInESS Let s look at human resources as an example. Payroll processing and benefits administration are probably outsourced staffing needs are most often filled using an agency and workplace rule compliance and legal counsel are both provided by outside experts. The skills a human resource manager needs no longer includes a mastery of payroll tax changes or the ability to find qualified applicants for open positions. The human resource manager must be able to identify select and manage vendors to provide these services. A key measure of HR management performance lies in their ability to coordinate the delivery of vendor provided services to the organization. Sourcing vendor solutions to human resource department needs can be managed effectively from a single department. Other examples of single department sourcing include internal operations functions such as network management or PC support. However when it comes to member facing products and services product options are available in different functional areas of the credit union. For example credit unions can choose a merchant funded rewards program from the bill pay provider payment processor or stand-alone third party loyalty provider. At the same time bill pay debit card processing and marketing are managed in different areas of the credit union. Which department selects the merchant funded rewards provider How are the product and service needs of each department assessed against the available merchant funded rewards options To answer those questions consider why credit unions operate in an environment where seemingly disparate vendors offer similar products. Examining the underlying strategy and level of integration within the various vendor products can be useful in the decision making process. For example look at the product set expansion in payment processing vendors. Basic March 2013 dEBIT MaTTErS transaction processing ATM driving Payment Processor Product Expansion and card production formed the core of the original processor business model. Remote Analy2cs Mobile Competitive pressure and desire for Chargeback Deposits Call Center Management more income lead processors to provide additional services. Bill Pay Outsourced This trend is not unique to payment ATM processors the same expansion of serServices vices is evident in core systems lending Mobile Por olio Banking and CRM solutions as well as internal Management Loyalty Merchant Home operational functions. In the same way Funded Banking Rewards credit unions encourage members to Prepaid use more CU services vendors seek ATM Card Driving Produc2on greater product penetration in CUs. Credit unions desire a seamless integrated member experience and vendors member facing products and services. provide tightly integrated products to meet those needs. This environment drives the need for strategic thinking at In the resulting product landscape many third party serthe highest levels within the credit union about how the orgavice providers offer similar products from different strategic nization defines a product strategy and identifies how best to perspectives. Core system providers seek to expand capabilities achieve its goals. The primary role of a Chief Outsourcing Ofby leveraging integration points with the core system data. At the ficer is to translate the credit union s overall strategic objectives same time payment processor product expansion is tied to geninto a coherent product and service strategy. erating more transactions. Bill pay loyalty and CRM products The Chief Outsourcing Officer assists line managers in also seek to integrate a broader product set related to their priidentifying various product options from across credit union mary functionality. The following graphic demonstrates where service providers and facilitates decision-making about bestseveral product options are available from various vendors. fit solutions. For example when sourcing a merchant funded Not all vendors offer all products but you can see that credrewards program credit unions need to understand how a it unions have more options than ever in configuring a set of vendor s product strategies and integration points mesh with how the credit union wants to deliver the product. Some solutions are integrated into home banking history where members can redeem offers from within home banking. Other solutions require member enrollment in third party websites to receive e-mail alerts with merchant offers which can be redeemed simply by using the member s debit or credit card. There are also merchant funded rewards offered through mobile banking providers where GPS location based deals are delivered to member cell phones. The strategies for delivering rewards through each of the providers vary and are integrated at different member interaction points. Understanding the various market options combined with careful consideration about how this service should be delivered to your members drives decision making about best-fit solutions. March 2013 Credit Union BUSInESS 27 dEBIT MaTTErS The Chief Outsourcing Officer also provides some discipline when making in-house versus outsource decisions. Depending on the services needed the amount of customization required and cost outsourcing is not always the CU s best option. In one real life example a CEO experienced solid financial gains by outsourcing a number of credit union functions and determined that outsourcing credit card operations would be a good idea. Once the staff began to pursue his directive they found that their current vendor couldn t provide the level of integration needed while supporting all of the other transaction features the CU offered. They also discovered that the vendor solution costs would be significantly higher than if they simply used their current in-house solution. The credit union abandoned the project after several months but not before expending a great deal of resources trying to make it work. Greater diligence on the front end related to integrated functionality and financial analysis would have saved the credit union considerable time and money. Looking at marketing objectives reveals another example of how a Chief Outsourcing Officer can assist with product strategy. Often the marketing team is charged with growing the membership increasing the depth of member relationships with more products per member and generally driving the preferred financial institution status goals. There are many products that assist the marketing team in meeting these strategic objectives including analytics loyalty programs and custom campaigns at the ATM. Often the marketing staff does not have relationships with the core system or payment processing vendors who offer these products and may not be involved in evaluating how well these products meet strategic goals. Since marketing campaigns can be more effective when coupled with an expanded product set the Chief Outsourcing Officer looks across the organization and its vendors to identify product and service opportunities that fit the overall strategy. In the highly outsourced product and service model credit unions also need strong product integration skills. Whether or not you acquire products from a single vendor or multiple vendors a certain level of integration with other products is important in offering members a seamless experience across access channels. When a member makes a remote mobile deposit information about that deposit should be available via the home banking VRU and call center channels at the same time. The ability to integrate transactional data across channels in real28 Credit Union BUSInESS time contributes to a positive and consistent member experience. The Chief Outsourcing Officer can ensure that integration requirements are established and implemented as part of the product selection process. In this regard the Chief Outsourcing Officer promotes a high level of integration and strives to minimize product and service silos within the credit union. In addition to combining credit union strategy with vendor solutions credit unions need to acquire and build strong vendor management skills. While vendors like to sell complete turn-key solutions that don t require credit union involvement reality requires oversight where vendors are held accountable to service level agreements and other contractual obligations. No one cares about member service delivery more than the credit union so oversight responsibilities should not be abdicated to vendors. Credit unions can fall short in vendor management when outsourcing any number of member facing functions. I recall one particular example where a credit union outsourced call center services. Complaints about long hold times began trickling in several months after the conversion to a third party vendor. This prompted management to review vendor provided call reports each month. This data revealed that the call center provider was not meeting its response and abandon rate goals every Friday Saturday and payday. The vendor had not managed the delivery of service and the credit union had failed to manage the vendor. There is no such thing as turning a service over to a third party and turning out the lights. In outsourced solutions credit union responsibility for service delivery is not reduced it simply shifts from managing the service to managing the vendor. The Chief Outsourcing Officer can be charged with facilitating a vendor management culture and implementing regular service metric reporting across the organization. This means supplementing the commonly reported metrics relating to assets loans and transaction volumes. These metrics adequately measure growth and financial performance but do little to inform CUs about how well they are meeting member needs. It is easy to report on volumes and dollar values but our members value ATM up-time how quickly we answer calls the availability of home banking and bill pay systems and timely problem resolution. These metrics measure how well the credit union and its vendors are meeting service goals. A strong vendor management discipline coupled with service metric reporting supports strategic goals across the organization. March 2013 dEBIT MaTTErS So is it time for a Chief Outsourcing Officer Perhaps. Whether or not the vendor identification selection and management duties are managed under an outsourcing officer or by senior staff members it is important to recognize that credit unions have made a shift in how products and services are managed from in-house solutions to an outsourced environment. This new environment requires more careful consideration of product delivery strategy combined with greater collaboration among departments and tighter vendor management skills. Suzanne Savage founded the Savage Consulting Group (www. in 2001 after holding a number of management positions in various financial institutions networks and consulting firms. Savage Consulting Group provides credit unions a wide range of consulting and project management services with a primary focus on the card programs. Savage specializes in strategic development business planning and operations market research and the evaluation of payment systems products services and technologies. She holds a master s degree from the California State University at Fullerton and a bachelor s in Business Economics from the University of California at Santa Barbara. Suzanne is also a certified Project Management Professional (PMP). CEO SubSCrIPTIOn WItH BENEfItS Benefit your CFO COO CMO CCO CLO CIO HRD With fREE Monthly E-Newsletters SubscribeNOW March 2013 Credit Union BUSInESS 29 CU COnTEnT Can Members HEAR Your Brand hat comes to mind when you think of your credit union s brand Chances are you think of its visual elements such as your logo colors design etc. But have you considered what your credit union sounds like What do members hear when they interact with your credit union When Michelle McGovern Stewart Chief Marketing Officer for Firefighters Community Credit Union in Ohio joined the credit union almost two years ago the company was communicating to the market in several different ways through several different channels and working with several different marketing vendors to execute their efforts. In her words There was a lot of noise but no consistent message. As with many CUs Firefighters Community Credit Union with few internal resources to draw on had outsourced a number of marketing creative functions. But spreading the work among a variety of vendors created widespread inconsistencies. Stewart immediately set out to pare down the number of different communication channels by assigning most of the outsourced marketing work to a single vendor. She thought that minimizing channels and louder than noise By Laura Enock W Michelle McGovern Stewart Chief Marketing Officer Firefighters Community Credit Union message contributors would help minimize the inconsistency it didn t. She soon realized that the CU s inconsistent messaging wasn t caused by having multiple channels and vendors but stemmed from the fact that the credit union had never defined described or documented a consistent marketing vocabulary that all of their message contributors could follow in the first place. Most credit unions tackle their logo tagline and visual representation but not their voice Stewart says. We found it absolutely necessary to document what our credit union sounds like. That was the only way we could nail down message consistency no matter who helped us execute it. With no documented voice anyone in a marketing capacity--both inside and outside of the credit union--naturally relied on his own voice. Stewart describes voice as all of the elements that go into creating a message vocabulary energy playfulness (or lack thereof) attitude perspective formality etc. Because everyone contributing to the credit union s marketing message would inject his or her own personality the message remained muddled. Even though the credit union had assigned a single vendor to prepare most of their outsourced marketing materials that vendor brought their own personality and perception of what the credit union should sound like to the creative table and delivered a voice different than the one the credit union wanted to hear. Rolling up her marketing sleeves Stewart set out to do some branding research. She quickly discovered that most of the branding experts she spoke with asked the same externally focused questions What does the market think What does the market need What does the market want us to be And how can we shape ourselves to accommodate their thinking fulfill 30 Credit Union BUSInESS March 2013 CU COnTEnT their needs and become what they want Stewart felt that line of approach wasn t quite right. If we just looked at what the external market wanted and shaped ourselves accordingly we would never be authentic and our message would lack credibility Stewart says. We d be that person who acts and behaves the way they think everyone around them wants them to. There s a falseness about it that just doesn t resonate with anyone. Stewart took her credit union s marketing in the exact opposite direction. We decided to look at who we were as a company. What makes us more engaging Who are we really as a collective personality I thought that if we could define that collective voice of the company we could share it with the market place and invite those who are genuinely attracted to it to come do business with us. While this approach made sense to me it s the opposite of what is usually done. Questioning conventional wisdom however was only part of the process. The actual unique voice of the credit union still had to be identified and documented. According to Stewart everyone needs to define his or her own voice. To help with the research needed to determine the company s voice Stewart worked with John Crilly at the Brand Innovation Group (BIG) out of Ft. Wayne Indiana ( I found their branding approach compatible with what I thought would be most telling Find out who the company is inside its walls and communicate that effectively says Stewart. The Project The project involved conducting mass market member and employee research. While most branding projects focus most of their time and attention on the mass-market element member and employee research were the more important and revealing elements in FCCU s case. Stewart went so far as to request that internal stakeholder answers be recorded not just written. I wanted to hear the energy underlying the words. If you just capture the words you miss half the story. The credit union then asked their members questions to determine what their members thought of them where gaps in perception exist and why current members do business with the credit union. Equally important the credit union asked staff members why they love their jobs (and they do) and how they view their work. The questionnaires revealed that in addition to their good rates members do business with the credit union because of the warmth and friendliness of the staff. Internally loan officers didn t see themselves only as processors of loan applications but felt that genuinely enjoying helping people was an important part of their job. Both findings form an ideal combination of forces that every credit union strives for and if that s what your CU is like it should be reflected in all of your marketing communications. Once we completed our internal research and really focused on capturing the personality of the people working within the company we found that we re very informal and anti-institutional. We have fun with our members even with the hurdles we have to deal with as a credit union--long rate disclosures lots of paperwork the fact that it s not easy to switch banks or change your checking account etc. Being a financial institution comes with a great deal of red tape. While we know we have to do these things we can laugh about it too. Stewart sums up the process with these words In the end though the most important part of this project was not the questions we asked or even the answers we got. The most important part was listening to how people answered the questions inflection energy vocabulary formality (or lack thereof) laughter (or lack thereof) motivation sentiment etc. That s actually why I recorded our teammate interviews. I heard more through the way they spoke than through the words they used. In my mind if I were searching for the personality of the company I d have Credit Union BUSInESS 31 March 2013 CU COnTEnT Stewart is quick to point out that the voice of her credit union isn t the voice of every credit union. There s a unified voice in every company she says. You just have to dig deep to find it. Maybe everyone won t like it but there s always a unified voice. And until it is documented your credit union probably isn t asserting it. If our voice were a little edgy for example we wouldn t choose to assert our message through conservative news media or mainstream radio stations. Instead the credit union would use less formal ways to convey their marketing messages like radio stations with edgier formats fringe media and grassroots events. It s been a lot easier to find compatible marketing channels since we ve found our voice Stewart says. In truth we use many different mediums. But now we don t change our voice to suit each one of them. We are who we are regardless of the channel we re talking through. The credit union also uses their documented voice to educate marketing vendors which helps those vendors better see hear and understand the credit union s personality. The end result is that our vendors can focus more on executing our voice in a meaningful way instead of feeling pressured to reinvent our voice depending on the campaign of the moment says Stewart. It was simply a matter of the credit union taking the time to explain what they wanted to sound like in a way that venders could hear. Ultimately that led Stewart to partner with a vendor whose voice was compatible with FCCU s. Beyond marketing FCCU s defined voice has begun to inform hiring practices. For example social media plays a big role in the credit union s communications and they recently hired a dedicated Digital Marketing Specialist Brooke Bates to manage it. When we were interviewing for our DMS we were able to listen for a candidate whose voice was compatible with the credit union s Stewart says. Once we heard Brooke talk we knew she would be a perfect match because we had that definition of what our voice sounds like. This vocal compatibility allowed her to assume the responsibilities of her position more rapidly and allowed me to quickly feel more comfortable trusting her to communicate our company s voice in digital spaces. As to the existing credit union employees morale was already high and an atmosphere of warmth and friendship already existed. What didn t exist was a shared engagement with marketing. In the past the company s marketing efforts were so scattered that employees couldn t really pay much attention to any of L to really be looking for the personality (that yummy emotional and attitudinal stew under the words) of the people who work within it. For me that s where the branding magic happens. aughing at themselves is something unique to Firefighters Community CU. The research said that we re friendly everyone says they re friendly. What does being friendly mean in the way we conduct business What does being friendly mean in the way our employees treat our members We ve defined it for our credit union. We laugh. We re playful and respectfully irreverent. We re responsible in our business practices but exercise a great deal of grace to make sure those business practices don t cause undue inconvenience to our members. Firefighters Community CU discovered that the warmth inherent in their credit union extends well beyond the financial services they provide. It s not unusual for members to bring freshly baked cookies into the credit union or to send employees tropical fruit from a winter vacation spot. All these factors helped Stewart distill the credit union s voice. Once distilled Stewart drafted a definition of what the CU s voice sounds like and that definition now drives the all of the credit unions marketing and communication decisions including choosing both their vendors and the channels they speak through. Having a clear recognizable voice immediately helped direct everything with no member backlash. While there is a certain lack of formality at FCCU the credit union never forgets that at the end of the day they re stewards of people s money. That s a responsibility they take very seriously. 32 Credit Union BUSInESS March 2013 CU COnTEnT it. However now when Stewart rolls out a campaign to her teammates she can share how the marketing campaign aligns with the way employees treat members. Her teammates are happily on board because that alignment exists. Now they help support Stewart s campaigns troubleshoot hurdles and share successes all because the voice is theirs. For every company marketing is a way of communicating on behalf of every employee in the company. If you can tell them how they fit in how this is their own voice talking they ll more readily buy into it and support you for it says Stewart. That s not to say that Firefighters Community Credit Union s employees are actively involved in planning and implementing every marketing campaign. But they re in on it. They know what s going to be rolled out and why. In every sense the credit union s marketing speaks on their behalf. Defining your voice may sound unnecessary in business Stewart says. All I can say is that it has clarified so much for us and has allowed us to more effectively communicate our message that I not only consider it necessary but also elemental to our success. Maybe because as fun and anti-institutional as Firefighters Community CU is they don t cross the line into unprofessionalism. If your credit union is going through any branding exercise Stewart cautions you to be wary of vendors who focus exclusively on external perceptions. While there is a great deal of value in understanding how the external market perceives your company her advice is that your primary focus should be on the exact opposite. Finding the credit union s voice--indeed understanding just how important is to find that voice--has been a journey. Stewart set out on that journey without knowing where it would lead. I didn t have all this methodology in my head when we started she says. We recognized that there was some incongruity in our messaging. While we knew it was there we didn t know why. I sat in meeting after meeting with vendors telling us to just learn what the market wants and be that. Some inner voice kept telling me no don t do that and I listened. differently if she had to do it all over again. She does acknowledge feeling somewhat out of control while going through the process. As a marketing leader you want to come in assess the situation and make things happen right away. There s ego involved. But in order to make a real difference I had to learn to put all of that aside. It took four months of research and discovery and another three months of study before she was able to really define the CU s voice and begin asserting it. Of course Stewart didn t put a hold on marketing during that process. She continued to scrutinize all their marketing efforts even as the entire marketing department underwent reorganization all of which felt a bit coincidental to Stewart at the time. However the end result produced both a clarified voice and an articulated unified marketing strategy and infrastructure. Although it involved a considerable amount time hard work and resources Stewart feels that the clarity they achieved was more than worth the effort. While it s too early to measure the bottom-line impact of having a defined voice anecdotal evidence has already started pouring in. Everything from vender management campaign construction channel selection and hiring has become easier and seems to be more effective. Who would think something as basic as asking ourselves who we are could be so clarifying for business practices Stewart asks. Yet it has been and Stewart encourages all credit unions regardless of size to ask some of the questions her credit union has asked of itself. Want to know more about Michelle McGovern Stewart s groundbreaking work Contact Ellen Crupi at ecrupi for a webinar recording of a live case study featuring Stewart. Laura Enock Managing Editor of Credit Union Toolbox and founder of provides credit unions nationwide with content for their websites newsletters email marketing and social media communications. Enock moderates the popular CreditUnionToolbox webinars on best practices and provides individual credit unions with social media marketing and PR support on a consulting basis. Contact her at laura or follow her on Twitter CUtoolbox. Results While Stewart embarked on this journey without knowing where it was leading she s now emphatic that she wouldn t do anything March 2013 Credit Union BUSInESS 33 MarkETIng MaTTErS CrM lead generation & referral Tracking for Every Credit Union T By tony Rizzo sales. This kind of tracking can justify the money you invest in marketing and frankly will improve the return on all the dollars you spend upwards of 5 times The sales team desires more and better leads and using real knowledge and cooperation marketing can deliver. Are you bungling sales opportunities by the thousands with nobody in management being the wiser Does your front line staff only share their successes not their misses You spend a boatload of cash to generate traffic and to hopefully solve real financial problems for your members. Yet too often your front line staff is ill equipped and unable to track sales leads. This is a problem for 97% of all financial institutions. he goal of every sales organization is to drive more revenue. In addition to sales-calling activity your sales team relies heavily on marketing to generate a meaningful brand and target lead-generating marketing campaigns and events. Yet while financial institutions spend hundreds of thousands of dollars on marketing every year most of it goes unmeasured. Does anyone out there believe these dollars should be tracked To maximize sales opportunities marketing in today s financial environment requires each dollar to be accounted for and measured against a tangible result. But who does this How can it be done You should no longer accept marketing as a cost center. Today s marketing is an investment and must drive sales. What does marketing have to do with sales Everything and nothing. Everything if you see marketing as the source for the majority of sales leads and everything if you embrace the reality that your revenue machine works best when sales and marketing unite. Marketing means nothing to sales when it seems to go off on tangents that are incompatible with sales needs. This is the reason why marketing is perceived as a cost center to so many in sales. There are a number of philosophies employed to measure the effectiveness of marketing and sales yet there is only one that will effect all areas of the revenue engine in a way the majority of philosophies miss Lead Generation & Referral Tracking. Why is tracking leads and automating referrals the right solution Because only this subset of CRM can affordably supply and verify the success of each marketing element you implement--radio TV newspaper direct mail PR and so forth--and the resulting 34 Credit Union BUSInESS shouldn t Marketing and sales be on the same Team The sales staff would like nothing better than to sit at their desks each morning and find their phones ringing off the hook with members and prospects on the line wanting to buy more products. Marketing would like nothing better than for every lead they generate to be identified tracked followed-up and measured within a proven sales process. By working together sales and marketing can each get what they want while achieving success and recognition in the bargain. By working together sales will receive better more qualified leads and find themselves on an easier path to reaching sales revenue goals. What does marketing get They get a built-in ROI machine. With lead generation and referral tracking sales provide marketing the feedback that validates marketing s March 2013 MarkETIng MaTTErS fectiveness. And let s not forget this result should occur without sales or marketing having to work any harder. Many marketers track the end results of marketing campaigns and yes tracking sales that result from your efforts is good but shouldn t lead generation be more important to you Let s say you send out 1 000 pieces of targeted direct mail. You may expect--and get--eight sales and your ROI may even be worthwhile. Yet how many of the 1 000 names you mailed out to called came into a branch or went to your website to learn more For argument s sake let s say it was 50. Why did only 8 out of 50 responders actually buy It may be because while marketing is leading many to look sales aren t closing deals. Your head of sales needs and wants this information just as much as you do. Once you have the information the two of you will need to work out how to get better sales from the leads you generate. If you track the leads your sales will increase and make your ROI look even better. How do you Manage Leads Referrals What happens when one of your members raises his or her hand to ask a question about buying one of your products Are their queries tracked as leads Shouldn t a good sales manager want to know Identifying leads generated versus leads closed offers a natural coaching moment for those reps having conversion issues. If a member s lead requests a product that is sold in a different line of the business how is it referred over How quickly is it followed up Is getting back to members promptly a sales task or just plain good member service If you called a car dealer about a new model and they said they would have someone get back to you how much time would want to wait before they got back to you a week a day an hour or minutes How does your institution compare We commonly joke about car salesmen--but seriously if you have a question about one of their cars they will respond almost immediately. Laugh all you want about car salesmen types but they are on top of every lead like stain to a fence. Think about it how 00000000 It s nice to pay less. Refinance your auto loan and save up to 200 on your payment. Dear Carson Could you use an extra 200 in your budget each month It s easier than you think. Smart Financial Credit Union has pre-approved you to refinance your auto loan and if we can t save you money we ll give you 100 You re pre-approved for a rate as low as 3% APR. With our low rates and terms up to 72 months you can have a brand new payment quickly and easily. The minimum loan amount is just 5 000. Why pay more than you need to Refinancing your auto loan is a smart move. There are no refinancing fees so your savings will start right away Just say Yes We re ready to handle all the details. Call us at 800.392.5084 (select option 2) or visit the secure personalized website below to take advantage of this offer. Questions Just call or stop by any branch. Double your loan volume by communicating with members who have loans at other financials. Our proven strategy will add loans to your portfolio today. ri-bureaureviewofmembers T loansoutsideofyourCU. orldclassdirectmaildesign W andproduction. 30 000 PLUS Pre-approved for 455 PLUS Monthly payment as low as 200 OR Monthly savings up to 100 800.555.5084 (select option 2) Savings guarantee You can choose to stop receiving prescreened offers of credit from this and other companies by calling toll-free 1-888-567-8688. See PRESCREEN & OPT-OUT NOTICE below for more information about prescreened offers. NOTICE SEE REVERSE SIDE FOR TERMS & CONDITIONS OF THIS PRE-QUALIFIED OFFER. Letter Template Tony Rizzo at 214.778.3037 tonyr MARQ73-05-11-06202011 CU Ad March 2013 Credit Union BUSInESS 35 MarkETIng MaTTErS long will you wait to get a call back if you re really interested in a product If it is a car you re after there are other dealers. Of course there are other banks and credit unions too. Can lead and referral tracking be the place where your institution embraces CRM Absolutely. It is far easier to implement than you might think. Old perceptions don t fit today s reality and it is a snap to get your folks using it. Managing leads and referrals will help you track results of marketing efforts perhaps for the first time. And the most important reason might be because today these tools are affordable and the ROI you ll realize once you have one will be easily and uniquely measurable. Also using technology to automate your referrals simply replaces a process that you already have and will actually help your staff do what they are already asked to do. With CRM they will be able to do it much more efficiently. How does your staff report or acknowledge sales from leads referrals Does a part of your lead and referral process include communicating back to your internal referral source and marketing what motivated their customers to buy Is the person responsible for accounting the incentives (HR ) also in that communication loop Is management clued into the results How is management informed of leads and then sales Does management see the pipeline of sales revenue and or the source of this potential business Can management see who is diligently sending leads referrals and who is not Can management evaluate who is converting internal referrals received at a high level and who isn t What is your lead referral incentive plan Do you pay per referral or per closed referral Do you pay for every referral over the average number produced by that branch per week month or per quarter The more sophisticated the plan the more you need automation s efficiency although simplicity is often best. What is the process whereby you pay out these referral-based incentives How often do you pay them Does anyone check to confirm that your payouts are accurate How much time does it take to assemble the numbers and dollars and confirm the results before paying the incentives Who does this work Are calculations made manually Are you sharing accurate client information Does your front line staff know anything about the clients they are talking to either on the phone or in person and if so do they know how to use this information to better serve the client How do you share this information today...or do you Don t get sucked into doing more than the CRM basics until you are ready. CRM can absolutely provide a great deal more horsepower to a sales-driven organization than just lead referral tracking. And candidly it is cool Unfortunately most credit unions aren t ready for full contact CRM. You must resist the temptation to expand your CRM dreams and go all out until you Looking to embrace CRM Here is a list of tough questions that should get your team talking about the sales and marketing problems you need to solve. Make sure everyone fully understands each perspective of a respective problem. Use them to see if you can highlight how bad processes create real problems down the line. CRM improves efficiency but discussing the problems gets everyone working to solve the same objectives. How is marketing helping sales drive revenue Are marketing s goals aligned with sales Do both have their eye on the strategic plan How much would sales increase from working together more tactically How do you manage CRM today Are you capturing leads currently What is your internal referral process How much effort is manual Is this process different within different business units at your institution How long does it take for you to respond to a client who is interested in something else Does this vary by branch line of business or officer How is your staff tracking leads referrals in progress Once an internal referral has been sent can anyone (or everyone) track where it is in the sales process Are updates or status reports provided that share the latest news on each referral with everyone If so who pulls that report together and how much time does it take 36 Credit Union BUSInESS March 2013 MarkETIng MaTTErS can clearly articulate your goals and objectives and know how you will measures the results of implementation for broad based CRM. Some would say until you master the basics don t spend too much. There are some credit unions that are trying to eat the whole CRM enchilada in one bite. And some of them are ready. Yet a common cause of failure with CRM is often the result of an organization trying to do too much too soon. Give yourself permission to ease into the CRM waters with a simple solution which can prove ROI quickly and which improves a process that you already have established. Lead Referral tracking is it CRM for the rest of us Yes. Isn t it time that your marketing team was able to validate and verify all of the results they deliver from the investments they make Yes again. More importantly isn t it time for marketing and sales to align for obvious mutual benefit Of course. This is truly CRM for every credit union. Tony Rizzo is the general manager and creative director of MARQUIS Software Solutions. MARQUIS is the largest provider of MCIF CRM solutions to credit unions worldwide with a long-standing reputation for excellence. Change With History or be Changed by it. There is no question that we live in an age where members expect a unique experience. How can your team make magic without the immediacy of accurate member intelligence and real time knowledge of leads and referrals Remember you expect to get immediate help whenever you call a business to learn more about their products right You re instantly put off when you don t get the timely response you expect. Be honest. If your team can t provide immediate answers and responses to your members they re likely to get annoyed with you too. Responding days later to leads provided today won t get you the business you re looking for. In fact recent studies now indicate that you have somewhere between five and thirty minutes to connect and close the deal. March 2013 Credit Union BUSInESS 37 vISIt the MArketPLAce PAge At www.cubuSIneSS.coM Marketplace Card Processing Payment Solutions Branch Services Coin Counters Coin Counters Branches still matter Bancography builds branching strategies Branch site analysis Current branch performance Branch network optimization Branch profitability Staffing review Sales goals branch info 205.252.6671 for AdvertISIng InforMAtIon Call GreG Halpern 561-282-6015 4 GreG Cubusiness.Com Marketplace Currency Coin Handling What Does Automating Your Currency Handling Needs and Providing Self Service Coin Redemption do for Your Branch It Gives Your Tellers Tools for Success Increases Branch Teller Increases Cross Selling Efficiency Opportunities Helps to Meet Member Strengthens Member Expectations Retention Reduces Costs Adding to your Bottom Line What Does it Take to Learn a Little More Not a Lot... Just ask your Magner Representative Phone 800-243-2624 Email solutions Online Let s talk about doing things the right way... Self-Service Coin Centers Currency Dispensers Currency Recyclers Proven Performance and Quality Facilities & Design Lending A Nationwide Lender with the Expertise to Get Your Deal Closed Business Partners is a nationwide provider of commercial real estate lending services with years of experience funding loans. We provide financing for most property types in primary and secondary markets Loan amounts of 500K to 20MM Competitive rates Terms of 3 5 7 or 10 years 25 year amortization Up to 75% LTV of appraised value or purchase price of the loan amount Loan fees 1% Atlanta GA - Los Angeles CA - Chicago IL - Dallas TX - Denver CO - Stamford CT CU SPOTlITE Ag credit Supports rural growth T By Sharon Sweda tor Craig Coughlin. Noted caveats are that the borrower must not exceed capped-income requirements and that the property meets their geographical restrictions. Much like their credit union counterparts Ag Credit delivers big on service. Many new mortgage loans can be closed within 30 days. They also offer a unique construction loan product that includes a rate lock throughout the entire construction period. In a climate where traditional lenders in many counties of financially hard-hit Ohio continue to discourage construction lending Ag Credit is earning praise and popularity for their flexibility and terms. At Ag Credit the portfolio loans offer greater latitude as well Coughlin adds. We offer a no-PMI conventional loan for borrowers with as little as 15% down both on home and building lot purchases. Most lenders require hefty down payments even if they offer financing for vacant land. The benefits of member-ownership do not end with expanded access to financing or better mortgage products. Portfolio borrowers often have the option to re-cast mortgages for a nominal flat fee thereby avoiding the high cost associated with re-financing all while keeping the mortgage in place and without re-starting the term. Many of Ag Credit s borrowers have utilized this feature to take advantage of rate declines. Our members appreciate this convenience and most take advantage of the rate reduction opportunity that borrowers cannot access from traditional lenders Coughlin affirmed. Still no co-operative would be complete without dividends or profit sharing. Aside from all of the aforementioned benefits many Ag Credit programs feature bi-annual distribution of Patronage Refunds. Over the past ten years they have returned over 20% in each of those years--one of the best benefits of all Sharon Sweda is a freelance writer who has worked in the real estate and finance industries for the past 28 years. Contact Sharon at SharonSweda to SpotLite your CU. he financial service environment is no mystery by any measure. Banking borrowing and savings needs are met by full-service banks and credit unions nationwide. Yet in the world of lending the field broadens slightly expanding consumer options. Mortgage brokerages join the group as do the little-recognized cousin to the credit union family--the credit association. Credit associations are similar in structure to traditional credit unions with the exception of transacting deposits and offering checking or savings products. Credit associations are member-owned but exist with the primary purpose of extending credit. At Ag Credit with more than a dozen offices located throughout the rural areas of Ohio they are serving the needs of borrowers who typically have fewer borrowing options and whose income is often derived exclusively from farming or other agricultural activities. Folks who are knowledgeable about mortgages business lines of credit and collateral loans understand the challenge facing farmers. In addition to the obvious challenges of climate and seasonal disparity there are the high costs of equipment and structures. Investments in pole barns silos and farm equipment often exceed the value of a typical farmer s home. Add the cost of land and capital becomes one of the greatest obstacles in the lending equation. Ironically farming is one of Ohio s largest industries and Ag Credit understands it. The cooperative which is owned by its members through shares of stock participation finances everything from land and equipment to building lots rural property and homes for both farmers and non-farmers. Ag Credit is one of Ohio s best-kept secrets. They have a broad platform that includes both portfolio and secondary market loans. Borrowers have the option of conventional FHA VA or USDA products. Ag Credit keeps a high percentage of their mortgages within their portfolio and any loan that is not transferred is serviced by Ag Credit as well. One loan product that is gaining popularity at Ag Credit is the USDA loan. It s popularity is due in part to a borrower s ability to finance without a down payment explains Loan Origina- 40 Credit Union BUSInESS March 2013