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T H E ON LY A LL-DIGITA L A LL-B USINESS R ESOUR CE FOR CR ED IT UNIONS THE RISK MANAGEMENT ISSUE NOVEMBER 2016 VOLUME 11 ISSUE 11 MORTGAGE LENDING Thinking for the Future Tandy Vincent Director of Marketing CU Realty Services How Credit Unions Can Create a Strong Mortgage Pipeline in the Midst of Today s Hot Refi Market TANDY VINCENT RISK MANAGEMENT Put Your Risk Management Services on Auto Pilot JASON O BRIEN PAYMENTS Top 10 Communication Strategies Behind Every Successful Card Program BILL PRICHARD Empower Your Credit Union with Enhanced Member Service Empowered C-Level Employees and Create Miracles In Your Community 500 PER YEAR WITH A 20% INTRODUCT ORY DISCOUNT Don t let this valuable offer pass you by. Jump on the CU BUSINESS Express to help your credit union GROW for your members employees and community. 1. Each member gets CU Business monthly eMagazines. 2. Individual articles are emailed to each member by job title. 3. Bonus New members also receive last 12 articles CFO Currency Lending Solutions Marketing Matters Branch BUSINESS etc...) 4. Each member has full access to CUB website and its 65 issue library. Sign Up Your Entire Crew for Team Builder Click Here To Register Your Crew A U G U S T 2 0THE 6 1 ONLY ALL-DIGITAL ALL-BUSINESSSRESOURCE FOR .CREDIT M C U B U I N E S S C O UNIONS Fill In The Blanks & Prosper CU Name Date Teambuilder Subscription Form 2107 TEAM BUILDER SUBSCRIPTION FORM How many team members This many and more ECUB MONTHLY CEO VELOCITY CFO CURRENCY CU TRAININGS CUB WEBSITE TECHNICALLY SPEAKING COMPLIANCE UPDATE LENDING SOLUTIONS MARKETING MATTERS BRANCH BUSINESS Name Title E-mail ID MEMBER BUSINESS LENDING C R E D I T U N I O N B U S I N E S S A U G U S T 2 0 1 6 C U B U S I N E S S . C O M ABOUT US THE ONLY ALL-DIGITAL ALL-BUSINESS RESOURCE FOR CREDIT UNIONS PUBLISHING TEAM Tim O Hara Editor & Publisher tim Ashok Kumar Associate Publisher ashok Patti Manzone Designer UP FRONT Tim O Hara BRANCH BUSINESS Chad Davis COMPLIANCE UPDATE Brian Godwin and Jason Harpenau MEMBER BUSINESS LENDING Corinne Kalsky PAYMENTS Bill Prichard RISK MANAGEMENT Jason O Brien CEO VELOCITY Scott McClymonds CFO CURRENCY Brittany Rollek BRANCH BUSINESS Kelly Durcan LEADERSHIP Chris Howard DIGITAL TRANSACTIONS Chuck Klein MORTGAGE LENDING Tandy Vincent CU WEB OPS MaryAbigail Dills THE O NLY A LL- DIG ITA L A LL- BU SINESS RESO U RCE F O R CREDIT U NIO NS THE RISK MANAGEMENT ISSUE NOVEMBER 2016 VOLUME 11 ISSUE 11 MORTGAGE LENDING Thinking for the Future Tandy Vincent Director of Marketing CU Realty Services How Credit Unions Can Create a Strong Mortgage Pipeline in the Midst of Today s Hot Refi Market TANDY VINCENT RISK MANAGEMENT Put Your Risk Management Services on Auto Pilot JASON O BRIEN PAYMENTS Top 10 Communication Strategies Behind Every Successful Card Program BILL PRICHARD SUBSCRIPTIONS Credit Union BUSINESS is published monthly (12 issues per year) by CU Business Magazine Inc. A one-year Digital membership is 75 yr An online membership form is available at subscription. TEAMBUILDER https the-teambuilder SALES AND ADVERTISING Tim O Hara Publisher tim or 561-282-6015 1 CONTACT INFORMATION Credit Union BUSINESS Magazine P.O. Box 2223 Palm Beach FL 33480 (561) 282-6015 (561) 588-7711 (fax) tim 4 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M TABLE OF CONTENTS NOVEMBER 2016 VOLUME 11 ISSUE 11 TAB THE ONLY ALL-DIGITAL ALL-BUSINESS RESOURCE FOR CREDIT UNIONS 6 8 12 15 19 21 25 29 UP FRONT Audience Through the Roof & Ad Rates in the Cellar Tim O Hara BRANCH BUSINESS 32 34 37 40 CFO CURRENCY The Twisted Yield Curve Scenario A Building Block to Better Balance Sheet Management Brittany Rollek LEADERSHIP Practical Banking Applications for Big Data in 2017 Chad Davis COMPLIANCE UPDATE Leadership Team Development CUs that Learn Together Maximize Their Successes Chris Howard DIGITAL TRANSACTIONS Compliance Talent Gap Challenges Credit Unions Brian Godwin and Jason Harpenau MEMBER BUSINESS LENDING Creating Loyal Passionate Member Relationships the Right Way Corinne Kalsky PAYMENTS The eTA on Driving Growth Defining eTransaction Automation Chuck Klein MORTGAGE LENDING Thinking for the Future How Credit Unions Can Create a Strong Mortgage Pipeline in the Midst of Today s Hot Refi Market Tandy Vincent Top 10 Communication Strategies Behind Every Successful Card Program Bill Prichard RISK MANAGEMENT Put Your Risk Management Services on AutoPilot Jason O Brien CEO VELOCITY 45 CU WEB OPS Selecting a Digital Project Vendor MaryAbigail Dills Putting Core Values to Work Scott McClymonds BRANCH BUSINESS NEFCU s Utilization of Technology Transforms the Corner Branch Kelly Durcan The Local Branch Is Dead. Long Live the Branch 5 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M UP FRO NT BY TIM O HARA I Audience Through the Roof & Ad Rates in the Cellar subscribers in the low-cost group subscription we call the Team Builder which allows each department within the credit union to have specific columns delivered to department personnel. Lending Solutions is sent to lending department personnel CFO Currency is sent to finance officials and Branch BUSINESS is sent to select branch managers and branch personnel as decided by top management. For the remainder of this year the number of recipients is limited only by CU management s decision of who gets which article. There is no limit. And an introductory 20 percent discount also applies on the 500 year flat rate. On top of that we ve earmarked 10 percent of each Team Builder subscription to be donated directly to the Children s Miracle Networks CU4Kids campaign. And this donation will be a permanent feature of the subscription campaign going forward to the years ahead. The Team Builder subscription entitles members to receive the magazine or specific parts of it and affords them total access to too. Here they ll find hundreds of searchable articles and a library holding more than 70 back issues of the eMagazine. And new to 2017 website access will include a digital Meetings Planner and Vendor Directory for easy research on the top vendors in the CU industry. For 2017 we are planning to expand our editorial menu from credit unions and industry experts in order to cover more areas in real life credit union business adventures. If you or your credit union has found a better way to serve your members or change your operations in any way we d love to hear about it. Please take a look at our 2017 Editorial Calendar on the back cover of ths issue. Or drop me a line tim with any and all questions or suggestions. I can t wait to hear from you. Thanks for reading Tim 6 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M t seems like we just celebrated the July 4th holiday weekend and here we are quickly approaching Thanksgiving. Time sure flies when you re having fun. And I m having lots of fun publishing Credit Union BUSINESS eMagazine and our fast-growing website Our small team of four professionals has worked hard during the past several years to build a niche BUSINESS eMagazine to help our growing army of CU executive readers with their jobs of running credit unions. We re spread out geographically to say the least with me in Florida designer Patti Manzone in Connecticut editor Kathy Kehrli in Pennsylvania and associate publisher Ashok Kumar in New Delhi India. Although Ashok and I haven t yet met in person we are in daily contact via Skype which we use to text or speak on the phone. It s like he is just down the hall even though he s half a world away. Ashok is a brilliant young man and a hard worker. He has mastered digital publishing during the last four years and has taught me a lot about creating digital media and the distribution of it in several formats. With his input we have a new delivery scheme that sends individual articles determined by the titles of the recipients. The determination is done by management at the subscribing credit union. We call it The Team Builder . The way it works is I gather 12 to 15 articles mostly from our All Star Writers industry experts like Rex Johnson s team writing Lending Solutions Emily Hollis of ALM First Advisors penning CFO Currency articles and Scott McClymonds of CEO Velocity. Each of the articles is then edited by Kathy s firm The Flawless Word. Kathy forwards the articles to Patti who then designs the eMagazine as if it were a paper magazine. You could accurately call it a hybrid magazine because we have the same page sizes as the old CUB issues. This technical revolution has saved us a ton of time and a ton of money. These savings are passed on to our 250 000 Credit Union Employees 92 Million Members 100 Million Miracles Since 1996 Credit Unions for Kids has raised more than 100 million for Children s Miracle Network Hospitals giving hope and healing to kids in your local community. YOUR FUNDRAISING DOLLARS IN ACTION MILLION 10 2 1 iMRI machine and surgical suite 1 Cardiac X-ray machine 1 Ultrasound machine 1 Bone marrow transplant 1 Fully-equipped Giraffe OmiBed incubator MILLION THOUSAND 270 THOUSAND 250 THOUSAND 100 BRA NC H BUSI NES S BY CHAD DAVIS Practical Banking Applications for Big Data in 2017 L What can your credit union learn from the personal fitness trackers that are becoming ubiquitous in today s tech-driven world The takeaway is all about the benefits of leveraging big data collection. Read on to discover how the Fitbit revolution can be applied to your CU s big data initiatives. Security concerns a lack of technology and prioritization all stand in the way of moving these big data initiatives forward. But none other than the idea of such a project being extremely daunting can typically be deemed the root cause of the lack of progress. With 2017 approaching these roadblocks should play less of a role in the decision to tackle big data head on. There are numerous technology providers in the financial services space making managing massive amounts of information as practical as Fitbit s ability to track and manage fitness for consumers. Perhaps the most straightforward examples of these technologies are 1) using front-line transaction information to better schedule staff-to-branch traffic volumes and 2) measuring visitor interaction intervals in the lobby to improve sales and service effectiveness. Workforce optimization solution providers help banks and credit unions leverage their core system data and HR data to develop easy-to-use and readily available performance management information. Managers utilize this data through interactive dashboards and monthly reports to make critical branch staffing decisions like whether or not to replace full-time employees when they leave through natural attrition. Schedulers also leverage big data to create day-today forecasted branch staff schedules based on actual historic transactions from their institution. 8 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M ike something out of a futuristic novel over the last couple of years more and more people gradually began to wear little devices on their wrists. Despite the Orwellian consequences tethered to these fitness trackers and other GPS-enabled technology devices people have adopted them en masse. This propensity leads us to the fascinating conclusion that when the mainstream public is given the option of measuring and managing large amounts of information to positively influence behavior they flock to the opportunity. While the simplicity of fitness dashboards helps make this revolution possible and may seem like it is no big deal to create let s not miss the impact this same simplicity has had on technological adoption rates. By design the devices creators knew it was critical to make this valuable information not only readily available but also easy to read and digest. The business world has countless opportunities to apply these same principles around their big data initiatives with the banking industry having more occasion than most. For decades financial institutions have collected consumer information like transaction activities from credit cards and branch visits filling up data warehouses the size of football fields. So why do so many banks and credit unions balk at the idea of practical applications for utilizing big data at their institutions He says PSCU responses are lickety-split quick. Jeff Phillipich Chief Lending Officer Great River FCU She says PSCU is adamant about answering questions. Cathy Worth Card Services Manager TruStone Financial Let s Talk About Service. In 1977 five credit unions came together to form PSCU and service became the foundation on which our cooperative was built. Today our Member-Owners total 800 credit unions strong and we re proud to say we re focused on the meaning of exceptional service. We re asking the questions that empower your growth. And we re doing it all through real conversation. See what else our Member-Owners are saying at service. service 844.367.7728 BRANCH BUSINESS Measuring visitor interaction intervals like assist times per product service and wait times can lead to eye-opening revelations about the performance of the branch. Realizing that one service representative spends 15 minutes longer per average car loan interaction than all his her peers sets the stage for an immediate coaching opportunity. Managers can also see real-time metrics throughout their branch networks like excessive wait times. Such an accountability loop helps drive worldclass staff performance. These systems can also be set up to send by-the-minute automatic service alerts when undesirable service thresholds are surpassed. Like the fitness applications have taught us making sure the reporting is easy to understand and applicable to driving the right outcomes is key to a successful big data initiative. Both workforce optimization solutions and lobby-tracking software are just two examples of ways banks and credit unions can leverage technology to cash in on the big data movement. With many more sophisticated programs out there and some exciting technologies in development we re living in exciting times. Chad Davis is SVP of Marketing of Alpharetta Ga.-based Financial Management Solutions Inc. (FMSI) which provides financial institutions with business intelligence software and performance management systems for efficient branch staff scheduling and lobby management. He can be reached at chadd 10 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M COMP LIA NC E UPDATE BY BRIAN GODWIN AND JASON HARPENAU Compliance Talent Gap Challenges Credit Unions I Is your credit union struggling to find and retain just the right compliance pros for all the various rules and regulations that must be followed With the talent gap expanding more quickly than CUs can keep up outsourcing a portion of compliance is becoming an enticing solution. See how one credit union is making such a strategy work. t is not uncommon to find a credit union with a pressing need for compliance expertise. What is unusual however is finding the right people to fill that need. There are multiple reasons credit unions have difficulty hiring experienced compliance professionals. Chief among them is the sheer speed with which the discipline has evolved. Just a decade ago compliance specialists managed one or two regulatory changes each year. That is far from the case today. Now credit union leaders juggle countless proposed final and modified rules across categories. Doing so requires an expansive skill set and an almost impossible command of multiple financial products and services. Regardless of an individual s history or knowledge of a credit union s operations it remains difficult to manage the compliance effort as one person. For some credit unions this has meant expanding the cooperative s competency by building an entire team dedicated to regulatory compliance. Of course that means conducting the search performing the onboarding and paying the salary benefits and other costs for multiple employees. In 2016 Robert Half Management Resources projected above-average increases in starting compensation for every type of compliance role at U.S. businesses of all sizes. What s more all this applies to those credit unions that are fortunate enough to find knowledgeable 12 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M individuals available for hire in the first place. Those cooperatives that are unable to locate the right people are left to coordinate expensive time-intensive training for existing staff members who must get up to speed quickly on the intricacies of various rules and regulations. Aside from the cost and time burdens of training credit unions that invest in building up their internal compliance competency often face another problem not too far down the road Employees who possess or obtain compliance knowledge can be difficult to retain. Compliance expertise is in high demand these days and those who have it can tell you the calls from head hunters are never ending as are the enticing offers. According to CareerBuilder Des Moines Iowa a city of just 600 000 people had need for more than 450 compliance professionals within the last year alone. COMPLIANCE UPDATE Look at New York City during the same time period and that number jumps to 4 300 open compliance positions Of course a new job offer isn t the only reason individuals with compliance experience may leave the cooperative. A tidal wave of retirement parties has already begun to crash in on the credit union industry as 50 percent of community financial institution CEOs and other C-level managers are expected to leave their posts in the next five years. Coined the Silver Tsunami the mass exodus of Baby Boomers from a wide swath of professions is sure to have an impact on the credit union industry s network of compliance specialists. In fact CareerBuilder data indicates well over half of the individuals who hold a compliance officer position are over 45. Nearly 28 percent of them are over 55. Outsourcing a portion of the execution of compliance strategy and duties has become a welcome solution for many credit unions confronting the compliance talent gap. After Centris Federal Credit Union s compliance officer left to pursue an opportunity with a large national bank in the area the cooperative took a threefold approach to replacing her position. First leadership promoted an internal candidate who now has responsibility for the credit union s Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance. Second the credit union partnered with PolicyWorks to manage compliance reviews and audits as well as to serve as an on-demand resource for the inevitable daily questions that arise. Third the credit union shifted many of the day-to-day compliance activities to its director of risk advisory services Gary Fillman. In addition to those daily compliance tasks Fillman also leads Centris FCU s internal compliance committee which is composed of employees from each of the credit union s business units that have compliance responsibilities. As our compliance demands continue to increase we ve worked to cover the three lines of defense having adequate policies 14 C R E D I T U N I O N B U S I N E S S procedures and controls a monitoring and review process as well as an internal audit program said Fillman. Hiring individuals with experience in each of these areas particularly if you are doing business in a competitive market is often outside the budget. At the same time there aren t enough hours in the day to mentor an entry-level person. For us filling the gap with an outsourced partner has been an ideal part of the solution. The decision to hire outsource or rely on a combination of the two methods is a highly individualized one. The objective is to ensure compliance with fastpaced complex regulatory changes. Achieving the peace of mind that comes from knowing compliance is being managed by knowledgeable member-focused individuals can be powerful. With the assurance that it s all being handled competently credit union leaders can focus on the perfect execution of their mission and the flawless services of their members. Brian Godwin is Director Compliance Solutions (515) 221-1851 briang Jason Harpenau is Business Development Manager (515) 221-1856 jasonh TURN ON YOUR COMPLIANCE OFFICER withTEAMBUILDER. 4 COMPLIANCE UPDATE teambuilder buy 2 0 1 6 C U B U S I N E S S . C O M N O V E M B E R MEMBER BU SI N E S S L ENDING BY CORINNE KALSKY Creating Loyal Passionate Member Relationships the Right Way M When it comes to generating credit union sales there is a right way and a wrong way of going about it. Using the Wells Fargo scandal and in contrast United Federal Credit Union as case studies CUB reveals the correct approach for creating member relationships that are built to last. challengers including so-called alt lenders and online banks has increased. Credit unions have also weathered a rising compliance burden stemming from implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act slews of new regulations and supervisory guidance from the National Credit Union Administration (NCUA) and the establishment of the massive Consumer Financial Protection Bureau (CFPB). Regulations implemented just in the past few years have included enhanced credit card disclosures new mortgage disclosure requirements appraisal review requirements risk-based capital and the Financial Accounting Standard Board s new current expected credit loss (CECL) guidance to name a few. uch has been made of mega-bank Wells Fargo s recent disclosure that employees opened an estimated two million fake accounts for customers in a misguided attempt to achieve aggressive sales targets. Wells Fargo has fired 5 300 employees over the past five years for reasons related to the scandal and the bank has agreed to settle with regulators for 185 million. CEO John Strumpf has been called to Washington several times to testify before both the Senate and House banking committees and as of this writing he has agreed to forfeit 45 million of his personal compensation. There are certainly lessons to be learned for all financial institutions and this scandal places the obvious pitfalls of aggressive cross-selling in sharp relief. But most credit unions choose a different path one that is consistent with the movement s cooperative memberowned philosophy and some have taken innovative approaches toward building loyal long-term member relationships. TURN ON YOUR LENDING DEPARTMENT withTEAMBUILDER. A Challenging Landscape Today s credit unions face multiple daily challenges on a variety of fronts. In the post-recessionary era historically low interest rates have pressured margins and reduced net worth ratios. Competition from new 15 C R E D I T U N I O N B U S I N E S S 4 LENDING SOLUTIONS C U B U S I N E S S . C O M teambuilder buy N O V E M B E R 2 0 1 6 MEMBER BUSINESS LENDING According to a recent CUNA Cornerstone Advisors study the total cost to credit unions of regulatory compliance and the resultant loss of revenues was estimated at 7.2 billion in 2014 alone. For smaller resource-challenged institutions in particular the burden of complying with this tsunami of new regulation is becoming nearly unbearable. Yet despite this stark backdrop credit unions have an opportunity to grow and thrive by doing what they have always done focusing on the needs of the member. our services the features and benefits and [who] can ask the appropriate questions to determine what would best serve the member s needs. Consistent with the cooperative philosophy many credit unions go the extra mile to find the right solution for their members even if that means referring them to another credit union. Taking the long view they understand that creating a mutual partnership that is built on trust and honesty will pay far greater dividends over the long term than trying to sell a slew of unneeded products. The Right Way Taking a Consultative Approach Add Value to the Relationship The Wells Fargo fiasco teaches us that there is a wrong way to generate sales and a right way. The most successful credit unions take a consultative approach to cultivating long-lasting fiercely loyal relationships. For United Federal Credit Union ( 2.1 billion St. Joseph Mich.) sales are simply a natural outgrowth of providing outstanding member service. According to Stacy Fillmore Vice President of National Sales and Service United s tellers are skilled in picking up on conversational cues and they take the time to analyze current relationships to identify triggers such as large savings balances. From there tellers will often refer a member directly to a member service advisor (MSA) through a warm introduction. In turn the MSAs are trained to engage members in open-ended conversations to assess their unique specific financial needs. We always try to make the personal hand-off Fillmore says. The member is able to meet with a well-informed MSA who understands our products 16 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M In the business services arena there are countless ways for credit unions to cultivate long-term trusted partnerships. Here are a few ideas to get started Spotlight a Business Member of the Month What better way is there to offer value to your business members than by featuring their company in front of the entire membership It takes little effort to allow businesses the chance to tell their story and share some information on the products or services they provide. Some ways that credit unions promote their member businesses include a rotating display in heavilytrafficked branches a profile in the quarterly member newsletter or a feature story on the credit union s website. Offer an Annual Business Review One of the biggest headaches for business lending credit unions is obtaining updated financials and tax returns from borrowers. Many members simply see these requests as a zero-value hassle and fail to comply. Here s MEMBER BUSINESS LENDING a way to turn that request into a real benefit for the member why not offer your business borrowers a free in-person annual consultation with their loan officer This review may include a detailed analysis of the business s current financial condition market demographics and competitive landscape and it may offer recommendations for how to reach next year s revenue and profit targets. What a way to differentiate your credit union from the competition and to build trust and a true partnership over time. Create a Rewards Program Some credit unions offer their members specific benefits based on how many services they maintain or how many transactions they run through their accounts. Members generally prefer to have most of their financial accounts at a single institution for convenience purposes. By offering additional incentives (such as discounts on loans fee waivers or higher interest rates on savings) you can increase wallet share over time. Link to Business Resources on Your Website Does your credit union s website have a dedicated business resources page By linking to important pages such as the Small Business Administration (SBA) your local small business development center and additional services such as merchant and payroll service providers you can turn your website into a convenient go-to hub for The 1 Solution for Member Business Lending 17 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M MEMBER BUSINESS LENDING small business members and prospects. Try also including tips and best practices on this page or even incorporate a regular blog highlighting hot topics for small business. Drive Referrals through the Branches For most credit unions the greatest opportunity to interact face to face with business members is when they walk into a branch. Successful cooperatives make the most of these high-volume interactions by coaching branch representatives to facilitate meaningful conversations. United has implemented an incentive plan called Stratification in which all tellers and MSAs are evaluated on areas including product knowledge and service skills as well as cross sells. Such a strategy ensures alignment of the individual employee s goals with those of the member and the credit union as a whole. Our employees are not paid per product sold which is typical in the banking industry Fillmore says. Instead every teller in a particular level is paid the same amount and they are in complete control of what level they want to rise to and maintain. It is a rewarding feeling for the staff to build relationships by simply acting in the member s best interests. A robust and flexible tracking platform is a key to successful relationship building. United uses a cloud-based bank operating system that provides both customer relationship management (CRM) and loanboarding functionality to facilitate the referral process workflow. Technology is essential Fillmore says. It is a key communication tool. It enables those who are out in the field working directly with the member to have all of the information they need right at their fingertips. Technology allows us to monitor evaluate and compare performance across the board. It provides tremendous insight to the leadership team and the team as a whole. Building long-term relationships in a highly competitive financial marketplace is never easy. But by placing a consistent focus on members needs aligning team incentives with organizational goals and tracking results credit unions can both grow market share and offer true value to their business members. Corinne Kalsky is regional vice president of credit unions for nCino the worldwide leader in cloud banking. or connect with the company on LinkedIn and Twitter nCino. Through its flagship operating system nCino leverages the power of to provide credit unions and other financial institutions with superior transparency and clarity into their existing loan production pipelines portfolios and operating efficiencies across all business lines resulting in increased profitability productivity gains and regulatory compliance. For more information visit www.ncino.comor connect with the company on LinkedIn and Twitter nCino. 18 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M PAYMENTS BY BILL PRICHARD Top 10 Communication Strategies Behind Every Successful Card Program Ever wonder what it takes for a credit union to attain best-in-class card program status Well wonder no more. This set of Top 10 strategies will take your mix of credit and debit card products from lackluster to blockbuster in no time flat. A s any financial institution will attest a lot of time energy and resources goes into developing a best-in-class card program and for good reason. Offering just the right mix of credit and debit card products is one of the most valuable services you can provide to members. To help you generate all the member engagement and excitement your card program deserves comprehensive marketing and communications support is imperative. Here are 10 strategies for success from CO-OP Financial Services ( 1. Know your membership. This means leveraging advanced technologies that deliver data access and analysis reporting. Understanding member spend patterns behaviors and preferences is critical to determining new product direction targeted marketing segments and the promotions and offers to execute to reach your portfolio s maximum potential. 2. Send the right offer at the right time. Once you have established which members are the best candidates for each card product show them a relevant offer at every touchpoint in the branch online and within your mobile apps. Keep your messages consistent to get the best results. 3. Reward cardholders. And do it as often as possible. Give loyalty points for opening an account making a transaction increasing 19 C R E D I T U N I O N B U S I N E S S card usage and signing up for mobile banking. Consider a merchant-funded program that can help you offset costs while giving members a customized offering with lots of local cache. Make the rewards flexible with options for travel merchandise and cash back. And send loyalty updates. Congratulate members by text whenever they earn triple points at CVS or a free pizza at Domino s. 4. Tie debit and credit products together. Rewards are a great vehicle for achieving this tie-in. If a member has one of your debit cards but not your credit card promote the benefits of earning rewards on two cards. Frequently one family member is more apt to use debit while TURN ON YOUR LENDING DEPARTMENT withTEAMBUILDER. 4 LENDING SOLUTIONS teambuilder buy N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M PAYMENTS another relies on credit so householding points can lead to better returns for the entire family. And make sure both credit and debit accounts are integrated into your online and mobile banking platforms. Members prefer and expect to access a holistic view of their finances and tighter integration between accounts makes for a tighter relationship with the member. 5. Launch a direct mail campaign. What is old is new again. All the major card issuers have gone right back to direct mail because it works. CO-OP recommends employing a strategy that is extremely targeted at first because of the expense involved. Working with small groups of members will ensure that you can apply the time and resources needed to effectively follow up on campaigns. And remember that this is not necessarily a one and done proposition. Repetition is powerful so plan to send members a second round of mailers to drive your message home. 6. Talk up the security of your cards. To members security equals peace of mind and inspires confidence in your brand. So make sure members are well informed on all the measures you take to safeguard their information including any mobile apps you offer for card controls and alerts. These innovative tools empower members in the fight against fraud allowing them to set exacting restrictions on how when and where their cards can be used. 7. Make applying easy. Provide online account opening membership DDA and credit accounts. Carry this access throughout your digital channels. When online account opening isn t available place a banner ad that links to your application right on your home page and within your online and mobile banking portals. The easier it is for members to access and complete an application the more likely it is that they will follow through with the process. And always have 20 C R E D I T U N I O N B U S I N E S S applications on hand at ATMs and in the branch in addition to the prime real estate afforded them across all your digital channels. Be sure to keep clicks to a minimum. 8. Cross-sell at account and loan openings. Any time you are already pulling a credit report is the right time to offer a credit card. Your loan and account officers should know how to read the report and determine the other credit accounts the member has. Discuss balance transfers and any special offers you have for new cardholders. 9. Encourage signature debit. Your debit cardholders receive additional consumer protection when they sign for debit and they should be aware of this fact. This practice also benefits your credit union by reducing transaction fees overall. 10. Recognize the critical role marketing plays. If you create the best card program in the industry and members don t know about it it will simply be a cost. So include the marketing team in your management committee. Construct strategies that put cards in front of members at every turn. The fact is that marketing is more important than just about anything else you do to support your card program. And expanding your cardholder base is vitally important to your future growth and success. Bill Prichard is senior manager public relations and corporate communications for COOP Financial Services ( a Rancho Cucamonga California-based provider of financial technology to credit unions. Prichard can be reached at bill.prichard and (800) 782-9042 ext. 3450. 2 0 1 6 C U B U S I N E S S . C O M N O V E M B E R RISK MA NA G EMENT BY JASON O BRIEN Put Your Risk Management Services on AutoPilot T If your credit union is struggling to keep electronic pace when it comes to risk management services you may very well be confusing and frustrating your current and would-be customers. Fortunately for CUs risk management handling isn t rocket science. Using a unified dashboard can help you pilot technology with barely a second thought. institutions avoid losses mitigate risks and strengthen their loan portfolios. They concentrated on managing relationships with credit unions banks and insurance companies including the management of overhead and staff. Their strong client relationships and focus on quality service allowed SWBC to grow at an incredible pace and today it is an international financial services company providing a wide range of insurance mortgage and investment services to businesses families and financial institutions. Part of SWBC s expansion included the creation of the SWBC Financial Institution Group. This division employs over 400 people in its San Antonio Texas office and provides quality solutions and services that help financial institutions of all sizes manage risk generate income and streamline operations. It did not take long for Financial Institution Group leadership to realize that there was a major issue when it came to risk management. Related service areas should hanks to the ease and accessibility provided to us by smartphones and tablets consumers now expect similar electronic competence in all aspects of their lives. Unfortunately financial institutions and especially those in the risk management space have struggled to keep up with this trend. Most banks and credit unions separate various risk management service offerings such as collections payments processing insurance tracking and asset recovery into entirely different silos and access them individually on an as-needed basis. Not only is this confusing for lenders but it is also extremely frustrating for the modern consumer who is used to speed and efficiency when it comes to technology. Fortunately risk management does not need to continue to be handled in this way. On April 1 1976 childhood friends Gary Dudley and Charlie Amato founded SWBC with 1 500 of starting capital. Their aim was to help financial Charlie Amato and Gary Dudley 21 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M RISK TAB MANAGEMENT not be kept in independent silos where they hinder communication accuracy and efficiency. For that reason SWBC designed AutoPilot Risk Management a suite of risk and account management services that can be easily accessed through a unified dashboard. AutoPilot provides one location where users can order services monitor status view all notes and run reports at the loan level or for an entire portfolio. Financial institutions that use disparate systems for risk management often face productivity problems said Brad Young chief operating officer of SWBC Financial Institution Group. A multichannel platform allows information to be instantly Brad Young shared between risk management areas driving out inefficiencies and enabling financial institutions to do more with less. This unique SaaS offering delivers on four independent solutions namely collections payments processing insurance tracking and asset recovery. AutoPilot increases efficiency and cuts cost by providing all aspects of risk and account management services on one easy-to-use portal. At California Credit Union management struggled with the overall cost of their outsourced collections service provider. After receiving a demonstration of AutoPilot and touring SWBC s two state-of-the-art 22 C R E D I T U N I O N B U S II N E S S B U S N E S S call centers the credit union chose to convert to SWBC in 2013. We are able to analyze the trend of delinquencies of each of our products by creating a specific work list queues and reports that we can generate Marvel Ford from the AutoPilot software said Marvel Ford first vice president and risk management officer at California Credit Union. If one product needs more attention we are able to change the parameters and focus on that specific product within seconds. In the first 12 months of outsourcing its collection services to SWBC s AutoPilot software California Credit Union experienced a 35 percent reduction in overall delinquency. Additionally the leadership team at the credit union has gained significant peace of mind knowing that AutoPilot is focused on helping them stay compliant. Florida-based Fairwinds Credit Union also struggled with collections services but its issue was that all collections activity was completed manually by full-time employees requiring a large amount of time and effort to coordinate. In 2007 as the economy began to worsen and delinquencies began to increase the credit union was faced with the decision of hiring additional staff or outsourcing collections services. NN O VV EE M BB EE RR O M 22 00 11 66 C U B U S I N E S S . C O M Don t let this valuable offer pass you by. Jump on the CU BUSINESS Express to help your credit union GROW for your members employees and community. 1. Each member gets CU Business monthly eMagazines. 2. Individual articles are emailed to each member by job title. 3. Bonus New members also receive last 12 articles CFO Currency Lending Solutions Marketing Matters Branch BUSINESS etc...) 4. Each member has full access to CUB website and its 65 issue library. Sign Up Your Entire Crew for Team Builder Click Here To Register Your Crew A U G U S T 2 0THE 6 1 ONLY ALL-DIGITAL ALL-BUSINESSSRESOURCE FOR .CREDIT M C U B U I N E S S C O UNIONS RISK MANAGEMENT Upon implementing AutoPilot to handle collections in 2009 Fairwinds has been able to reallocate internal staff toward growing the credit union. Fairwinds has lowered its number of collectors by two has increased efficiencies and has reduced earlystage delinquency by 4.5 million. AutoPilot has helped tremendously in the collection department Steve Plotkin to reduce operational time to complete tasks said Steve Plotkin vice president of collections at Fairwinds Credit Union. We are always asking staff to do more with less so AutoPilot has been a perfect solution. With the help of AutoPilot SWBC s Financial Institution Group is reducing costs and manual errors associated with risk management services. Simultaneously it is increasing consumer financial wellness. This important fact while a prominent topic of conversation in the payments space is often overlooked in other areas of risk management. In short financial wellness means managing debt and Mark Hein paying loans on time said Mark Hein chief executive officer of SWBC Financial Institution Group. The comprehensive platform that my team has developed enables financial institutions to more efficiently collect payments interact with borrowers and reduce the strain associated with delinquencies on both consumers and the institutions themselves. Jason O Brien is senior vice president of payments in the Financial Institution Group at San Antonio Texas-based SWBC an international financial services company providing a wide range of Jason O Brien insurance mortgage and investment services to individuals businesses and financial institutions. SWBC s Financial Institution Group provides quality solutions and services that help financial institutions of all sizes manage risk generate income and streamline operations. For more information visit https . 24 C R E D I T U N I O N B U S II N E S S B U S N E S S NN O VV EE M BB EE RR O M 22 00 11 66 C U B U S I N E S S . C O M CEO VELO C ITY BY SCOTT MCCLYMONDS Putting Core Values to Work O The application of core values is vital to credit unions championship status but what does the term core value mean anyway And how does your CU ensure such values are put into action and consistently executed These strategies will help you get the most out of your guiding principles. actions. They help companies determine if they are on the right path and fulfilling their business goals. They also create an unwavering and unchanging guide. Core values are strategic and permanent. While strategies and tactics vary the guiding principles of your company your core values do not. The question is how do you make them actionable and ensure you are consistently executing upon them ne of the biggest leadership lessons I ve learned is the important role core values play in a company s success. More precisely how companies apply their core values to their everyday business practices is the difference between thinking and acting like a champion versus being an average performer. I had always read about the importance of core values and had established them for each company I owned. But it wasn t until I began engaging the CEOs of some of the nation s largest credit unions that I started to see how core values can be driven down to specific behaviors that are measurable and actionable. Since applying core values is so important let s define what that phrase means. Your core values are the heart and soul of how you do business. They are the guiding principles dictating appropriate behaviors and Making Core Values Actionable For me the answer to that question began to crystallize during a discussion with Donna Bland CEO of Golden 1 Credit Union in Sacramento Calif. Donna and her board had created core values for their credit union but unlike many other companies she and her team made the effort to drive them into each aspect of the company. For example they spent time determining how the core values applied to their call center as a unit as well as to each individual working there. They associated specific actions with each core value and they created measures for each business unit and employee to determine how they were performing against each core value. Donna and her team also use core values to carefully screen prospective employees including executive management. Not only must candidates have functional expertise for their jobs but even more importantly they need to be the right fit with the company s culture and core values. 25 TURN ON YOUR C-LEVEL 4 CEO withTEAMBUILDER. DEPARTMENT HEADS VELOCITY U N I O N B U S I N E S S teambuilder buy C R E D I T N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M TAB VELOCITY CEO Here are some highlights of what Donna told me about making core values actionable. When I became CEO about four years ago I went through the process of working collaboratively with our board to clarify and reconfirm our mission confirming our vision and stating specifically what our strategic goals are. Our approach was clearly defined within the context of our core values. We developed them defined them and documented them. Those words need to live. We consistently reinforce those [guiding principles] over and over again. They are reflected in our messages actions and decisions. We never take our eyes off them. We have different opinions and approaches and I appreciate the diversity but in the end we all have one common goal and that s the mission of our credit union. And our mission is we deliver financial solutions with value convenience and exceptional service. It s very simple. We stay focused by keeping our vision and mission in front of us all the time with very specific strategic goals we ve laid out with our board. We ve laid out our core values too. They re all spelled out. I communicate them constantly. They are service excellence respect integrity and financial stability. They re core to everything we do and they help lead us down the right path for Golden 1. That s how we are very much focused as an organization. Our strategy is dynamic in order to respond to changing consumer demand and needs but consumers want value convenience and exceptional service. We always evolve but in the end it always boils down to those three things. Using Core Values to Select Leaders Donna continued I have a great team at Golden 1. The key is finding people [who] complement the team we have and truly reflect our brand and core values. If our brand and core values are not the essence of who they are they ll be less successful at Golden 1. They may be successful in one business but not ours because we have a different set of core values and brand. Our decisions need to be based on those [distinguishing markers] to achieve our mission. Everything we do is focused on our identity. Finding people who complement our brand and core values not [those who] just have a sharp resume is key. We succeed at Golden 1 when our team succeeds. Every person matters. We look at who they are as individuals on top of their skill set and experience. That s fundamental. A lot of people will have the fundamental skills but not a lot will reflect our brand and core values. Finding the right people takes time. It s like selling a house. It only takes one buyer. You have to wait and not compromise on your selection of individuals because if you do you have compromised the success of your team. Someone who uses I a lot instead of recognizing that there was a team involved in their success won t make the cut. I m looking for leaders and I want someone who recognizes they re part of a team not a silo. 26 22 00 11 66 C U B U S I N E S S . C O M C R E D I T U N I O N B U S II N E S S B U S N E S S NN O VV EE M BB EE RR O M CEO VELOCITY Someone who understands service and can define it. That s fundamental to who we are. Exceptional service is part of our strategic goals. If they re not a serviceoriented person they wouldn t be a good fit. If they re not talking from a member perspective that s the type of person we don t want. One question is What would be your career if you weren t doing this The answer is telling about their personality. We also ask about their cultural values because I want an engaged work force. So how they care for their employees is important. I am hiring leaders and they re hiring tomorrow s leaders. They re responsible for our future. I have to make sure I hire people who reflect our brand and core values and who serve our members and I have to make sure those leaders do the same. That s who we are at Golden 1. Smaller Credit Unions Can Do This Too There you have the CEO of one of the nation s largest credit unions discussing the critical nature of core values in her organization and the ongoing emphasize to apply them to all areas of Golden 1. While Donna is clearly a great leader and has vast resources available to her I challenge leaders of smaller credit unions to replicate something similar despite not having as many resources. As a small business owner I have found I can do everything Donna has done. So I know you can do the same at your credit union. There s a secret to it though. We have to prioritize and schedule it. Otherwise it won t happen. Just like any other system in our businesses such as hiring training or operations we can either ignore the need to make core values actionable or we can make the same effort as Donna and her team have. The tendency in many credit unions is to ignore core values and keep scrambling from day to day but Sco tt McClymonds an d CEO Velocity help credit unions acquire and retain profitab le mem bers. Using mem ber portfolio management and other advanced strategies CEO Velocity helps you imp rove profits while better servin g the needs of your members and communities. Do you need to stand out more from your local fin ancial services providers Wo uld you like to have deeper m ore impactful relation ships with your members Do you need more profitable members Does you r profitability need to increase Do you r have business un its or branches that need to improve performance Do you need to more effectively reach you r market Email scottm ceo to request a free paper on how to find an d close earni ngs gaps in your credit union. I have worked with hundreds of clients on strategic marketing programs over the last 20 years and Scott McClymonds is at the top of the list. I would highly recommend Scott as a resource to anyone looking to improve their performance. - Tim Keith Partner and Chief Strategist Infusion Marketing Group 27 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M CEO VELOCITY that s what average performers do. Champions devote time and energy to strategic thinking despite the fact that other pressing issues exist. They do things like map core values to measurable behaviors. Challenge Questions for You 1. What are your mission vision and core values 2. Are they the bedrock of your credit union or are they words that hang on a wall 3. What are you doing daily to make sure these words come alive 4. How are you ensuring that all your employees can clearly articulate and execute upon them 5. Is your strategy congruent with them 6. Do you use fit with core values and your brand as criteria for hiring Core Values in the Real World One core value of my family s small business is total customer satisfaction. Recently a client had an event for important guests. Prior to beginning our work we gathered our team and talked about this core value. Specifically we discussed with this client how to apply it to our work. Unfortunately the client had an unexpected crisis but this core value of total customer satisfaction motivated us to spend considerable energy helping the client fix it. We succeeded that day because we took words off a page and applied them to specific work tasks. We made them real and measurable. It s Time for You to Apply the Lesson You ve heard briefly how Donna Bland at Golden 1 applies core values to the management of her credit union as well as the hiring of senior leaders. You also heard how my family s business applied a particular core value with our team on behalf of a client in crisis. Let me close by asking you to schedule time to write down your credit union s core values define what they really mean in terms of daily performance and then ask yourself what actions you as a leader can take to better communicate them to your team and make them part of each employee s behavior. The more you discipline yourself and your leadership team to apply core values the more your team will follow and the more champion-like results you will experience at your credit union. Scott McClymonds of CEO Velocity coaching and consulting helps credit unions develop systems for leadership management and analytics that increase performance profitability and brand strength. A frequent speaker to credit union directors and executives nationwide Scott s presentations and articles can be found at He can be reached at 479.263.0774 or scottm TURN ON YOUR CFO and CEO 4 CFO withTEAMBUILDER. CURRENCY C U B U S I N E S S . C O M teambuilder buy 28 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 BRA NC H BUSI NES S BY KELLY DURCAN The Local Branch is Dead. Long Live the Branch NEFCU s Utilization of Technology Transforms the Corner Branch W Reports of the credit union branch s demise have been greatly exaggerated. Indeed one CU s new branch is heralding not a death knell but rather a potential renaissance of the local branch concept. This case study illustrates how credit unions can infuse new energy into their branches despite protests to the contrary. ith just one look inside the sleek clean and modern credit union branch that opened recently in Long Island s Bay Shore village it s clear that the rumors of the local branch s demise have been greatly exaggerated. In fact this smaller-sized tech-heavy location from NEFCU (Nassau Educators Federal Credit Union) is a sign of the possible rebirth of the local branch concept. By utilizing user-friendly technology and smaller formats credit unions are infusing new energy into their branches providing greater member benefits and adding efficiencies to their locations. Proof of this tendency is this latest NEFCU branch which is half the size of a typical location and is considered one of the most digitally driven on Long Island. Long seen as tired bloated and out of sync withhow today s consumer interacts and transacts the anachronistic local branch is being resuscitated by the likes of NEFCU and other forward-thinking credit unions that are turning to technology to create Branch Banking 2.0. The 2 000 square-foot Bay Shore site is the prototype of all future NEFCU branches. It is awash in 29 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M the latest technology including a digital service center where touchscreen monitors enable members to get product information download brochures and access a real-time digital rate board. Offering an uncluttered environment where branch employees are out front assisting members as opposed to behind a desk the latest branch from the local credit union aims to prove how less is more. I think we ve seen how the big banks have begun to utilize technology as a way of de-personalizing the banking experience by eliminating human interaction. TURN ON YOUR MARKETERS MATTERS withTEAMBUILDER. 4 MARKETING teambuilder buy BRANCH BUSINESS TAB We see it as an opportunity to create efficiencies and reduce wait times while providing personalized teller service through video technology said Valerie Garguilo vice president of marketing and community relations at NEFCU. As more banks appear to be moving away from personal interaction with their accountholders and customers (e.g. mobile banking services tellerless transactions etc.) credit unions are seeing an opportunity to further cement the personal relationship. The common belief is that the implementation of technology often leads to a corresponding decline in personal service. And that the more technology that is introduced to a business the more likely a loss of jobs ensues. It may run counter to what one would think but NEFCU is finding that its technology-centric approach to branch services will ultimately lead to more hires and greater member interaction simply because it means opening more branches. Technology actually allows us to provide an even greater personal connection to our members said Garguilo. The biggest advantage is that we can now open so many more branches because of the new smaller sizes. The more branches we can open the more we are able to serve and interact with members face to face utilizing this new technology. 30 C R E D I T U N I O N B U S II N E S S B U S N E S S NEFCU s Bay Shore branch has a much more relaxed vibe to it than typical branches and not just because of its design and layout. At this branch member service representatives and other branch employees are free to walk around untethered to a desk in order to best assist members with questions or issues. The culmination of this freedom is a more relaxed and friendly atmosphere. And with its new format approach to branches NEFCU is revising its new branch roll-out plan formulated just five short years ago. We had envisioned opening an average of one branch per year back in 2012 but given how little space we now need to service members we ll be on track to open three to five new branches every year beginning in 2017 said NEFCU s Garguilo. The smaller-footprint branch format provides remendous savings to a credit union in the form of reduced real estate costs especially when looking for space in the pricey suburbs of New York City. Instead of commanding 4 000-square-foot locations NEFCU will be free to scour downtown sites or other desirable locations that may be as small as 1 500 square feet. Faced with the reality that members wanted more branches not fewer NEFCU determined that its branches would need to be as efficient as they were convenient. The result was the decision to create a smaller-sized branch that was technology-centric. NN O VV EE M BB EE RR O M 22 00 11 66 C U B U S I N E S S . C O M BRANCH BUSINESS TAB Teller Machine. Within seconds members can see and talk to a live teller who is actually located at the credit union s headquarters a few miles away. The centralized teller system will eventually allow NEFCU to transform all its branches into video-enabled teller systems. In opening its Bay Shore branch in late September NEFCU was confident it would be well received by members but aware that a learning curve needed to be navigated by some members. Technology doesn t have to be scary when it comes to banking said Garguilo. Having our live tellers available via a touch of a button and our service reps accessible in the branch helps ease the experience for the most technologically-averse member. So far we ve seen nothing but excitement and acceptance by these members. It s been said that the obituary for the local bank had been written long ago. But given what s happening at NEFCU s latest branch east of New York City a dramatic revision to that story is now taking place and it s being written on touchscreens and other digital devices. Members would get personal service at convenient locations but the branches would reflect how NEFCU planned to usher in a new era of digitally-driven banking. By taking this route we re able to appeal to a growing member base that is increasingly reliant on and comfortable with technology to do its banking said Garguilo. Our push toward digital does not come at the expense of our personal approach to servicing our members. We re evolving with our members and providing them with the type of banking that is most convenient attractive and secure to them. NEFCU s prototype branch does feature five branch employees at the location but it does not have tellers standing behind glass partitions. Those looking to work with a teller can easily access one via an Interactive 31 C R E D I T U N I O N B U S II N E S S B U S N E S S NN O VV EE M BB EE RR O M 22 00 11 66 C U B U S I N E S S . C O M Kelly Durcan is director of public relations at the awardwinning advertising agency DeVito Verdi based in New York City. Throughout his 30 years in the industry Kelly has handled public relations for scores of national brands and companies non-profits trade organizations banking institutions foreign governments and international entities. CFO C U RRENCY BY BRITTANY ROLLEK The Twisted Yield Curve Scenario A building block to better balance sheet management A base ALM model is useful but it doesn t give credit unions the full market rate picture. That s where the twisted yield curve steps in and fills the gaps. Keep reading to learn how such sensitivity analysis can help your CU comprehensively manage its balance sheet. part from being a common regulatory request In a normal market environment with an upward modeling the balance sheet s sensitivity sloping yield curve and strong growth expectations to the yield curve via a twisted yield the opportunity cost of investing long versus holding curve scenario is a valuable analysis for cash is relatively high pushing demand into short-term comprehensive balance sheet management. instruments and widening the spread between short- and While the base ALM model assesses present value long-term yields. In market environments where this projected earnings and their volatility in parallel shocks spread tightens there is either a lack of confidence in to market rates a twisted yield curve scenario measures long-run economic growth or short-term rates have the sensitivity of the risk position when interest rates increased relative to long-term rates driven by events move in a non-parallel fashion. Because actual market such as a tightening in monetary policy. In some cases rates typically don t move in parallel shifts modeling when the future economic outlook is very poor longthis kind of change helps illustrate how the interest rate risk position might look in a different economic landscape all else being equal. It can also highlight how different financial instruments are affected by movements in specific sections of With 20 billion of investments under management ALM First the yield curve. Understanding yield is an SEC-registered investment advisor acting as an unbiased third party offering commission-free fee-based services to over curve sensitivity is essential to the 200 nancial institutions across the country. Services include greater task of strategy development. It s also critical to building a balance Asset Liability Management ALM Validations sheet that doesn t leave the institution Investment Advisory Investment Portfolio Analysis exposed to one directional risk. Merger Valuations MSR Valuations The shape of the yield curve at any given Hedging with Derivatives Training and Education time expresses market expectations Loan Pro tability Analysis and more... of both the macroeconomic outlook and the future path of interest rates. 800-752-4628 www.alm 32 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M A CFO CURRENCY term yields can drop below short-term yields. Extreme demand for long-term investments under the expectation that rates will be much lower in the future precipitates such a downturn. Typically this type of environment is corrected back to a normal rate environment albeit usually at lower overall yield levels. There are many ways to manipulate the yield curve when designing a scenario for sensitivity analysis but all methods center on adjusting the level of rates and the slope of the curve. The slope of the yield curve is defined as the difference between short-term and longterm yields and is commonly shown as spread between two-year and 10-year spot rates. There are three types of slope adjustments namely flatteners steepeners and inversions. When combined with a change in the level of rates such adjustments create five standard yield curve twists bear flatteners bear steepeners bull flatteners bull steepeners and inverted yield curves. Bear curves indicate that the overall level of rates is higher than the initial curve while bull curves show a reduction in the level of rates. Flatteners decrease the difference between short-term and long-term yields which results in an overall flatter shape. Meanwhile steepeners widen this spread causing a steeper upward sloping curve. Inverted yield curves are characterized by shortterm yields that are greater than long-term yields and a subsequent downward slope in the curve. One way to design an environment for modeling is to mirror current market expectations for future rates. However because implied forward rates generally don t materialize and sound balance sheet strategy should not be based on rate forecasts it s important to understand the impacts of all types of market movements. Expectations for how performance and risk will be impacted by a non-parallel shift in rates can be boiled down to the balance sheet s asset and liability composition. Each financial instrument has a unique sensitivity profile that is influenced by its structure and cash flow s dependency on the interest rate environment. Balance sheets with significant exposure to embedded options such as call options (e.g. prepayments) caps and floors can experience substantial changes in 33 C R E D I T U N I O N B U S I N E S S value and price volatility depending on the type and magnitude of the twist modeled. It s important to also consider the impact to earnings and earnings volatility stemming from repricing risk. Instruments that are less complex may not show considerable price volatility but they can experience noticeable movement in average yields if their repricing reference rates are impacted in the modeled scenario. By simulating a variety of curve twists expected performance across balance sheet sectors becomes more transparent and this knowledge can be applied to future decision making and strategy development. While yield curve sensitivity analysis helps quantify changes in cash flow behavior pricing and earnings when rates move in a non-parallel fashion actual market environment changes are typically not that straightforward. Financial institutions should also assess the impact of other modeling adjustments such as changes in secondary spreads and deposit behavior modifications because real-life market movements typically incorporate a mix of factors. With a comprehensive understanding of balance sheet sensitivity to a variety of factors a financial institution will be well-equipped to adapt to any directional movement in market rates and to maximize its riskreturn tradeoffs. Brittany Rollek joined ALM First Financial Advisors in 2013. As a Director for the firm Ms. Rollek is primarily responsible for developing implementing and reviewing objective ALM and investment strategies for client financial institutions. Brittany proactively designs sensitivity analyses and scenarios to test client balance sheet exposure to various factors. Additionally Ms. Rollek formulates action plans to help optimize client performance within policy and risk tolerances. N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M BRA NC H BUSI NES S BY CHRIS HOWARD Leadership Team Development CUs that Learn Together Maximize Their Successes Credit union leaders are facing a more complicated future than ever before. Paving the way to a brighter tomorrow now requires a concentrated effort from the entire leadership team. And getting everyone on the same page is critical to success. Leadership Team Development can help rally the CU troops. Access to Callahan s unique webinars designed specifically for each client that reinforce key learnings and boost real-world applications and successes. In the Leadership Team Development program participants learn a new set of tools to meet the strategic challenges of a disruptive world and a rapidly evolving industry. Key learnings include how to avoid disruption create new growth opportunities and adopt a common language for framing problems and creating solutions. Today s credit unions need cross-functional leadership teams to develop the strategy that L eading a credit union into the future is tougher than ever before. As credit unions evolve it s not just about beating banks anymore. FinTechs and other disruptors threaten regulations grow more taxing member expectations continue to increase and credit union professionals are finding their jobs becoming ever more complex and challenging. That s what my colleagues and I hear from credit union leaders daily and it s why Callahan & Associates created the Leadership Team Development (LTD) Program. Our first course Disruptive Strategy with Clayton Christensen is offered in collaboration with HBX Harvard Business School s online learning initiative. Leadership Team Development exists in a unique market space blending executive education teambuilding and strategic consulting with the credit union perspective. The program offers numerous benefits and differentiators including The ability to learn together as a team and practice using those learnings on real strategic challenges that credit unions are facing today The convenience of participating anytime from anywhere with no travel or lost work time and 34 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M BRANCH BUSINESS tomorrow s success will require. But many new credit union executives are highly skilled specialists and often lack the experience in convergent decision-making that leadership teams need to operate smoothly effectively and efficiently. These are skills that have to be learned and practiced as a team. Adding to the management challenge is the nuance of the English language. The same words can mean different things to different people depending on their generation background and professional experience. As a result leaders too often think their team is in alignment only to discover they re using the same keywords in different ways or have different perspectives about what specific terminology means. These misalignments waste time money and goodwill and they can even destroy initiatives. At a time when credit unions need to be looking several years into the future strategic planning often remains operational. That s because leadership teams frequently lack the shared language and framework that good strategy demands. Leadership Team Development teaches credit unions how to overcome this shortfall with hands-on learning and application. Leadership Team Development combines theory with execution in the Callahan-facilitated webinars that are hosted several times throughout the course. This unique team-learning approach helps credit union executives transform their professional development from individual learning experiences to a collaborative dialogue with their peers. As a result strategic thinking and action move forward. The webinars help credit union teams listen and speak more carefully and understand each other more quickly consistently and actionably than before they took the course. These byproducts produce better decisions that are more broadly supported and effectively implemented. They also lead to greater real-world successes. The LTD program helps credit union leaders and their teams focus on the right fundamentals Your team needs a common language and framework for addressing your greatest challenges. Without them execution is a struggle and real strategy gets neglected. Your team members need to give effective counsel to the CEO and one another and they must use that process to converge on the best decisions not watered down consensus. This call to action challenges conventional wisdom about management and good office decorum but we ve learned that teams embracing this approach function at a higher level. Learn how to choose your definition of success. No credit union can be all things to all potential members. Strategy is in part the art of deciding what not to do and getting everyone on board with that decision. Keep your focus where it needs to be on members. Standard business tools don t always align well with this credit union imperative. Properly applied Professor Christensen s tools do. They can be immensely powerful offering actionable insight into how and why our members hire us. Understand the greatest threat to your sustainable success. Disruption is a powerful and challenging concept but it s often misunderstood. Knowing how it works can help credit unions make better strategic choices. 35 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M BRANCH BUSINESS TAB Leadership Team Development prepares credit union executives to address common and potential disruptions in a strategic manner and to lay the groundwork for sustainable future success. Unlike more traditional learning opportunities where select individuals go away and then try to bring lessons back to their colleagues Leadership Team Development works with the whole team at once so everyone learns the same things at the same time together without ever leaving the credit union. Program participants have said that the organizational structures and processes introduced in Disruptive Strategy and honed through the Callahanled webinars have already paid long-term dividends in their credit unions. Past LTD participants have noted three particular areas where their understandings and practices have improved They commit more time and resources to getting out of the office and into the community allowing them to better understand how their institutions are perceived how they add value and how their member-owners use (and depend on) their services. For several clients this insight has driven a wholesale reassessment of product sets as well as the product and service development process. They re rethinking their internal resource allocation process to reflect Professor Christensen s research findings. As a result they are better at adjusting for the normal dynamics that too often impede efficient and consistent usage of member-owned resources. A resource allocation process that is fully aligned with organizational values the strategic vision and the needs of member-owners delivers a measurable improvement in outcomes. They have a better understanding of the process and key elements of successful innovation. Professor Christensen s work shows that as 36 C R E D I T U N I O N B U S II N E S S B U S N E S S a task goal or program innovation fails to deliver on its promises. Successful innovation is an organizational and cultural phenomenon that is dependent on an emergent mindset of aggressive creativity and flexibility. Participants learn to balance this characterization with the traditional commitment to improvement in quality and efficiency that separates successful institutions from mere survivors. The default to steady but incremental improvement across all fronts drives today s success but it almost guarantees that tomorrow s opportunities will be missed. LTD participants understand how and why to balance the two. As an increasing number of credit unions participate in Callahan s Leadership Team Development program they re discovering that the lessons learned can help maximize their real-world successes. By working (and speaking) more effectively as a team utilizing a common framework considering the critical memberowner perspective and prioritizing strategy and innovation LTD is elevating the way credit unions do business. For more information on Callahan s LTD program or to register visit Callahan & Associates. Chris Howard senior vice president at Callahan & Associates is a respected credit union strategist and a leading industry voice who is continuously sought out for his insights. For more than 30 years Callahan & Associates has helped credit union leaders identify strategic growth opportunities that increase member value. Callahan creates meaningful dialogue connects people provides counsel and helps organizations thrive through competitive analytics bestpractice media leadership consulting and collaborative ventures. Learn more at 22 00 11 66 C U B U S I N E S S . C O M NN O VV EE M BB EE RR O M DIGI TA L TRA NS A C TIO NS BY CHUCK KLEIN CEO IMM The eTA on Driving Growth Defining eTransaction Automation T How does a credit union meet its growth objective goals while providing its members with the best possible experience Efficiency is the key to overcoming this conundrum. Electronic transaction automation solutions maximize the ability to accomplish both of a CU s main objectives. See how they can improve your credit union s processes. what were once long arduous processes. Electronic transaction (eTransaction) automation solutions such as eSignatures and electronic workflow technology can support credit unions in achieving maximum growth. At the same time they enable CUs to also provide a wide range of benefits that improve processes for members and credit union employees alike. With fully integrated eTransaction automation solutions credit unions can provide innovative options for their members that allow them to compete with the growing number of financial services providers. here is never going to be a single answer to what it takes for a credit to reach its growth objectives. Is the correct response delivering more innovative solutions Competing with the rising number of non-traditional lenders in the marketplace Facilitating effective account openings It s all of the above. Meeting these goals while also providing the best possible member experience however can be difficult. Today enhancing the member experience means not only ensuring that members have a variety of self-service options that allow them to complete a process where they re most comfortable whether that be in branch or from their home or office but also operating with greater efficiencies. When it comes to increasing member convenience technology certainly provides options to simplify Using eSignatures to make every process cost and time effective The costs of various credit union processes can quickly add up particularly when credit union employees find themselves constantly printing and shipping paper documents between branches and to members. These expenditures become an issue when the money and time spent on mailing and processing paper documents could instead be focused on providing optimal service experiences to members visiting a branch. Tucson Arizona-based Hughes Federal Credit Union was facing this exact problem manual paperbased lending processes meant that their express mail and front-office staff expenses were continuing to grow. However after implementing eSignatures from 37 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M DIGITAL TRANSACTIONS TAB IMM the credit union found that such implementation not only improved its loan closure rate but greatly simplified the loan process for members as well. Total loan processing time after implementing eSignatures dropped from several weeks to two hours. In addition the cost to facilitate signing paper loan documents dropped from 40 per loan using express mail options to 0 with remote digital signatures in place. Overall Hughes FCU experienced a calculated annualized cost savings of nearly 107 000. After seeing the cost savings associated with eSignatures deployment on lending documents the credit union expanded its use of the technology. By applying it across all member services and operations the cost savings and their associated return on investment amplified. Cutting expenses is paramount to reaching business goals but we cannot forget about the value of time especially for credit union members. It is likely that all members can recall a time in which they had to interrupt their busy day to visit a branch to sign documents for something. In today s world of online interactions and fast technology members especially Millennials view in-branch visits as a hassle and an intrusive inconvenience. Offering eSignatures however makes member transactions easy. It also allows members to securely sign documents whenever and wherever it is convenient without disrupting their day. Facilitating stronger online member service beginning with account openings As credit unions look to meet their growth initiatives they can start by evaluating the efficiency and ease of their account opening process. A convenient account opening process means enabling members to complete 38 C R E D I T U N I O N B U S II N E S S B U S N E S S the application online. Members do not want to just look at account options on a credit union s website. They expect to be able to start and finish the process then and there without needing to visit a branch along the way. Offering online account openings is an excellent self-service solution but as the functionality continues to gain popularity it is important to consider that this member-facing innovation can really only be as strong as the back-office environment supporting it. While back-office automation has traditionally been valuable in streamlining processes for existing members it is now vital for helping credit unions get more members in the door too. Last year EFCU Financial Federal Credit Union expanded its use of IMM s eTransaction automation solutions with a goal in mind to simplify and reduce the costs associated with online account openings. Online and now mobile account opening options are a growing trend and with the right technology EFCU Financial was able to capitalize on the opportunity to create a simpler more convenient application process for its members. With IMM s technology the credit union easily created and deployed electronic forms specifically for online applications that use knowledge-based authentication to verify applicants identities. As a result the credit union reported a 30 percent increase in new account applications received. EFCU Financial has seen additional benefits of online forms beyond the account opening process. Electronic forms have enabled the credit union to bring new online services to market more quickly. For example EFCU Financial s website allows members to request products and services online routing them 22 00 11 66 C U B U S I N E S S . C O M NN O VV EE M BB EE RR O M DIGITAL TRANSACTIONS TAB to unique landing pages with pertinent information while notifying staff of each request. These forms each branded with EFCU Financial s logo have also proved valuable marketing tools. Increasing consistency and efficiency in member lending In addition to helping facilitate the online account opening process eTransaction automation solutions can transform a credit union s consumer lending offerings ensuring that these member services are just as dependable as they are fast. A credit union s success heavily depends upon maintaining a strong loan portfolio. In order to maintain such a portfolio members must feel as though their credit union provides options that are just as convenient and efficient as those of the rising number of non-traditional lenders in the market. Just as we have seen with account openings and signing experiences across the board eTransaction automation solutions can greatly improve the lending process from origination to adjustments down the line. Take Mississippi-based Mutual Credit Union for example. With the aim of accelerating loan transactions the credit union implemented IMM s eSignatures and eWorkflow technology. After deploying the technology the credit union s annual audit uncovered zero loan document exception items down from nearly 100 exception items just three years prior. Mutual Credit Union significantly decreased its loan completion time by as much as 75 percent in some instances. Transactions that previously took days could be completed in minutes most importantly they could also be completed more consistently and accurately across branches. The impact of eTransaction automation solutions doesn t benefit only the credit union. Members receive the fast convenient experience they desire in today s technology-driven world. Simultaneously the hassle of going to their credit union s branch just to sign a few documents is removed. From auto loans to mortgages credit unions can save paper time and valuable resources by switching from a manual process to one supported by digital counterparts that streamline back39 C R E D I T U N I O N B U S II N E S S B U S N E S S office processes and allow credit unions to complete transactions faster. At the end of the day a credit union s success depends upon a wide range of factors. However deploying technology that solves a variety of challenges and can be adopted across all departments in the credit union will facilitate dramatic change. Implementing eTransaction automation frees up valuable resources and allows credit unions to reallocate them to better maximize their opportunity for growth. The time and cost savings associated with eTransaction automation make for a wide array of possibilities that transform business operations. From a boost in the credit union s performance to bettering the quality of member services eTransaction automation solutions play a large role in easing common pain points. Everything from onboarding to expanding product offerings with current members is facilitated. And after all providing the best member experience is paramount. Chuck Klein is CEO of Rahway New Jerseybased IMM and has more than 40 years of management experience in business and finance administration. Prior to founding IMM Chuck was the managing partner of ASB Systems a computer service bureau providing service to commercial and retail companies across the country. NN O VV EE M BB EE RR O M 22 00 11 66 C U B U S I N E S S . C O M MO RTG A G E L ENDING BY TANDY VINCENT Thinking for the Future How Credit Unions Can Create a Strong Mortgage Pipeline in the Midst of Today s Hot Refi Market R Is your credit union equipped to thrive after the pending refi bubble burst Implementing scientifically-proven marketing strategies can allow CUs to win their members loan business. It can also enable them to build a sustainable mortgage pipeline for years to come. These four steps will have you flourishing in no time. to find a mortgage. But not to worry there is a way to balance both. eal estate is hotter than ever. Both purchase mortgages and refinance activity are on the rise and credit unions are firing on all cylinders to keep up with the pace. But how do you balance your efforts in the now without losing sight of a healthy mortgage pipeline for later I ve encountered a great many CU executives whose hands are so full with refis that they find it all but impossible to focus on a plan that keeps their purchase mortgage pipeline arguably the more valuable of the two long and strong. It s difficult enough to see beyond next week much less next month or even more importantly six months from now. This is a critical misstep for two reasons. First refis won t keep CUs busy forever. While there has been a slight increase in refinance loans due to lower interest rates this rise is not expected to hold. The larger trend as measured by Mortgage Bankers Association shows that refi loans have dropped dramatically since mid2013. And this trend is not expected to change. Secondly while the refi purchase path is fairly quick and succinct the journey of a homebuyer is quite lengthy and task-driven. Failing to engage with homebuyers early in the process means they are less likely to be in your pipeline later when they are ready 40 C R E D I T U N I O N B U S I N E S S Managing the Nows while Engaging the Laters Credit unions can avoid a drop in business when refi loans disappear by aligning their marketing efforts to match the journey of the homebuyer. The first step is to realize that while your loan staff may be inundated with refi applications that need their time now your marketing team can help you drive your pipeline by engaging buyers who are just entering the market or will enter the market later. Developing a funnel to identify and connect with these future home-buying members leads that won t require your loan officer s immediate time or attention until later ensures you will have a healthy pipeline of closings even after the refi bubble is gone. But how Since 2001 CU Realty has been working with hundreds of credit unions throughout the USA to help their members buy and sell real estate all while capturing and analyzing homebuyer behaviors along with their impact on the purchase mortgage landscape. We ve watched some of the nation s largest and most innovative credit unions grow their pipeline 2 0 1 6 C U B U S I N E S S . C O M N O V E M B E R MORTGAGE LENDING TAB from hundreds of leads to thousands by making small changes in their approach to marketing. The good news is that our research is not a secret. We ve put it all into one comprehensive eBook titled Mapping the Home Buyer Journey which breaks the journey into four key steps. Plan in Action What Success Looks Like While there are opportunities to build relationships with your members at each step credit unions that engage with buyers and sellers from start to finish are more likely to close the loan. Our eBook presents the science behind the model and illustrates how members who begin a home search with their credit union typically close their loan with the CU too. In fact when members used our turnkey real estate program HomeAdvantage to purchase their home more than 80 percent stayed with the credit union for their loan. This is a direct result of getting to the buyers early and becoming their first point of contact. The HomeAdvantage program has helped CUs do this by reaching members before they have an agent or financing. One of our partner credit unions Apple Federal Credit Union in Fairfax Virginia has reaped the benefits of this strategy. We know that we are capturing members early in their home-buying process said Rob Drake Apple s mortgage origination manager. Build a Purchase Mortgage Pipeline by Helping Members through Four Key Steps. There are four significant steps in a homebuyer s quest that every credit union should leverage 1. Property Search Most buyers start their search on their own using the Internet. This is the entertainment phase of home buying and selling. Smart lenders use web-based real estate listings to attract members who are kicking the tires in real estate. 2. Education As buyers and sellers become more serious in their search they actively seek knowledge on how to make the most of their transaction. Credit unions that provide resources to equip members with the real estate information they need open a door of communication. Then the opportunity to help the member find the best loan will naturally present itself. 3. Agent Referral More than half of buyers find their agent through a friend neighbor or colleague. By creating a local network of real estate agents to which they can refer eager buyers and sellers CUs can be confident that the agents will keep them at the forefront of their members minds. 4. Mortgage Application Credit unions can ensure pull-through by offering services that keep the member attached to their brand including cash rewards and discounts at closing. 41 C R E D I T U N I O N B U S II N E S S B U S N E S S NN O VV EE M BB EE RR O M 22 00 11 66 C U B U S I N E S S . C O M MORTGAGE LENDING Our goal is to identify buyers and quickly get them referred to an agent because when members use our preferred agents we know the majority of them will close their loan with us. The 2 billion credit union experienced a big boost when it recently launched a new marketing campaign that informed its members about HomeAdvantage s newly enhanced property search tools. Within just a month the CU generated 200 new registrations a 1 000 percent jump in its monthly average. The HomeAdvantage program essentially provided us with a roadmap said Drake that allowed us to anticipate our members real estate needs and helped open the door to earn their purchase mortgage business. As a result of the map Apple FCU now has a consistent pipeline of hot leads from buyers looking to purchase in the next few months. early is critical to accomplishing our goal of growing our mortgage pipeline. A Scientific Approach to Balance and Sustained Success What would a 1 000 percent increase in your purchase mortgage pipeline mean for your CU over the next 12 months What would it mean over the next 24 months These are important questions to consider because the answers could open doors to improved member relations profitability and overall financial solvency. The success these credit unions have experienced and continue to experience didn t happen accidentally. It is the result of a scientific approach that manages the needs of the now mortgages and at the same time carves out time to develop a robust pipeline of later mortgages. Are you targeting 2017 as a year of big growth for your CU s purchase mortgage department If so you ll want to download our eBook. Mapping the Home Buyer Journey How Credit Unions Can Attract More Buyers and Win More Loans will help you start leveraging buyers predictable behaviors to develop a sustainable purchase mortgage pipeline. Download the eBook at journey. Tandy Vincent is the director of marketing for CU Realty Services. She has more than 20 years of marketing and sales experience in a variety of markets including hightech and real estate. She joined CU Realty in 2004 where she focuses on driving awareness engagement and momentum for the CUSO. Her number one goal has been to educate credit unions on the impact real estate advocacy can have on their purchase mortgage growth strategies. Tandy graduated from Louisiana State University after majoring in marketing and public relations. She resides in Arizona where CU Realty Services is headquartered. 42 Identifying Homebuyers Early Traditionally we have seen mortgage lenders aim their marketing efforts using rates and discounts toward serious buyers who are looking to purchase a home now. But savvy credit unions are focusing on having real estate related conversations with buyers who will be looking later. This mindset allows the CU to reach buyers early become the first point of contact before they find another lender and fill their pipeline with members looking to buy homes six to 18 months or more from now. Schools Financial Credit Union in Sacramento California embraced this approach and expanded its mortgage pipeline by 100 leads in two months. Illinoisbased Consumers Credit Union (CCU) was also able to get to buyers before anyone else and increased its mortgage pipeline by more than 100 leads in just a little more than a month. Schools director of mortgage lending Gil Chavez said the marked response was more than he imagined. The biggest thing I value about this program is that we re getting to these buyers early said Chavez. Most of our new registrations don t have an agent or financing set up. Reaching them C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M THEY SAY... TIME is We give you more of both. Cummins Allison branch automation technologies have helped thousands of FIs become more ef cient. Our reliable cash coin check and ATM solutions move low-value deposit and cash handling transactions away from your tellers reducing operating costs and improving staff performance. Your branches are more productive and pro table and your customers get a better experience. Simple yet effective branch automation technologies from Cummins Allison add to your bottom line and allow your staff to focus on what matters most more meaningful engagement with customers. MONEY. automation GET MORE AT CU WEB OPS BY MARYABIGAIL DILLS Selecting a Digital Project Vendor O Your credit union has an incredible vision for a digital project. But now comes the hard part finding a vendor that can breathe full life into that vision. These tools will help ensure the vendor you select won t necessitate CPR on your project down the road. should also include a note about whether your project goal is to do a facelift of a current system or website or if it s to completely re-build. How do you want to verbally communicate your brand How do you want to visually display your brand Understanding how you speak about and display your brand to your target audiences gives you a high level of brand awareness that is critical when bringing a new vendor into your inner circle. Being able to communicate your vision for the future of your brand will help your new vendor acclimate to your way of approaching your business. In turn it will make it easier for the vendor to approach the brand in the same way as well. How do you imagine the project going Before involving a vendor in your project you should have an idea of what the planning execution and final result of your project should look like. Giving a clear explanation of these expectations in advance will make sure everyone is capable and poised to execute. ne of the most important parts of launching a digital project is selecting a vendor to execute the vision you have for it. When Solarity Credit Union decided to undertake our large website project we took great care in choosing a vendor that aligned with all of our expectations and values. We want to help give you the tools to select a vendor that you will be thrilled with. Here we will share with you the pre-work request for proposal (or RFP) communication and selection processes we followed to achieve our digital project goals. Vendor Selection Pre-Work For the pre-work phase of our vendor selection process we primarily asked ourselves questions around our goals and strategic vision. What are your project goals The first step in being able to effectively communicate and execute your project is understanding your goals and what success looks like for you. This stage Sending an RFP Write out a detailed overview of your digital project plan in an extensive request for proposal (or RFP). When creating this RFP for our website project we were sure to be clear about our process and end goals as discussed above. We also included details about our needs and wants for our new website. In return we required proposals to include clear pricing 44 C R E D I T U N I O N B U S I N E S S N O V E M B E R 2 0 1 6 C U B U S I N E S S . C O M CU WEBB TAB OPS a detailed view of each vendor s corporate culture and an explanation of how they would execute on our project plan to enhance our digital vision and portfolio. These requests were extended to our primary digital platform and design vendor as well as to secondary vendors for desired functionality. Such functionality included Online scheduling forms Live Chat ATM Locator plugin vendor that was organized and able to manage all the moving parts while accommodating our timeline requirements. Strong design team While the design team was not our top priority a user-friendly design was a critical component in the user acceptance phase of our implementation. We knew that if the structure and navigation of the site were poor a good design would not overcome those issues. However design was still an important factor for us. Working through the Proposals Once you receive all the proposals you ll need to create a scoring system to sift through the options and select your top contenders. During our website vendor selection process we used the following criteria to grade and rank our vendor proposals Strong capabilities to help deliver content This criterion was absolutely crucial to us because we wanted our new website to consist of 100 percent new content. So we needed a partner that was able to truly understand our brand vision and do the heavy lifting when it came to content creation. Strong development team and the ability to create custom capabilities and platform We decided we did not want a vendor that utilized a templatized approach for which we would have to alter our content to accommodate. While such customization generally will cost more we felt that what we wanted to accomplish would require this type of capability. Open-source content management system (CMS) We wanted to have a platform that was opensource but also well established and that had had time to develop. That way we would have the flexibility we were looking for long term. A clear project process roles and timeline We wanted a vendor that had the experience required to execute a really solid project process roles and timeline. We had aggressive goals for the timeline for our website completion so we needed a 45 C R E D I T U N I O N B U S II N E S S B U S N E S S Making Your Final Decision There are a few determinations you need to make when choosing a vendor to hire for your digital project. When we were launching our website we determined three primary criteria for selecting our eventual winning vendor a good cultural fit a good delivery fit and a good budgetary fit. Culture A cultural fit is one of the most important criteria when selecting the perfect vendor for your company. In many ways hiring a vendor is like hiring a full-time employee. You should always be methodical in your hiring process investing time in finding the right partner just as you would someone who works at your company full time. You know what they say hire hard manage easy. NN O VV EE M BB EE RR O M 22 00 11 66 C U B U S I N E S S . C O M CU TABWEB OPS If you have heard good things about a vendor but they don t click with your team during the RFP presentation then they will not be a seamless fit over time. When members of a team align to your core values and culture they will be far more productive and creative. Don t be afraid to bring this matter up and discuss it during the vendor selection process. Delivery Another critical component of vendor selection is ensuring that on a skillset level your vendor is capable of delivering your digital project on time on budget and on value. That means that they will complete your project within the allowed timeframe at or under the budget you have worked together to set and they will meet or exceed your expectations based on the requirements you ve provided to them. Budget During our website project we started both the RFP process and the interview process with an open mind about budget. We didn t want to restrict ourselves and potentially miss out on a relationship with the right vendor by being too restrictive with our budgetary guidelines. If you have a number that you absolutely cannot exceed bring it to the table right away. It is also a good idea to keep in mind that the majority of digital projects in particular website projects typically exceed their initial budget by around 20 percent. When discussing budget with your vendor be sure to discuss whether the estimate they have provided includes the cost of photos and other new digital materials unlimited editing rounds testing reviews etc. In short be sure that you know what your inclusions and exclusions are and ensure that your vendor truly understands the full scope of your project. Finding the perfect fit when it comes to a digital project vendor can be extremely challenging. Given the vast number of options and the variables involved it can be a grueling and lengthy process. Take your time with the selection process as it is likely the most difficult and important decision you will make. What s more it has the ability to determine the success or failure of your project. We are hopeful that these tips tricks and advice will help you choose the perfect vendor for your project MaryAbigail Dills VP of Marketing Solarity Credit Union 46 C R E D I T U N I O N B U S II N E S S B U S N E S S NN O VV EE M BB EE RR O M 22 00 11 66 C U B U S I N E S S . C O M Editorial Calendar 2017 Editorial Closing Dates 30 Days Prior To Publishing Money January February March April May June July August September October November December Payments Credit Debit Cards Car Wars Auto Lending Mortgage Lending Mobile Banking Security Branch Business CUSOs Executive Hiring & Compensation Auto Lending & Lleasing 2 Mortgage Lending 2 Payments 2 Business Lending THE ONLY A LL-D I G I TA L A LL-B U S I NE SS RE SOURCE F OR CRE DIT UNIONS