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TH E O NLY A L L -DIGITA L A LL - BU S INES S R ES O UR C E F OR CR E DI T UNIO NS T H E P AY M E N T S I S S U E MASTERS OF INNOVATION INTRODUCING JANUARY 2017 VOLUME 12 ISSUE 1 CLINTON KOKER CU Business s Newest Editorial All Stars KNG & Company Inc. JERRY P. NELSON JOHN GREGOIRE Fill In The Blanks & Prosper THE ONLY ALL-DIGITAL ALL-BUSINESS RESOURCE FOR CREDIT UNIONS Empower your credit union with the Team Builder Subscription program Unlimited members Introductory discount SVP 100% Guarantee CMO COMPLIANCE TRAINING COO CLO PRESIDENT & CEO CFO COMPLIANCE AVP BRANCH OPERATIONS AVP ACCOUNTING BRANCH MANAGERS EXECUTIVE ASSISTANTS AVP ECOMMERCE AVP LOAN PORTFOLIO RISK Sign up your entire crew for Team Builder here to Assets RATES According 1 BILLION 500 YEAR 400 per 100 MILLION 300 YEAR UP TO year with 20% introductory discount Help 101 MILLIONunion grow for your members your credit - 999 MILLION 400 YEAR employees and community Each member receives UNLIMITED MEMBERSHIPS Monthly eMagazine AT ALL LEVELS. 2 Articles targeted to member by title 12 most current articles CFO Currency Lending Solutions Marketing Matters Branch Business etc. Full access the CUB website and issue archives Create miracles for your community 10% of each subscriptions proceeds benefit the Children s Miracle Network . Check website for details of program 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 GOVERNANCE John Gregoire CFO CURRENCY Hafizan Hamzah LEADERSHIP Jim Bouchard TECHNOLOGY Michelle Harbinak Shapiro BRANCH BUSINESS Kaitlin Morrison BRANCH BUSINESS Meredith Deen MARKETING MATTERS Kevin Flanagan MARKETING MATTERS Eva LaMere MEMBER BUSINESS LENDING Ken Hayes PAYMENTS Bill Prichard LENDING SOLUTIONS Bill Hulstrand CU ADVERTISING Scott Wilson CU TRAINING Kenneth C. Bator 4 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M 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 https 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 TABLE OF CONTENTS JANUARY 2017 VOLUME 12 ISSUE 1 TAB THE ONLY ALL-DIGITAL ALL-BUSINESS RESOURCE FOR CREDIT UNIONS 6 8 12 15 17 20 UP F RONT Title 33 MEMB ER B U S I N ES S LEN D I N G Tim O Hara GOVERN ANCE Is Your Credit Union Balancing Increased Lending with the Resulting Increased Bad Debt Here is the Best of Both Worlds... Ken Hayes Strong Board CEO Relationships Keys to Credit Union Success John Gregoire CF O CURRENCY 36 39 43 46 PAYMEN TS Two Ways to Hedge Mortgage Servicing Rights Hafizan Hamzah LEADERS HIP Jim Bouchard T ECHNOLOGY Fueled By Economic Growth Auto Sales Expected To Stay Strong In 2017 Bill Prichard LEN D I N G S O L U TI O N S Celebrate Uncertainty What to Do When the Credit Score Sends a Mixed Message Bill Hulstrand C U A D VERTI S I N G Top 5 Enterprise Tech Trends to Watch in 2017 Michelle Harbinak Shapiro BRANC H BUSINE SS Debunking Common Myths in Digital Advertising Scott Wilson C U TR A I N I N G Virtual Tellers Two Managers Tell Us How They Keep Branches Personal Kaitlin Morrison REACH for More in 2017 Kenneth C. Bator 23 27 30 BRANC H BUSINE SS Branch Of The Future The Traditional Office Will Be In The Mix Meredith Deen MARKET ING M AT TERS Millennials An Untapped Goldmine for Credit Unions Kevin Flanagan MARKET ING M AT TERS Amp Up Your Mobile Site To Boost Member Conversions Eva LaMere 5 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M UP FRONT BY TIM O HARA It just gets better and better O nce you ve published an industry trade magazine for a number of years somehow it just seems to get better on its own All it takes is a whole lot of sleepless nights and really hard work. I launched Credit Union BUSINESS 12 years ago and I ve enjoyed 144 straight months of the abovementioned bliss. Now I find that industry leaders I once chased after are beginning to call me. Ah the sweet smell of success Case in point I ve known about John Gregoire for my entire credit union career. Over the years I ve come to recognize him as a CU industry leader with a long list of accomplishments including being instrumental in the formation of the CUNA councils. A few months ago Amy Rapp CEO and Founder of introduced John to me to discuss some ideas for collaboration between our companies. (You will soon receive some exciting news about VirtualCorps and CUB s future partnership.) That brief conversation with John Gregoire soon led to an introduction to his partners in KNG & Co. Inc. Clinton Koker and Jerry Nelson. Together these three leading CU consultants specialize in executive compensation CEO evaluation executive succession salary administration and employee performance for many of the best known credit unions. They have many years of hands-on education and consultation among them and they will add a considerable knowledge base to our editorial product at CU BUSINESS magazine. You can read John s initial article a few pages from right here. It s titled Strong Board CEO Relationships Keys to Credit Union Success and it s full of terrific ideas for CEOs and board members to consider. Clinton Koker Jerry P. Nelson and John Gregoire of KNG & Co. The leaders of KNG & Co. are the newest on the growing list of CU BUSINESS All Stars. They share best practice ideas and suggestions with our fast growing information source for the entire credit union team Whether you are the chief executive officer or you work in finance lending marketing technology training or compliance 2017 holds much exciting in store for you as a Credit Union BUSINESS subscriber and reader. Take a look at our new Team Builder pricing on page 2. Sign up today and we ll begin sending you specific information for specific job functions right away. Thanks for reading Tim 6 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M Experience the Power of Plus. Let Advisors Plus guide your path to optimization and growth. The Power of Problem Solving The Power of Potential The Power of Profit With 200 years of industry experience our consultants have been there fixed that. We combine experience with analytics to identify high-impact growth opportunities. We create high-ROI results you can take straight to the bottom line. The Power of Partnership Our team works with your team on products and marketing to delight your members. Bring your credit union to the Plus side Call 727.299.2535 or visit us at GOV E R NA NC E BY JOHN GREGOIRE Strong Board CEO Relationships Keys to Credit Union Success Without a great leader your credit union is doomed to ungreatness. And a CU s Board members are instrumental players in ensuring outstanding leadership. With a focus on CEO evaluation this first in a three-part series reveals proven methods that will help you and your Board build a stellar leadership team. hat is the difference between credit unions that succeed tremendously and those that merely exist The answer in all cases is leadership. Think of credit unions that have weathered financial storms change of sponsor employment disruptions. Once you have that list you will find one common denominator a strong CEO and an informed engaged Board of Directors. Hiring and inspiring a great CEO is job number one for any Board. Interestingly there is an appalling lack of training on this important subject for credit union Board members. This article is the first of a three-part series dedicated to strengthening credit unions through proven methods of building great leadership teams. We believe that a Board s ability to recruit retain and inspire great CEOs is the most important contribution it can make to its credit union. The series will focus on three key issues CEO evaluation CEO compensation and CEO succession plan recruiting. W John Gregoire The CEO Evaluation In our experience the CEO evaluation is a consistently weak part of the credit union Board CEO relationship. CEOs we have interviewed have told us candidly but unfortunately often anonymously that they lack a clear understanding of their Board s perspective of 8 C R E D I T U N I O N B U S I N E S S their performance. In some cases there is a reasonable scorecard with very quantifiable measures. In nearly all cases however the more subjective issues such as Board relations community impact and leadership are left largely to conjecture. Experts in the field have concluded that Organizational performance will over time deteriorate without clear communication between the Board and the CEO on these (see above) issues. So how do Boards ensure that this gap is corrected in their credit union The first article in our series 2 0 1 7 C U B U S I N E S S . C O M J A N U A R Y THEY SAY... TIME is We give you more of both. Cummins Allison branch automation technologies have helped thousands of FIs become more efficient. 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 profitable 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 GOVERNANCE will detail methods to make certain that your organization excels in this key skill. Most if not all Boards understand that their only employee is the CEO. It is through the CEO that all credit union operations are delegated. This may seem like a basic and simple proposition however there are libraries full of books on the art of delegation. The extent of delegation and performance is most clearly described in the CEO evaluation review. Ask any HR expert and they will say that one of their biggest challenges is the performance review. Many in management consider this task a necessary evil and a departure from their daily tasks. This is true even where the distinction between responsibility and performance is clear such as the CFO evaluating the Accounting Manager. Imagine how much more complex and therefore difficult it is for seven or nine individuals with varying backgrounds which are normally inconsistent with running a not-for-profit financial institution to provide clear perspective on the performance of a CEO. In order to accurately grade a CEO s performance the Board members must have a strong understanding of the organizational focus and strategies. They must also have a firm grasp of the credit union s performance against peers to provide perspective on how well the credit union is actually performing. Many Boards assess performance primarily against budget. Without a peer comparison most Boards are unlikely TURN ON YOUR CFO and CEO 4 CFO withTEAMBUILDER. CURRENCY 10 C R E D I T U N I O N B U S I N E S S teambuilder buy to have the experience necessary to determine whether the budget was overly conservative or represented a real organizational stretch to achieve. For example one organizational target may be ROA. The goal may have been set at 0.75. The credit union may have achieved a 0.54 result which would appear to be sub-standard performance. As the recent recession demonstrated however the economic environment may change quickly largely impacting the credit union s ability to reach previously set goals. In this example the peer performance may have averaged 0.24 ROA. This would be an indication that the credit union significantly outperformed its peers. Achieving a 0.54 ROA probably required management decisions and performance that would be bonus worthy. Contrarily the economy may have been booming. Peers may have performed at an average 0.89 ROA. In this case the credit union seems to have under-performed its peers. It would be incumbent on the CEO to provide rationale for the 0.54 performance. This is where strategies specific to a credit union may come in to play. For example if you decided to engage on an aggressive building project hire additional staff in advance of a new strategy or put away additional capital to buffer the impact of a significant SEG or sponsor s potential decline the 0.54 performance is clearly appropriate. The same dynamics apply to most credit union metrics. That is why Board orientation and training should include a clear understanding of the organization s primary strategy and performance metrics. Beyond quantifiable organizational performance metrics the CEO should be evaluated on Board relations as well as leadership and external relations with the credit union s membership and community and with the credit union community including regulators. This assessment is usually more subjective and even more difficult for Board members. There are a number of methods to provide substance to this task. We will cover those options in our next article. 2 0 1 7 C U B U S I N E S S . C O M J A N U A R Y GOVERNANCE John P. Gregoire is a partner in Koker Nelson and Gregoire (KNG) a consulting firm dedicated to executive compensation succession planning and performance management in credit unions. With more than forty years of experience in the financial services industry and having held senior management positions in state and national trade associations and credit unions his is a broad-based perspective reaching to board governance team leadership CEO appraisal score carding succession planning mergers and the alignment between executive compensation and organizational strategy. John also founded the ProCon Group Ltd. now in its twentieth year of serving a client base comprising over forty percent of credit unions with a billion dollars or more in assets. A founding member of the Filene Research Institute he was instrumental in the development and publishing of the report on Board Responsibilities and Work Styles in Effective Credit Unions. He has authored a variety of articles on strategy the balanced scorecard and governance. John earned his master s degree in management from the Claremont Graduate School Peter B. Drucker School of Management Program working directly with Drucker on topics of executive management. He is a former board member of the National Credit Union Foundation. You can reach John at 608-239-3449 or John.Gregoire 11 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M CFO C UR R E N CY BY HAFIZAN HAMZAH Two Ways to Hedge Mortgage Servicing Rights Does your credit union service mortgage loans If so you re probably familiar with the price volatility involved with mortgage servicing rights assets. But such temperamental tendencies need not deter your CU from heavily involving itself in mortgage banking. These two approaches will help you hedge your MSR bets. byproduct of focusing on single-family mortgage originations is often creating mortgage servicing rights (MSR) assets as the mortgages are sold to other parties. An MSR asset is the right to service mortgage loans even if they are not held on the balance sheet in exchange for a fee agreed upon at sale. For institutions with competitive advantages in servicing mortgages MSR assets can offer significant returns on capital. Even with small changes in interest rates MSRs can show a significant amount of price volatility depending on the current level of rates. For example if rates are a lot higher than the mortgage s coupon A small changes away from that level have little impact on the asset. That is because they are often among the most volatile assets on the balance sheet. The Basel Committee clearly recognizes this risk with its Basel III final ruling which assigns MSR assets a 250 percent risk weighting. The inherent price volatility of MSR assets makes hedging considerations very important for institutions that are heavily involved in mortgage banking. Why are MSR assets so volatile To understand this volatility MSRs can be compared to interest-only (IO) strips on mortgage bonds which entitle their owners to receive the interest portion of the underlying bond s payments. Like IOs MSR assets entitle the institution to a stream of servicing fees over the life of the underlying mortgages and the longer the life the better. Falling interest rates (and increasing prepayment speeds) are very punitive to an IO s price due to the income stream s shortening with no offsetting principal effect. Like most mortgage bonds MSRs also tend to exhibit negative convexity. This means as interest rates decline the value of the asset also declines at an increasing rate. 12 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M CFO CURRENCY TAB Exhibit 1 represents an example MSR portfolio with a base market value of 26 million. When examining the simulated price movements it s clear there is significant potential for price volatility. In a down 100 basis point (bps) interest-rate shift the asset loses almost 15 million or over half its value. The up 100 bps rate shift results in a much smaller magnitude increase in value of roughly 7 million hence the negative convexity. Exhibit 2 displays the simulated price of an interest rate floor which has a higher gain than loss given equal movements in interest rates. Static hedging approaches tend to focus on hedging both delta (duration) and convexity risk which protects investors against large increases in interest rate volatility. However this strategy comes at a cost because positive convexity tends to command a market premium. Floor MSR Asset Market Value Sensitivity ( 000 s) 10 000 5 000 (5 000) (10 000) (15 000) -100 -90 -80 -70 -60 -50 -40 -30 -20 -10 Base 10 20 30 40 50 60 70 80 90 100 6.00 5.00 4.00 3.00 2.00 1.00 0.00 -1.00 -2.00 -3.00 -4.00 Option Premium Interest Rate Shock Interest Rate Shock Two approaches to hedging To hedge the market value sensitivity of the asset institutions can follow one of two typical hedging approaches static or dynamic. Under a static approach managers typically use option contracts and hold them until expiration. Specifically regarding an MSR asset typical hedging instruments are call options on Treasury note futures or interest rate floors. Both options gain in value as interest rates fall thus offsetting the decline experienced by the MSR asset. The positive convexity that options prices exhibit is one of their advantages. That means the position rebalances itself as interest rates fluctuate hence the term static. The options gain in value at an increasing rate at the same time the MSR asset s decline is accelerating. A dynamic hedging approach in contrast focuses mainly on hedging delta and duration risk (i.e. linear price risk). For hedging an MSR asset the approach would typically involve rebalancing a combination of Treasury note futures and mortgage-backed securities prompted either by an updated sensitivity profile or a predetermined change in interest rates. Rebalances are usually done when interest rates move outside a predetermined corridor 20 bps or 25 bps moves are common. Increased rebalancing frequency tends to increase hedge effectiveness but at an increased cost. Under this approach a manager is essentially replicating the market value sensitivity of an option by increasing or reducing exposure as interest rates fluctuate. In periods of low realized volatility dynamic strategies tend to outperform static ones since managers don t realize the costs associated with rebalancing. Additionally those who bought options paid for convexity protection that wasn t needed. 13 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M CFO CURRENCY Exhibit 3 shows an example of dynamically hedging an MSR asset. The net line plainly shows a reduction in the volatility of the MSR asset since the line is much flatter than that of the asset. Dynamic Strategy 15 000 10 000 5 000 (5 000) (10 000) (15 000) (20 000) -100 -90 -80 -70 -60 -50 -40 -30 -20 -10 Base 10 20 30 40 50 60 70 80 90 100 MV Sens. ( 000 s) Hedging strategies can be very complex and operationally intensive because they require frequent monitoring and maintenance of sophisticated trading models. This tendency may explain why some institutions decide not to undertake such activity. However hedging MSR assets can be profitable over the long run. When performed effectively hedging can offer significantly higher risk-adjusted returns on capital which helps an institution achieve a sustainable competitive advantage within the mortgage banking business. Hafizan Hamzah is a director in the Investment Management Group at ALM First. ALM First Financial Advisors LLC provides asset-liability management investment management hedging services and other strategic and financial services for over 200 financial institutions across the United States. Mr. Hamzah can be contacted at HHamzah The Investment Management Group can be contacted at IMG Interest Rate Shock Hedge MSR NET Because risk managers are evaluated not only on their risk mitigation but also on their ability to control costs it s important to note that a disciplined and rigorous dynamic hedging process typically outperforms a static approach in terms of costs to hedge. With 20 billion of investments under management ALM First is an SEC-registered investment advisor acting as an unbiased third party offering commission-free fee-based services to over 200 financial institutions across the country. Services include Asset Liability Management Investment Advisory Merger Valuations Hedging with Derivatives Loan Profitability Analysis ALM Validations Investment Portfolio Analysis MSR Valuations Training and Education and more... 800-752-4628 14 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M L EA D E R SH I P BY JIM BOUCHARD Celebrate Uncertainty If there is one thing that s certain for credit union leaders it s that they will encounter uncertainty. It s okay to view uncertain situations as a challenge but don t allow them to breed fear and degrade your organization. These courageous touchpoints will help keep your CU out of the fear zone. O ne of the defining strategies we focus on in the book The Sensei Leader is Be flexible adaptable and comfortable with uncertainty. The mark of an effective leader is the ability to deal with uncertainty. For aspiring leaders your ability to deal with uncertainty is an important factor that can determine your current and future opportunities. Credit union people all over the country tell me thatthis (handling uncertainty) is one of their greatest trials. Challenges like rapidly changing regulation external competition the need to swiftly develop new leaders and quickly evolving cultures make uncertainty an ever-present problem. The issue is that as our need to deal with uncertainty becomes ever more important our ability to do so is in grave danger Let s keep this simple. Without delving into to a complicated psychological explanation suffice it to say that we all face uncertainty and uncertainty breeds fear. Fear in turn stifles innovation and creativity. Fear leads to crippling inertia jealousy lack of communication and any number of other caustic agents that degrade an organization s health. The antidote to fear is courage. We spend a great deal of time in our workshops discussing courage. (For the sake of time I ll keep this short.) Courage is certainly not the absence of fear. The absence of fear is stupidity 15 C R E D I T U N I O N B U S I N E S S Courage is your ability to face your fear and do what needs doing anyway. Fear is in fact an essential survival mechanism. Fear is a perfectly rational response to uncertainty. Fear is what keeps us from doing foolish things when the outcome is not clear. But we can t let fear keep us from taking calculated risks that are necessary to progress and from persevering through any period of extreme uncertainty. J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M LEADERSHIP Courage is the Antidote to Fear. Courage is the quality that allows us to face and overcome uncertainty. So how do we develop and cultivate courage And can courage be trained Yes but not directly. Courage is the result of confidence. True confidence is the product of training and preparation. So the formula is this simple If you want to deal better with uncertainty you need courage. Courage is an expression of confidence. You develop confidence through training and preparation. Please note one important point. Confidence is NOT surety of a particular outcome. If your confidence depends on an outcome what happens when you fail How do you feel when you come up short or when the situation changes No matter how hard you train you cannot guarantee any outcome with absolute certainty. All you can guarantee is that you did your best to train for this fight. What you can do is step into the ring with the absolute certainty that you deserve to be here. A leader just like a good fighter develops confidence and courage by exposing him- or herself to ever-greater challenges. You start small you punch your weight. As you get better and more confident you take on better and better opponents. It s the same in leadership. And this means that as established leaders we have to provide aspiring leaders with the opportunity to face uncertainty early and often. At first expose your new leaders to manageable challenges. As they prove themselves give them opportunities to face greater challenges. Along the way mentor them. Support them. Work together to analyze results and responses. Through this intimate and symbiotic process aspiring and experienced leaders grow together. Functionally this means a disciplined system and schedule of training. It means a formal process of mentoring do not leave this to chance It means a dedicated process for follow-up and continual analysis and development. Keep this process focused on the most fundamental human level. It s too easy to lose the human connection to the process. Take care not to lose that connection to training checklists apps assessments and automation. We Lead People Not Process. Research shows us with no doubt that what people want and need most from their leaders is to know those leaders care. Such leadership is dedicated to the development of the people who make the organization work. And this caring compassion is essential when dealing with uncertainty. When people have legitimate fears they will respond best when they know they are supported and that their leaders genuinely care. Finally embed in this process the idea that uncertainty and its cousin adversity are tremendous opportunities to develop as a leader. Celebrate uncertainty. It s your opportunity to discoverthe leader you may never have become without it. Jim Bouchard is a speaker media personality and the author of The Sensei Leader and THINK Like a BLACK BELT. 16 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M TEC H NOL O GY BY MICHELLE HARBINAK SHAPIRO Top 5 Enterprise Tech Trends to Watch in 2017 W As your credit union takes stock of the past 12 months and plans for the year ahead don t forget to make enterprise technology a key part of the assessment. CUB s tech expert predicts that these five trends are the ones your CU likely will and should be focusing on in 2017. ith the end of 2016 having recently passed annual traditions are still at the forefront of people s minds. For those of us in the Cleveland area we we ve just heard non-stop Christmas music played on one of the local radio stations and our weather people have attempted to predict how terrible the upcoming winter outlook will be. For many businesses it s also the time of year to evaluate how well their organization preformed in the past 12 months compared to goals and key initiatives. It s also the time of course to start planning for the upcoming year ahead. While I don t claim to have any clairvoyant abilities I ve always enjoyed researching market trends and seeing how they compare within different industries. The enterprise software market while stable differs in forecast depending on which specific market you look at. Some industries like healthcare have seen a major uptick in enterprise software implementations to meet new electronic medical record (EMR) initiatives for improved patient care. While there s no comparable electronic information management initiative within the financial services industry more banks and credit unions are focusing on improved data management to enhance security and member services. Regardless of the industry spending for enterprise technology is on the rise. According to a recent survey published through SourceMedia research nearly 70 17 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M percent of chief information officers said they plan to spend between one and 10 percent more on technology next year compared to previous years. The other nearly one-third of the 300 respondents from various financial institutions intend on growing their IT budgets even more. Looking ahead here are five trends I believe we ll see credit unions focusing on in 2017 (based on research I ve read and conversations with our customers) More Credit Unions Evaluating Next Steps in the Digital Revolution I ve been in the financial services and software industries now for more than 15 years. Since making the transition I ve heard financial institutions talk about eliminating paper and going digital. While years ago it may have been a high expectation to fully eliminate paper and manage data electronically today it has become the expectation. TAB TECHNOLOGY Younger generations coming into the workforce want to have access to all financial information digitally opting for in-person visits at a physical office rarely or only when necessary. To suit their needs and the growing need for instant access to information for all credit unions large and small are implementing enterprise information platforms to better manage processes content and cases and to become more agile efficient and effective. approval processes identify and verify related or missing documents and load-balance work across teams to ensure even distribution of work. Streamlining of Fraud Investigations Unfortunately fraud affects every industry. It has become a common topic within nearly every publication I read. The good news about fraud being in the limelight so often is that more organizations realize the risks it poses. Many solutions have been developed to help prevent fraud or the impact after it happens because at the end of the day protecting members personal information is crucial to maintaining their loyalty. In the next year I foresee many credit unions leveraging technology solutions to eliminate spreadsheets store information more securely and allow fraud investigators to easily log access and interact with the critical data involved in a fraud investigation. Such streamlining eliminates the risks of regulatory action for credit unions that use manual procedures and spreadsheets. Improved Records Management and Retention for Compliance Compliance isn t a new trend for financial serveries organizations. But it also isn t a simple process for these providers either. To keep up with the growing number of regulations and I believe we ll see more credit unions setting records management functionality as a priority in 2017. Once digital records management capabilities use pre-defined rules to automate records management processes from record declaration through final disposition. Users can then place holds on those records to automatically destroy or purge them from the system. In so doing they can stay in compliance with the exact amount of time a record needs to be held and avoid the risks associated with unsuccessful audits. Fully Electronic Loan Processes with eSignatures My final prediction for the upcoming year is that we will see more credit unions implementing eSignature solutions for an end-to-end digital loan processes. Increase in Automation Using Workflow Workflow solutions become essential for any company that is fully invested in digital transformation. They work to map out structured predictable processes within a flowchart. By digitally managing those processes along with the digital information that coincides with them employees are able to complete work faster and deliver better service. These solutions have become so sophisticated within the last few years that they deliver more value than just routing documents and exceptions to the right people. Today they can manage more complex 18 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M TECHNOLOGY By integrating eSignature solutions with enterprise information platforms credit unions gain the ability to capture process access and store documents electronically thereby increasing loan process speed and accuracy decreasing costs and improving communication between systems. But eSignatures are not only relevant to loan applications. They can be used within new account opening stop payment requests and wire transfers as well. The end of one year and the beginning of another is an exciting time not only because of the holiday parties and time spent with friends and family but also because it s an occasion to reflect on the outcomes and opportunities from the previous year. Knowing that many credit unions 2017 plans will include ways to improve member service and retention I believe a good number of them will make goals and plans to fully digitize processes. They will also implement some of the specific solutions outlined above to easily and securely store access and retrieve members information from a single platform. If these predictions don t align with what your credit union is planning it might be time to evaluate your goals and strategies to achieve them. If you d like to discuss your enterprise technology strategy I d love to hear if these predictions follow your credit union s plans Comment below or send me an email at michelle.shapiro to chat. Michelle Harbinak Shapiro brings more than 15 years of experience in the banking industry to her role as financial services marketing portfolio manager at Hyland. Her mission is to share best practices and evangelize the power of ECM as a tool for banks credit unions and lenders to help automate paperbased processes and proactively manage regulations. 19 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M B R ANC H B U SIN ES S BY KAITLIN MORRISON Virtual Tellers Two Managers Tell Us How They Keep Branches Personal Virtual teller platforms may offer opportunities for credit unions to extend their reach but they also pose the risk of impersonality. How can you take advantage of all this technology has to offer without alienating your members Listen is as two CU branch managers share their top three secrets to success. technology giving them the starring role will help make the transition successful for everyone. For this month s column we asked two credit unions to share with us how they successfully use this technology and still maintain the quality personal connection members crave when they visit physical branches. Their answers show how your branch can add a personal touch and still extend your reach through the power of virtual tellers. Learn from their tech tips and help your members have a top-notch experience with technology at your branch. Tech Tip 1 Plan for the learning curve by engaging your staff and your members. Choose to deliberately make the technology more human and personal. While these systems do use technology the transactions are still fundamentally driven by human beings on both sides of the machine. This may seem very straightforward but branches ignore this tip at their own peril. Your members will likely need plenty of time and help adjusting to your new system. Your employees will too. At the Bay Shore Branch of New England Federal Credit Union (NEFCU) in Long Island NY branch manager Amy Williams-Carmella suggests accounting for plenty of time to assist members and help them feel 20 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M V irtual teller technology is reshaping many credit union branches across the country and the world. A virtual teller platform allows members to interact with a remote live person to conduct their banking transactions. This capability allows tellers to be offsite in a centralized location for multiple branches or elsewhere. For branch managers it represents another tool to connect with members and improve their experiences at their credit unions. Rather than alienating your members with such technology you can implement it in the right way and actually enhance the experience at your branch. Your branch staff and other support staff are already the backbone of your credit union. When you add new BRANCH BUSINESS TAB comfortable. This is also an opportunity for both your in-branch and remote staff to shine. The two teams work cohesively as our member service representatives spend a significant amount of time at the ITMs (Interactive Teller Machines) demonstrating and introducing members to the new technology to ensure a positive member experience Williams-Carmella says. She also suggests testing how members use and interact with your technology. Everything from camera angles to lighting to how keyboards are positioned and how responsive the touchscreens are all factor in to how users interact with the technology. Technology that is perceived as difficult unfamiliar strange or somehow wrong can be off-putting or uncomfortable to some members. User experience of technology should be an important factor in how and what your branch presents to the membership. David Perry vice president of branch operations at Mid-Hudson Valley Federal Credit Union (MHVFCU) recommends preparing staff members for the time and effort necessary to assist members during the transition to virtual teller technology. This is also the right time to employ creative strategies to make your members more comfortable trying the new technology he says. During our initial roll-out we stationed staff on the floor with dollar bills. We offered each member the opportunity to deposit a dollar into their account as a means of demonstrating the technology Perry said. With a bit of planning and learning you can even build these new technologies into your branch team s strategy. Be sure to include your offsite virtual staff who are a valuable part of the success of your branch. Tech Tip 2 Regard your offsite staff as essential members of your branch team. Whenever possible try to include your branch s offsite staff in team meetings or find other ways to keep them informed and involved in the life of the branch. A cohesive credit union team will help you provide better member service. Your tellers understand your members and are close to the needs of your membership even if they are remote Williams-Cardella points out. I make sure to personally include our remote tellers on anything affecting or related to the branch she says. Because remote tellers help members with their financial transactions they also have opportunities to upsell and cross-sell. Our ITM tellers are a rich source of cross-sell and sales referrals as they are the first line of communication with our members she says. The tellers act as an extension of the branch and we consider them an integral part of the branch team. Williams-Cardella s branch has no onsite tellers. She claims this model is more efficient and allows tellers to quickly help members with fewer errors and a greater level of member engagement during transactions. NEFCU s headquarters in Westbury NY has onsite staff and branch management to help members use the machines and ensure that operations run smoothly. Our staff is excited about the new technology as it represents the future of banking. Both teams really do work as one when they are serving members she says. At MHVFCU Perry says the virtual tellers (whom the credit union refers to as personal tellers ) are basically their own branch and are valued for what they do for the entire credit union. The personal tellers work at a centralized location and function together as a single team. We consider them their own branch a branch 21 22 00 11 77 C U B U S I N E S S . C O M TURN ON YOUR CFO and CEO 4 CFO withTEAMBUILDER. CURRENCY U N II O N U N O N B U S II N E S S B U S N E S S teambuilder buy C R E D I T J JAANNUUAARRYY TAB BRANCH BUSINESS which supports the entire physical branch network he says. The retail branch management team members consider and refer to the personal tellers as their tellers. Tech Tip 3 Boost your branch by taking advantage of the best technology has to offer. As Perry claims technology offers some significant advantages for your members that make the transition to virtual teller systems worthwhile for many credit unions. These systems allow your branches to scale staffing levels to meet demand and to provide better service during peak hours. Branches that see variable traffic throughout the day can benefit from this boon. You can seasonally adjust your staffing based on past transaction data and expected future traffic allowing for flexible scheduling across multiple branches. Even with these advantages for the credit union members also stand to benefit from improved service during peak hours. The personal teller channel allows for the delivery of personalized member contact over a broad network during extended service hours Perry notes. In these days of commuting working multiple jobs and such many members simply cannot make it in to the branch during traditional business hours. The availability of the extended service house the personal tellers offer is a convenience many members need and desire. Williams-Carmella agrees. It also eliminates a lot of common errors as members are engaged and can see on screen everything the teller is processing. It improves the member interaction which leads to [fewer] transactional discrepancies. It s a win-win situation for the credit union and our members. Making Technology Personal In Branch BUSINESS we frequently talk about the role of member experience in the life of your branch. If you do choose to embrace remote teller technologies use them to enhance the personality of your branch and its connection to the membership. Make the technology fit the people not the other way around. As future credit union branches become more digitally connected it is this traditional value that may just save branches from becoming irrelevant. Your branch is only as relevant as it is to credit union members so make them the architects of your technological experience as you create your branch s future. In addition to covering Branch BUSINESS for CU Business Kaitlin is a freelance business writer based in Central Washington State. She is passionate about educating her readers and is a proud credit union member and supporter of credit unions. You can read more of her writing at 22 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M B R ANC H B USI NES S BY MEREDITH DEEN Branch Of The Future The Traditional Office Will Be In The Mix Forget what you ve heard about the future of the credit union branch. All those space-agey predictions are not likely to come to fruition. In fact the traditional office branch will be here for a long time to come but it will be part of an individually tailored and dynamically mixed approach rather than one-size-fit-all. Here s how that might look. The ratio of population to branches has declined from 9 340 in 1970 to 2 970 in 2014. This staggering metric is a result from a nearly 300 percent growth in the number of branches since 1970 while the population growth was nearly half of that. Coupling the decline in the ratio of population to branches and the recent decline in bank branches suggests that the market is starting to correct itself. It is going from being over branched and not shutting down branches when branch functionality became dated to being branch balanced. M any interesting branch designs have emerged in the last few years to address consumers shifting financial needs teller-less offices and retail-focused spaces resembling an Apple Store more than a bank or credit union to name only two. Branches are changing and with good reason their transaction numbers are steadily falling as consumers perceive offices less necessary for their daily needs but important for in-depth product conversations and financial advice. Amid the change we ve seen predictions that the branch of the future all of the FI locations across the U.S. will someday look like something out of The Jetsons. But those forecasts won t likely come true. Branch banking data actually indicates there will always be a place for the traditional office alongside new branch designs as the financial marketplace evolves. Yes branches have experienced a 45 percent decline in transaction volume since 1991 according to FMSI s Teller Line Study. The number of branches in the U.S. has also declined by 4.8 percent since 2009 says the FDIC. And mobile banking is advancing quickly much faster than Internet banking originally caught on. So does that signal that branches especially the traditional office are quickly going the way of the typewriter No. 23 C R E D I T U N I O N B U S I N E S S Branch Design Based on Market While many individual branches will likely see significant changes in how they operate over the next TURN ON YOUR BRANCH SUPERVISORS & MANAGERS withTEAMBUILDER. 4 BRANCH BUSINESS C U B U S I N E S S . C O M teambuilder buy 2 0 1 7 J A N U A R Y TAB BRANCH BUSINESS 20 years we believe the branch in the coming decades will not only be alive and well but will also in many ways be very similar to the branch of today. With 94 000 branches in the U.S. in 2014 according to the FDIC all with varying degrees of accountholder bases including different demographics socioeconomics and generational gaps combined with geographic difference it would be unlikely to see digital technologies cause a dramatic shift in how most branches operate in the coming decades. It is much more likely that financial institutions will continue to have a dynamic mix of branch types tailored to the individual branch goals and circumstances. What will certainly happen in the next decade is FIs will not go with a one-size-fits-all approach to branching. Instead they will rely on detailed analysis of the local market and consumer needs to choose the right type of office. They will look carefully at the demographics and socioeconomics of the area along with the potential competitive forces. For example in a more affluent area with a large Baby Boomer population a branch may benefit the most from increased sales training and branch sales acceleration technology investments. Conversely in another area with a predominantly younger population with little money to invest it might be a better idea to focus technology investments that drive a faster more secure and optimized branch environment. And in areas in which transactions are high and personal contact is desired by the customer base the traditional office will remain. FMSI sees the future of financial institution branches looking like this A Personalized Experience Upscale Branch Model equipped with tablets interactive touch screens branch activity tracking software and more A Self-Directed Technology Model equipped with smart ATMs video interactive tellers branch appointment software and more The Traditional Branch Model with forecasted staff schedulers lobby-activity tracking software branch appointment software and cash recyclers Let s look closely at these three types of branches Personalized Experience Upscale Model Often referred to as the Apple Store in banking the Personalized Experienced Upscale Branch Model aims to create a comfortable and trusting environment where accountholders are impressed with hands-on white-glove-type treatment from associates. Other than the sleek design the key to achieving success with this branch experience weighs heavily on the caliber of staff who work there. Unlike traditional branches where activities are separated by divisions of labor teller activity lobby interactions this type of branch mostly requires universal employees who handle the full spectrum of the accountholder experience. Due to the increased per-employee cost of this model a financial institution needs to carefully consider the sales potential when rolling out these types of locations. As previously mentioned the branch account base needs to meet a number of data points to make a Personalized Experience Upscale Model a success. Such data points include a high enough income level and the right age range with accessibility to the branch. This office is especially ideal for a more urban or suburban setting. FMSI predicts that these specific and limiting requirements make it unlikely this office will be the dominate branch type in 20 years. Self-Directed Technology Model Probably what most of us imagine when we think of the branch of the future is the Self-Directed Technology Model where the consumer s experience is focused on extremely fast easy and secure interactions made possible by futuristic technologies. 24 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M BRANCH BUSINESS TAB These types of branches generally have the most potential in highly populated areas where space is limited and transaction volumes are high. But scaledback versions of this model also give FIs an affordable option to expand their services to more rural areas. With significantly fewer staffing requirements to keep these branches up and running banks and credit unions will experience sizable cost savings over time when compared to more traditional branch operations. Due to the affordability and reach of these types of branches FMSI predicts they will see significant increases over the next 20 years. possibly due to picking up customers from the mega banks. This model is most effective in handling as many face-to-face interactions as it can. And in an industry where a premium is placed on personal in-person exchanges it can generally lead to a healthy number of deposits and loan activity. FI management teams have spent an enormous amount of time and effort toward maximizing the earnings from traditional branches which will certainly continue in the future especially with emerging sophisticated technologies. Traditional Model An oldie but goodie this branch type is familiar to us all. A row of teller windows a roped-off line and a handful of desks and or private offices throughout gives this type of branch a functional layout that works very well for many markets. Like it or not this model is here to stay for a number of years. As of today the vast majority of branches operate in this way and with an average of 6 500 transactions per month according to the FMSI Teller Line Study they are still getting plenty of traffic. In fact FMSI sees from its client base that a number of its branches have actually experienced an increase in transaction volumes over the past couple of years Tradition Remains So if you re thinking that someday in the not-toodistant future you ll need to toss out your traditional office think again. While branches are changing a number with a mix of new technology and specially trained staff to address specific market demographics and needs the traditional branch will have consumers to serve and a place within financial services for quite some time still. Ms. Deen is president of Alpharetta Ga.-based Financial Management Solutions Inc. (FMSI) which provides financial institutions with business intelligence and performance management systems for efficient branch staff scheduling and lobby management. She can be reached at meredithd 25 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M BRANCH BUSINESS TAB 26 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M MA R K ET I NG MATTE R S BY KEVIN FLANAGAN Millennials An Untapped Goldmine for Credit Unions Is your credit union tapping into the financial gold the Millenial generation represents To hit pay dirt you ll need to provide such members with prompt and highly personalized customer service. Discover some of the perhaps unexpected means of striking it rich with this demographic. t s easy to make generalizations about various demographic groups. For instance Baby Boomers are technology-phobic. Members of Generation Z who are still mostly in high school and college were seemingly born tweeting. And then there are the Millennials. Generally identified as being between the ages of 21 and 35 this demographic is fast becoming America s most powerful consumer group. And that certainly makes them an attractive target for virtually any business. But who are Millennials and why are they important to credit unions Well they re a group whose habits are somewhat difficult to generalize. While most of them came of age in the digital world of smartphones and online music they aren t completely devoted to an all-online lifestyle. And from the perspective of credit unions Millennials represent an untapped goldmine of potential members. According to consulting firm Deloitte by 2020Millennials will make up an estimated 50 percent of the global workforce and are expected to control between 19 trillion and 24 trillion on a global scale. That type of financial power represents an incredible business opportunity for credit unions. As wealth transfers to Millennials who are surpassing Baby Boomers as the largest demographic in the United States credit unions are well-positioned to provide this generation with the prompt and highly 27 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M I personalized customer service they desire. The timing is right as Millennials have begun to reach the stage of life where they are making major purchasing and financial planning decisions. While Millennials are a generation that embracesthe latest service models such as Airbnb and Uber research shows they still want to have in-person conversations with well-informed experts before making major financial decisions. In fact among the major demographic groups including Baby Boomers (between 55 and 71 years old) Generation X (36 to 54 years of age) and Generation Z (18- to 20-year-olds) Millennials are among the most likely to come into a branch to conduct a financial transaction. In a recent survey of credit union members conducted MARKETING MATTERS TAB by TimeTrade Millennial respondents revealed that they expect a high level of service from their credit union. They also showed a willingness to schedule an appointment with a specialist at their local branch a tendency which presents credit unions with opportunities to upsell high-end services such as mortgages home equity loans and financial planning programs. Credit unions that want to take full advantage of Millennial market opportunities must provide a superior customer experience across the entire customer journey from an initial digital touchpoint to the in-branch experience. Savvy credit unions that focus on meeting their members evolving needs and providing the personalized service that Millennials seek will reap the rewards that come from long-term loyal members. The trust that credit unions work to instill in their member owners is especially appealing to Millennials. Here are some Millennial credit union experience data points that are of particular interest to those responsible for driving membership growth at credit unions Millennials are more likely to visit a credit union branch (57 percent) than a bank branch (48 percent). Nearly half of Millennials (49 percent) visit a credit union to open an account. 43 percent of Millennials value personalized service from a credit union more than a bank (34 percent). 77 percent of Millennials would be willing to schedule an appointment to meet with a specialist in a credit union (i.e. mortgage specialist wealth management loan officer). 93 percent of Millennials are willing to answer a five-question survey from their credit union to provide feedback on their most recent branch visit. 88 percent of Millennials would be willing to go into their credit union on a weekday if offered a guaranteed appointment time. Just as there s no such thing as one-size-fits-all clothing so too there is no single trait or tendency that applies to all members of any given demographic group. But when it comes to Millennials TimeTrade s research surveys show they highly value in-person contact when conducting financial business. Like all consumers Millennials want to be respected by those with whom they do business they want answers to their questions and most importantly they want to feel as if their business is valued. All of these characteristics fit very well with the way credit unions strive to serve their members. 28 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M MARKETING MATTERS TAB Ultimately to win business from Millennials credit unions must market themselves effectively to this increasingly powerful generation. But equally important CUs must use the technologies preferred by Millennials online and mobile to bring them into the branch for personalized conversations that drive business. That is how credit unions can attract Millennial members so they can meet their financial needs today and for many years to come. Credit unions that have the greatest success serving the Millennial demographic will be those that are willing to go the extra mile and provide We ve been expecting you service to every member every time. Kevin Flanagan is director of content for TimeTrade. His responsibilities include managing the company s surveys that capture consumer preferences about retail finance and other industries. 29 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M MA R K ET I NG MATTE R S BY EVA LAMERE Amp Up Your Mobile Site To Boost Member Conversions If your credit union s conversion rates are lackluster your mobile site s loading speed could be to blame. Don t let slowdowns send would-be clientele elsewhere. Accelerated mobile pages (AMPs) can help keep your CU in the fast lane with today s growing number of mobile device users. project AMPs can load content on mobile devices almost instantly. The average mobile page loads in 19 seconds an eternity if you re looking for quick information most users abandon a website after only three seconds of waiting. That means a credit union s mobile-friendly website with a swift responsive design still might not be enough to attract and retain potential members who are looking for banking information and products. AMPs seek to minimize user frustration by presenting pared-down web pages without pop-ups videos side menus forms or other add-ons that muddle the experience. T he speed at which your credit union s mobile site loads can cost you in terms of both website visitors and potential member conversions. Accelerated mobile pages (AMPs) help solve this common (and costly) pain point bringing important information to the forefront improving the overall user experience and ultimately strengthening conversion rates. Consumers Mobile Use Is Rapidly Evolving In the past five years the ways that Americans access the Internet have changed greatly. Desktops and laptops have taken a backseat to smartphones tablets phablets and other mobile devices for web browsing and content consumption. In fact a mobile device is the only way more than 31 million Americans access the web a number that s expected to grow to 41 million by 2020. As mobile devices continue to become more sophisticated and pervasive a mobile-first way of thinking is even more integral from a competitive standpoint. Credit unions that treat the desktop experience as the first online interaction for potential members are misaligned with current web user behavior and trends. With the uncontested rise in popularity of mobilebased web browsing a glaring issue remains how to best deliver content to users on mobile devices. Enter AMPs. Created by Google engineers as an open source 30 C R E D I T U N I O N B U S I N E S S Jump On The Amp Wagon While the AMP format has been readily adopted by traditional content publishers it s also a natural fit for the financial industry. The first step is analyzing your current website is to ask Which pages featuring static evergreen content are most frequented by potential and current members This question can be best answered through the analytics program you use to track actions on your website. Popular content may include rates account details or financial education information. With AMP-ready content identified task your web development team whether in-house or external to create AMP versions of those pages or even to create an entire website based on AMP technology. Remember 2 0 1 7 C U B U S I N E S S . C O M J A N U A R Y MARKETING MATTERS the primary objective of these pages is to be fast-loading not to offer the traditional full desktop experience. More Conversions Mean More Customers Utilizing AMPs for your website leads to other benefits including higher search engine rankings and more member conversions on your site. AMPs are showcased above the standard search results with a distinctive AMP icon that dominates the top of the mobile viewport. They re the first results search engine users see and are therefore more likely to click on (rather than scrolling down the page). This means more visitors a better user experience and a higher likelihood that a visitor will take action whether it s a phone call about opening a mortgage a completed credit card ap- plication or a request for more information. The best time to implement AMPs on your credit union s website is now. Get a jumpstart on competitors who are slow to adopt this new web-browsing format by creating AMPs of your website s most frequently consumed content and turn casual browsers into loyal members. Eva LaMere is president of Austin & Williams an outcomes-driven financial marketing agency headquartered in Hauppauge Long Island NY which provides clients with branding advertising and digital marketing ideas that inspire action. For more information visit AWARENESS ACQUISITION ASSET GROWTH IDEAS THAT INSPIRE ACTION MARKET SHARE We re the financial marketing experts who can help your credit union stand out from the pack attract new members and deepen relationships with existing ones. What defines success for your brand ADVERTISING BRANDING DIGITAL 877 . 730 . 2210 AUSTIN-WILLIAMS.COM AUS493_AW_PR_1675x1203_4C_v4.indd 1 6 15 16 4 53 PM 32 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M MEM B E R B USI N ES S L EN D ING BY KEN HAYES Is Your Credit Union Balancing Increased Lending with the Resulting Increased Bad Debt Here is the Best of Both Worlds... Does it sometimes feel like your credit union is performing a tightrope act when it comes to outstanding loan collections If so these payment recovery strategies will get you back into equilibrium without alienating your members. And you don t even have to hold the balancing pole yourself if you don t want to. A s the mandate to lend and grow comes forth we struggle with revenue assurance at all phases of the member credit-to-cash cycle. Typically opening the lending floodgates has meant noticeable recovery decline but this is no longer a necessary evil. By adjusting contact strategy coding customer responses and analyzing results many financial and operational benefits become available. The following is a way of treating members with respect and concern that decreases both Days Sales Outstanding (DSO) and member complaints. Here s the kicker it can be accomplished both as first-party treatment (contacting members as yourself through inhouse recovery) or via a third-party collection agency where the impact is heightened and execution becomes essential. Extremely high CSAT & NPS Heightened likelihood of cure and mitigation Interestingly higher pay-up when compared to payment-focused contacts Invaluable compliance proof and operational feedback It is vital that the member never feels like the call is primarily aimed at getting payment. Rather the call is warm and asks How can we (the creditor or collector) be more helpful in preventing future past-due situations for all Overview & Benefits Late-paying members from overdrafts to mortgage payments appreciate being asked what may have contributed to their payment delay. By posing the right questions coding member responses and analyzing results the following benefits abound 33 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M MEMBER BUSINESS LENDING Interestingly the member is much more likely to wind up making a payment after being made to feel like delinquency is a shared challenge. A Study A mid-sized credit union identified with a podcast I was invited to do at the 2016 Great New England Credit Union Show. The difficult balance between easing credit profile requirements on the front end and the cost of servicing the resulting rise in bad debt on the back end struck a chord. The assumption was that harsher collection practices would have to be employed risking membership disharmony and possible churn. We proposed an antithetical approach that utilized a third-party contact approach (letters and calls from a national collection agency) but with a twist our collection agents were help-focused and the script reflected this mindset. The result was an unimaginable increase in payup (18 percent) with a decrease in recovery complaints (any negative feedback from 90 days past due on) of almost 65 percent This surprising result allowed the credit union to slowly ease credit profile requirements increase business and maintain minimal bad debt levels all with virtually no brand damage or churn. In fact membership increased and feedback was largely very positive. What would you say is the most accurate reason for your going past due 1-juggling bills 2-forgot 3-unhappy with CU service. If 1 or 2 try to set up a monthly auto-pay and schedule the past-due payment. If 3 take notes on details then offer a 10 percent discount for immediate payment. It s a thank you for the feedback. Close with Thank you so much for your feedback and patronage. In Closing By handling recovery calls differently even surprisingly members will tend to do their best to reciprocate or match the vibration if you will. This strategy just might create the mini-miracle your credit union is seeking for 2017. Best of luck First-Party Sample Script Good afternoon Mr. Smith. My name is Ken and I m calling on behalf of ABC FCU. How are you today Great Thank you for your last payment. You seem to be 30 days past due but we re calling more to see if there s anything we can do to help you stay current with us in the future. Ken graduated from Columbia University in 1993 after having studied Economics Political Science and Philosophy. Career stints with Chemical Bank NCO Financial and now Sunrise Credit Services have lent to broad knowledge of financial markets and detailed acumen regarding the consumer credit-to-cash cycle compliance and overall customer experience. Three children reading writing sailing and skiing occupy most of Ken s time not spent addressing the AR challenges facing his credit union and financial clients. 34 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M 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 PAYM E NTS BY BILL PRICHARD Fueled By Economic Growth Auto Sales Expected To Stay Strong In 2017 Is your credit union poised to capitalize on the auto selling momentum that will continue humming along in 2017 CUs should be doing everything they can to take advantage of this driving force. As luck would have it one of the key factors in leveraging auto loan volume is something that is completely within a credit union s control. at 2.6 percent employment growth between 150 000 to 180 000 jobs per month and the price for regular-grade gasoline staying at less than 2 per gallon. Also the Fed s rate increase is expected to have little effect on auto loan rates at least in the near term. F ueled by several years of strong growth even the Federal Reserve s increase in interest rates and the rough-and-tumble presidential election should not dampen 2017 auto sales and lending which are expected to stay strong through the new year. National Automobile Dealers Association (NADA) chief economist Steven Szakaly predicts sales of 17.1 million new cars and light trucks in 2017 a slight decline from 2016 sales of 17.4 million new vehicles. We are headed toward a stable market for U.S. auto sales not a growing market Szakaly said last November in advance of the Los Angeles Auto Show. The industry has achieved record sales and pentup demand is effectively spent.... It s important to recognize that there are some political unknowns but the economic outlook for 2017 looks extremely positive for auto sales particularly light trucks. NADA also forecasts that dealerships will sell 15.3 million used vehicles in 2017 compared to an expected 15.1 million used car sales in 2016. The total used vehicle market will exceed 40 million retail sales in 2017 according to the association. Szakaly said that auto sales momentum should be maintained by the overall positive economic outlook for 2017 with a projected gross domestic product growth 36 C R E D I T U N I O N B U S I N E S S Credit Union Industry 2 Auto Lender John Caddell lending manager at CO-OP Member Center (CMC) a wholly-owned subsidiary of CO-OP Financial Services points out that increasing auto sales means growing loan activity for credit unions. The credit union industry is already the nation s second largest source of auto loans behind banks and ahead of finance and captive companies such as those lenders dedicated to a specific auto manufacturer or dealer. J A N U A R Y 2 0 1 7 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 TAB PAYMENTS Capturing Loan Business After Hours Caddell is on the front line of the auto lending activity as his team of credit analysts handle substantial volumes of auto lending day and night. We are busy and undoubtedly we will continue to be busy said Caddell. Auto loan volumes recently surpassed 1 trillion up more than 40 percent from 2009. That s because consumers have been buying cars at an increasing rate in light of the improving economy low interest rates attractive dealer purchase and leasing programs and continuing low gas prices. Americans are also replacing their older cars with new ones at a record rate. CMC offers credit union members professional lending services via telephone and Internet decision support and through CO-OP s proprietary ExpressLink indirect lending. Caddell s group handles underwriting for 120 credit union clients nationally executing applications for new and used vehicles RVs motorcycles boats ATVs and even scooters. After hours Monday through Friday is the prime shopping time for credit union members especially when buying a car said Caddell. They and most other consumers generally apply for a loan through a dealer sometime around 7 p.m. on a weeknight. In fact the auto purchasing expert at USAA s Auto Circle recommends that late in the day is a better time to buy a car. That is because the salesperson may be more amenable to negotiate as the minutes tick down to closing time and s he wants to meet his her quota. At the end of office hours and especially on the weekends a call center connection will help a credit union capture that loan opportunity on an after-hours basis which may be difficult for smaller credit unions with limited staff. Without a call center a CU will probably lose the loan and any associated insurance and affiliated fees. Just as importantly it will likely let the opportunity to gain a new member or strengthen the lending relationship with a current one slip away. Being available and offering quick turnaround is especially important when working with auto or other dealers said Caddell. When a dealer calls [they] most likely [have] a hot prospect and they are not going to lose a sale because their local favorite credit union is closed or unable to immediately handle the call. Don t forfeit such opportunities to a competitor who is at the ready to take the call and reap the associated rewards. Position yourself now to pick up on the first ring. Bill Prichard is senior manager public relations and corporate communications for CO-OP Financial Services ( org) a Rancho Cucamonga Calif.-based payments and financial technology company serving credit 38 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M LEN D ING SO LU TIO NS BY BILL HULSTRAND What to Do When the Credit Score Sends a Mixed Message Some loan decisions are crystal clear and others are a bit fuzzy. How do you and your staff decide when to turn down a questionable loan request versus when to say yes This real world scenario sets the record straight on how to proceed through the haze. A nyone can make the decision to approve an A member with great income and low debt. But what about those Anyone can make the decision to approve an A member with great income and low debt. But what about those applications that come in with mixed messages (i.e. decent credit score but some troubling factors) That s what separates the great from the merely average decision makers. Let s look at the following credit report to see a classic example of the mixed message loan. But first here are the basics of the application Loan amount requested 35 493 for an RV Income 125 000 year Debt-to-income 39.19 percent Loan-to-value 75.83 percent Credit score 692 39 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M LENDING SOLUTIONS TAB Below is a redacted version of the credit report. Let s take a look What are some things that we notice here FICO 692 with the following codes o Top two reasons are code 38 (serious delinquency) and code 18 (number of accounts with delinquency) o Next two reasons are code 10 (capacity) and code 8 (too many inquiries) By now your staff should have become familiar with the following guidelines o The first two codes carry the most weight. o The second two codes carry far less weight. Any codes relating to delinquency with a 692 score are great news Why The delinquency is becoming old old news Payment patterns equal 35 percent of a score s make-up. There is no way a consumer could score this high with any delinquency that is recent. Code 10 can be a dangerous sign or it can simply mean the consumer has limited available revolving credit. The credit report would penalize both these situations in essentially the same manner o Consumer A has 40 000 in limits and owes 36 000. His capacity is only 10 percent. o Consumer B has 2 500 in credit limits and owes 2 250. His capacity is also only 10 percent. o Consumer A most likely has a bankruptcy benefit indicator (BBI) that is much higher. Consumer A will absolve far more debts and strain on his budget regardless of income. 40 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M LENDING SOLUTIONS TAB Let s look further on in the credit report and see what we find Delinquency is from a mortgage 14 months ago. When was the last hiccup with this consumer s credit report The consumer has large liens from approximately 18 months ago. These liens are driving the score down. So what would we do We don t ever want to immediately turn down a loan. This credit report has so many questions and holes. It needs a strong interview to proceed. The mixed message indicates we must do our due diligence. Here are some additional thoughts for the loan interview When you see a code 10 you must immediately look at the credit summary to assess how much revolving debt is outstanding. For this consumer his revolving debt is 2 500. His capacity is 50 percent. Are we concerned What is his BBI It s low based on just the revolving debt. The liens need exploring because they could change the landscape tremendously. Once a code 10 is present you need to immediately check the unsecured debt ratio to see whether the code 10 is a real problem. Inquiries in the past two years are 19. This is far too high. We recommend two to three per year. Always train staff to look at whether the inquiries are like as well as to see how much of a problem they are. 41 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M TAB LENDING SOLUTIONS We recommend testing your employees with this loan example (or with other mixed message applications you have in your portfolio). Using the score codes to determine the direction the score is heading is vital. The biggest key is getting your staff to ask the right questions while conducting a thorough interview. As the late great Paul Harvey would say always get the rest of the story. That s all for this month. Happy New Year and Happy Lending in 2017 Bill Hultstrand is Director of Business Development for Lending Solutions Consultants. 42 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M CU AD V E RTI S I N G BY SCOTT WILSON Debunking Common Myths in Digital Advertising M If your credit union s aim for 2017 is capturing a greater customer base then you can t afford to have a weak digital presence. Some digital marketing strategies however are more effective than others. Keep reading to uncover three of the top pillars to success. 1. Search Engine Optimization Earning top rankings in natural organic Google search is still one of the best ways to grow a business. When a consumer is searching for a product or service online cutting through the clutter of now over 130 trillion web pages to end up among the first few results is critical. It s also no easy task. A strong SEO campaign takes time requires consistent effort and is founded first and foremost on good data. Pros No cost per click to your website (once top organic search rankings are achieved) Consumers click on organic search results four times more than paid ad results. Get found at the exact moment a customer is searching for your products or services. Cons Delayed ROI It takes time to earn top rankings (unlike paid advertising). SEO is something you need to consistently work at. If done incorrectly it can have you blacklisted by popular search engines. any companies are recognizing the importance of having a strong digital presence. Gone are the days when customers would rely on their phonebooks to pinpoint companies. Today customers are finding companies namely through search engines social media sites word-of-mouth recommendations and customer reviews. This isn t exactly new news anymore either. Many companies I work with in fact are already running paid advertising campaigns and managing social media sites. Some have even dabbled in search engine optimization. There are many pillars to creating a strong digital presence including Website Earned Social Media Paid Social Media Search Engine Optimization (SEO) Search Engine Marketing (SEM) Google My Business (formerly Google Places) YouTube Today we ll examine the pros cons and common myths associated with the three pillars (SEO SEM and Google My Business) that are essential to capturing new customers for your credit union. MYTH To rank highly on search engines for a specific keyword you should use that keyword a lot on your webpage. 43 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M CU ADVERTISING MYTH DEBUNKED Like this myth there s a lot of (mis) information out there about how to win at SEO. Keywords you are trying to rank for should actually account for less than one percent of the words on your web page. In fact if a keyword appears too frequently it could be considered keyword stuffing and result in ranking penalties. Search engines reward sites with ample relevant content to user searches. (We recommend at least 2 500 words with your keywords naturally included 19 times.) MYTH Targeting the exact keywords you want to rank for is the best use of your marketing dollars. MYTH DEBUNKED Understanding what words your customers are using to search for your products and services AND the potential cost per click of those keywords is an integral way to protect your marketing dollars. For example we interviewed four marketers from the credit union industry (two in the USA two in Canada) and asked what keywords they are currently targeting in their paid campaigns. Below we have assessed four common keywords across all four campaigns Highinterestsavingsaccount Bankaccount Bestmortgagerates Debtconsolidation 2. Search Engine Marketing Increasing your online visibility through paid opportunities is key to reaching potential customers. While it may take a while to earn Google s trust through SEO search engine marketing can be turned on fairly quickly. With SEM businesses pay to play and are relevant while maintaining full control of speed and budget. SEM allows you to target prospective customers through search engines such as Google Bing and AOL. Pros Unlike SEO this is a fast way to rank for search terms. Get found at the exact moment a customer is looking for your services. Great tool for A B testing Targeted by location and keyword New Demographic targeting for YouTube (Truview) & Display (Banner Ads) Cons There will always be a cost associated with paid advertising. Your ads automatically turn off when you hit your daily budget. On average these keywords are being searched 500 000 times monthly (in North America) with an average cost per click of 19.78. After performing a complementary assessment we uncovered the following keyword opportunities creditunionnearme bestcreditunions localcreditunion These keywords are being searched twice as often with an average CPC of 3.98 (five times cheaper). Partnering with a professional SEM agency (Google certified partner is a must) can help you generate better leads and actually save you big bucks 3. Google My Business (formerly Google Places) Having a strong Google My Business page (shown in search results with a map and other local listings) is integral to your online presence. The fact that many 44 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M CU ADVERTISING credit unions are local and support the communities In summary these are only three of the many marketthey operate in is quintessential to your local success ing pillars a business can use to build a solid foundaonly if the search engines see your local participation. tion for its digital presence. It s important that all of your efforts interrelate and support each other. BusiExpert Tip 1 Ask local charities vendors businesses ness owners and marketers must ensure that each of these is given equal focus attention and importance or event partners to link to your local web page. and that all efforts work well independently as well as Expert Tip 2 Embed the map app from Google My collaboratively. As businesses try to keep up with the fast change in Business to your Contact Location page on your website. Doing so ensures that Google knows your physi- consumer behavior and trends these marketing pillars cal location. Google likes to provide local results for will continue to evolve. local searches over national searches which is how Scott Wilson is the founder and CEO of RankHigher. you can outrank the big banks in your community. ca a Burlington Ont.-based digital marketing and Pros Cons SEO firm. He is considered Canada s leading speaker on SEO web sales Internet marketing and social None Get found by customers media ROI. Scott can be reached by email Scottw who are physically near you. Foster positive customer About RankHigher reviews (and manage the Based out of Burlington Ontario bad ones) to earn trust began in 2002 and has since built a team of 50 exfrom potential customers. pert digital marketers who drive business growth for Get found at the exact their clients. RankHigher is recognized as an official moment a customer is Google Partner with over 25 Google Certifications in looking for your services. digital advertising. Understanding a business s online opportunity is our cornerstone with an emphasis on MYTH Google My Business is used only to get direc- building mobile-friendly search-optimized websites tions to from locations. online advertising campaigns social media marketing channels online reputation and brand awareness MYTH DEBUNKED Google My Business generates video production and more. Some of our clients inleads to your website phone calls to your business and clude Bayer Canadian Olympic Committee De Beers directions to your locations. Additionally customer Diamonds Gatorade Harley Davidson Little Caesars reviews are playing a large role in acquiring new cus- Marriott and Weight Watchers. For our complete clitomers. How you are rated on your My Business list- ent list visit clients. When companies ing on Google will mean more to potential customers like these trust us with their websites you can trust the than how they get to you. This is a great tool to manage information we provide. For more information on RankHigher please visit what customers are saying about your business online. Nearly a million searches are being conducted each http . Like us on Facebook or month for a credit union near me. A highly rated follow RankHigherCa. page here will help drive more relevant leads directly to you. C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M CU TR AI NING BY KENNETH C. BATOR MBA REACH for More in 2017 I Do you run a credit union that just so happens to be in business Or do you run a business that offers quality services to a well-defined niche that just so happens to be a credit union often ask these questions when I begin working with a new client. It may seem like the questions are the same but they really aren t. In an environment where on average we have been losing a credit union per day since 1969 I m convinced that the credit unions that survive in 2017 and beyond will be those that are run like a business and create a true differentiating brand that is supported by a strong culture and that also appeals to a specific niche. Late in 2016 I had the pleasure of attending the REACH conference. Thankfully the program much like CU Business Magazine focused its education on running a credit union as a business. The event managed by the California and Nevada Credit Union Leagues began with Your credit union is its own dynamic business with unique goals. When I heard that very first sentence in the introduction I was just finishing a conversation with the attendee sitting next to me. That statement almost made me immediately cut off my discussion to stand up and clap. After being involved in this industry for well over 20 years I m used to these events leading off with a diatribe on how to prepare for a slew of impending regulations a Don t Tax My Credit Union rant or a history lesson to impart the immaculate importance of the credit union movement. (Insert yawn.) Before I lose more than half of those reading this article allow me to say that all of those topics are clearly and absolutely important. However I would argue that none of them are the most important. So as someone who frequently challenges his clients to think like a business that offers quality services that just so happens to be a credit 46 C R E D I T U N I O N B U S I N E S S J A N U A R Y 2 0 1 7 C U B U S I N E S S . C O M union to say that I found the opening of REACH to be refreshing is an understatement. In fact when I had the pleasure to speak with Larry Palochik SVP Member Solutions for the California and Nevada Credit Union Leagues after the conference I first asked him about the credit unions as businesses theme I experienced throughout the program. We rebranded (the conference) after the downturn of the economy and the first year our theme was REACH...Reach Up Reach Out Reach Deep answered Larry. Credit unions had spent so much time just having to survive and deal with regulators and the economy. We were really trying to get credit unions to look outside of their own business model. Look at other industries to see what innovations and disruptions were happening out there. Pull themselves out of the muck and mire... and reach up out of the downturn to reach out to new partners and new ideas and reach deep within themselves to reinvent their cultures their organizations the way they deliver the member experience. CU TRAINING TAB Our members know that we will challenge them especially in the general sessions with ... folks from outside the industry that maybe are completely different to try to connect those parallels that all businesses are facing added Larry. We continued to discuss the challenging environment of today and a subject near and dear to my heart - strategic planning. In the past you could strategically plan for three to five years and everything was wonderful but today things change in 12 to 18 months. You have to change all the way from the top of your culture all the way down through your organization in how you interact with your members exclaimed Larry. In adding to the think like a business approach many organizations outside the credit union industry will plan for the next six months or less. Many startups today will only provide a two-page business brief rather than a business plan that exceeds 100 pages because today s environment can change very quickly. How s that for a completely different perspective on business I shared with Larry more than once how thoroughly impressed I was with the entire REACH program from the education they imparted to the overall event experience. So of course I can highly recommend attending their next REACH conference in November 2017. But since it s January and we can t wait until the end of the year to jump start our credit union business here are the three top takeaways from the most recent REACH event that Larry and I both agree can improve just about any strategy for 2017 1) Be Data-Centric During the session The Interconnectedness of Google and You Loren Hudziak Solutions Architect for Google- made a number of salient points. They can be summed up in one quote from Loren Data is the key to improving productivity. He offered a humorous story about Google employees and M&Ms that illustrated that very thought perfectly. Rather than detail it here I encourage you to read about it at Time. com by searching for Google Study Gets Employees to Stop Eating So Many M&Ms. The point was that collecting data on M&M consumption allowed Google to understand a hindrance to productivity and act accordingly. Another tip I heard more than once during REACH in one way shape or form is to get data into the hands of the employees that can truly do the most good with it. Often the group of employees with whom the speakers urged to share information is those on the frontline. However I would argue that each employee would benefit from more information on the business of the credit union rather than less. I also add that mentoring on critical thinking is a key element of incorporating a data-centric component in your culture. We already have access to more information than we need. We don t even have to type anymore I can press a button on my phone and ask Google what was the lowest grossing movie in 1992 Or Google how many people live in Braidwood Illinois Or Google which quarterback threw the 47 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M CU TABTRAINING most interceptions throughout his career It doesn t necessarily mean that the data is useful. My point is that we already have plenty of data at our fingertips if we want it. The question is how are we going to use that information to improve some aspect of our business a product efficiency our work experience our margins all of the above. Challenging our employees to use data to come up with those answers is where we will find the value in being data-centric. relationship that has built their business. I suggested that the real challenge isn t simply adding technology to allow members greater access to services but how do we create a Banking on a First Name Basis experience via a smart phone and other devices The fact is that members need to feel like their transaction regardless of the means in which it takes place is a Banking on a First Name Basis transaction. Technology needs to be an enhancement to the overall experience and not a replacement of it. 3) Focus on the Experience To that end it s still all about the overall experience or as Mike Walsh put it finding a way to align technology with the human software that we have in our business. We need to remember that behind everything we do even if it isn t face-to-face there is still a human being at the other end. In some cases it may be a member and in others it may be an employee. As Jay Guilford Creator & Content Strategist for SPARK Session Cirque do Soleil drove home in his panel discussion to lead off REACH 2016 The investment in human capital needs to produce an ROI. That ROI is often seen by fostering an employee experience that results in an exceptional and unique member experience. The idea that happy employees happy members has never been more true than it is today. In my discussion with Larry Palochik he summed up the alignment of data centric mobile driven and a focus on the overall experience perfectly. At the end of the day it s about people. It s people that use technology and it s people that are building the systems to drive that experience. And what it really boils down 48 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 C U B U S I N E S S . C O M 2) Be Mobile Driven By Mobile Driven we re talking about smart phones and hand-held devices not an RV with a built in teller station and an ATM. According to Over half of an average adult s daily internet usage time is spent on mobile devices. Mike Walsh CEO of Tomorrow challenged the audience to ask children how they would expect to access financial services in the future. As he urged everyone to Reimagine reinvent and redesign he suggested that if we had kids draw what a financial transaction may look like in the future we may see some very interesting ideas. I recently applied this idea to the work I was doing with one of my clients COPFCU who I mentioned in a past article. The foundation of their brand culture and strategy is Banking on a First Name Basis. During strategic planning the need for the credit union to become more mobile driven was discussed but also how to not lose the friendly and warm service CU TRAINING TAB to is the member experience. If you re going to offer a high quality very engaging member experience it starts with having a highly engaged culturally-fit organization. So if you want to run a business that offers quality services to a well-defined niche that just so happens to be a credit union it starts with people. The people within your business the people that rely on your business the information on how to improve the experience for the people and the technology that extends and enhances that very experience to the people. REACH for more for your credit union business in 2017 Let s make this happen. It s time... Ken Bator has more than 20 years of experience in helping organizations make money save money and survive internal challenges and tough economic conditions.As a facilitator for training and strategic planning sessions and an expert in brand concept culture building and management Ken has helped hundreds of organizations since 2001. 49 C R E D I T U N II O N U N O N B U S II N E S S B U S N E S S J JAANNUUAARRYY 22 00 11 77 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 TH E O NLY AL L-D IG I TA L A LL-B USINESS RESOURCE F OR CREDIT UNIONS THEY SAY... TIME is We give you more of both. Cummins Allison branch automation technologies have helped thousands of FIs become more efficient. 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 profitable 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