Becoming a Great Sales Coach - The Keys to Successful Credit Union Resilience NICK BROWN - Credit Union Business Magazine
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T H E ON LY A LL-DIGITA L, ALL-B USINESS R ESOUR CE FOR CR ED IT UNIONS
T H E S TA F F I N G I S S U E
MAY 2018 | VOLUME 13 | ISSUE 5
Becoming
a Great
Sales
Coach
NICK BROWN
ALSO IN THIS ISSUE:
The Keys to
Successful
Credit Union
Resilience
GENE FREDRIKSEN
" Click on iPad to watch cartoon"
TABLE OF
TAB
CONTENTS MAY 2018 | VOLUME 13 | ISSUE 5
24
THE ONLY ALL-DIGITAL, ALL-BUSINESS RESOURCE FOR CREDIT UNIONS
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IN ESS T | VOLUM
by
H BUS
JUNE 2014 Keith Kelly
RANC
THE B
Credit Unions Keepin
g Up
All Stars! With Banks for Mobile
The CU (CU Trainin
g)
Paul Nunn ’ Hollis (CFO Curren liance Update)
cy)
Banking Services
by Roy W. Urrico
Emily More rson-Kapke (Comp
Ande
Jennifer Mortgage)
(CU Mobile
Keith Kelly s (CU CEO) Products Per House
James Collin (Lending Solutions)
hold:
son What Does it Mean
Rex John k (CU Content) to
Laura Enoc Dios (CU Outreach)
Miriam De
Your Staff?
Way
by Jack Kelly
The Best nches
Bra
to Build
7 24
ock
is to Kn wn
Do
Thems Collins
UP FRONT PAYMENTS
by Jame
ing
The Chang siness
Bu
Face of
Lending
Sharing is Caring, CU Style In 2018, Credit Unions Need to Meet Their
Enock
by Laura
Kelly
-Kapke, Keith
Anderson
Nunn, Jennifer
Hollis, Paul
Emily Moré
from left: Rex Johnson
Top row
James Collins, Miriam De Dios
Middle row:
Laura Enock,
Tim O’Hara Members Where They Are
Bottom row:
Cyndie Martini
8 IN-BRANCH PRODUCT SALES
Becoming a Great Sales Coach
Nick Brown
28 CFO CURRENCY
The Evolution of Fintech and Alm
Alec Hollis and Michael Oravetz
12 BRAND INITIATIVES
“Member banking is better banking ” ®
32 TECHNOLOGY
Banking Innovations
captures the theme of brand initiative
Randi Marmer Kevin Stehl
16
BRANCH STRATEGIES
Branch Robots and the Hype of Tomorrow
36 LENDING LINE
The Future is One-Click Lending
Can Hold Your Credit Union Back Dave Buerger
Chad Davis
40 PORTFOLIO STRATEGIES
19 OPINION Immediate Investment Portfolio Strategies
Why Bank of America’s Fee Hike is Bad For a Rising Rate Environment: Part One
for Communities, Consumers and the Mark Wickard
Economy
Gabe Krajicek 45 MARKETING MATTERS
Why Do You Have a Website?
22 PEOPLE, PROCESS AND TECHNOLOGY
The Keys to Successful Credit Union
Eric Gagliano
Resilience 47 IN THE NEWS
Credit Union of New Jersey’s
Gene Fredriksen
Spring 2018 Breakfast Club Forum
was a Huge Success!
Murray Halperin
5
C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
ABOUT US
THE ONLY ALL-DIGITAL, ALL-BUSINESS RESOURCE FOR CREDIT UNIONS
PUBLISHING TEAM
Tim O’Hara, Editor & Publisher
tim@cubusiness.com
Kaitlin Morrison, Editor, Branch Business
THE O NLY A LL-DI G I TA L, A LL-BU SI NE SS RE SO U RCE FO R CRE DI T U NI O NS
T H E S TA F F I N G I S S U E
kaitlin@branchbusiness.us MAY 2018 | VOLUME 13 | ISSUE 5
Ashok Kumar, Associate Publisher Becoming
ashok@cubusiness.com
a Great
Patti Manzone, Designer
Sales
Coach
UP FRONT NICK BROWN
Tim O’Hara
IN-BRANCH PRODUCT SALES ALSO IN THIS ISSUE:
Nick Brown The Keys to
BRANCH INITIATIVES Successful
Randi Marmer Credit Union
BRANCH STRATEGIES
Resilience
GENE FREDRIKSEN
Chad Davis
PEOPLE, PROCESS AND TECHNOLOGY
Gene Fredriksen
SUBSCRIPTIONS
OPINION
Gabe Krajicek Credit Union BUSINESS is published monthly
(12 issues per year) by CU Business Magazine,
PAYMENTS Inc. A one-year Digital membership is $75/yr
Cyndie Martini An online membership form is available at
www.cubusiness.com/register.
CFO CURRENCY
Alec Hollis & Michael Oravetz TEAMBUILDER
https://creditunionbusiness.com/the-team-
TECHNOLOGY
builder/
Kevin Stehl
LENDING LINE SALES AND ADVERTISING
Dave Buerger Tim O’Hara, Publisher
tim@cubusiness.com or 561-282-6015 #1
PORTFOLIO STRATEGIES
Mark Wickard CONTACT INFORMATION
MARKETING MATTERS Credit Union BUSINESS Magazine
Eric Gagliano P.O. Box 2223, Palm Beach, FL 33480
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IN THE NEWS tim@cubusiness.com
Murray Halperin
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UP FRO NT BY TIM O’HARA
Sharing is Caring, CU Style
O
ne of the greatest things about credit unions, 4. Gabe Krajicek, CEO of Kasasa, opines on Bank of
in my opinion, is your readiness to work with America’s recent fee hikes and why they’re bad for
other credit unions toward the betterment of the economy.
your memberships. That’s pretty unique in 5. PSCU’s Gene Fredriksen addresses cyber security for
the world of BUSINESS! Cooperation is one credit unions.
of the keys to the continued great success of credit unions 6. Payments expert Cyndie Martini discusses the most
as an industry. up-to-date methods of keeping credit unions current
What I like best about editing CU BUSINESS with member technology.
e-Magazine is being able to hold up best practices that one 7. Investment advisory ALM First’s Alec Hollis and
credit union discovered in order to share with other credit Michael Oravetz discuss financial technology and its
unions. It happens every month. importance for keeping CUs competitive.
The editorial team here at both Credit Union 8. Kevin Stehl , Vice President of Product, Marketing,
BUSINESS and Branch BUSINESS are always on the and Digital at SECU, Maryland’s largest credit union,
lookout for new success stories to share with our growing brings the latest CU technology trends for our review.
audience of 17,000 paid subscribers, the vast majority of 9. One click lending is covered by Dave Buerger,
whom are full-time credit union executives from all parts Chief Executive Officer of CUneXus Solutions, and
of the USA and Canada. member expectations for a seamless lending program.
Every day, I receive terrific information from credit 10. Immediate investment portfolio strategies in a rising
unions. For example, this morning, I received a short rate environment by Oppenheimer’s Mark Wickard.
article from Pelican State Credit Union about the financial 11. Why does your credit union have a website?
education it does for it’s members. You’ll be reading MarketMatch’ executive Eric Gagliano explains.
about it next month. 12. Credit Union of New Jersey’s Breakfast Club Forum
This is a long-winded way to say we welcome editorial – by Murray Halperin.
contributions from our audience of credit union officials
to share their hard-earned knowledge with like-minded That’s a whole lot of good information for credit union
professionals. executives, and we’re always seeking more of it. Please
I hope you’ll invest a few hours to peruse the contents shoot me a line at tim@cubusiness.com if you’ve got
of this digital magazine. Here are one dozen very helpful something to share.
BUSINESS articles to designed to help you run your Thanks for reading!
credit union, which CUB’s mission statement:
Tim
1. In-Branch Product Sales, Nick Brown lays out several
steps to help you become a great sales coach (also PS: If you haven’t watched our new animated video
featured as cover art). describing the highly discounted and richly beneficial
2. TruMark Credit Union’s Randi Marmer give some subscription offer, please click on the iPad pictured on our
terrific ideas about its new branding initiatives, house ad on page two and throughout this issue.
including links to two tv commercials. Thanks, again, for your BUSINESS!
3. Chad Davis of Kronos, predicts that people, not robots
will operate credit union branches and continue the
credit union excellent human touch.
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IN - BRA NC H BY NICK BROWN
PRODU C T S A L E S
Becoming a Great Sales Coach
W
ho is the best coach you have ever
had? For me, it was Hal, my little
league soccer coach. He taught me
how to play the game and how to
love it. But more importantly, Hal
built my confidence and helped me realize my fullest
potential as a little league soccer player.
Great coaches are amazing influences in our
lives; which is why you were likely able to think of
someone quickly. They teach and inspire. They help
us to achieve what we believe is unachievable. Behind
every great sports athlete there is a great coach. Unless
of course, you are LeBron James. The same applies Many of the best coaches, those who help others to
to every credit union sales rep. For sales to thrive at achieve exceptional success in any given area, were at
your credit union and on your credit union teams, there one-time players in their respective industry or craft. In
must be competent sales leadership and consistent order to be a successful coach, you must have a passion
sales coaching. for what you are coaching. You must have a foundation
So how do you become a successful sales coach? to build upon, and you must be able to relate to those
Here are 4 areas you can improve. you are coaching.
To develop into a successful coach, you need to
#1 Sales Coaches Must Have Experience walk the walk and talk the talk. You must understand
A 2016 article published by ABCNews.com titled, how to sell and have success doing it. If you find
“Ranking all 129 college (football) coaches… as yourself in a leadership role over a sales team but have
players”, illustrates that every Division 1 head football limited sales experience, one of the first things you
coach played the game at least at high school level. All need is sales experience. But don’t worry, you do not
but 7 played at the college level. The same holds true have to become an elite salesperson.
for professional sports such as Major League Baseball, The article points out that of the one hundred and
the NBA and the NHL. This is not just a coincidence twenty nine D1 Head Football Coaches, less than ten
and it isn’t unique to just the sports world. head football percent played at the professional level. The message
coach played the game at least at high school level. All here is that a coach doesn’t need to have been an elite
but 7 played at the college level. The same holds true contributor to become a great coach. But elite coaches
for professional sports such as Major League Baseball, were once players.
the NBA and the NHL. This is not just a coincidence
and it isn’t unique to just the sports world.
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IN-BRANCH PRODUCT SALES
#2 Sales Coaches Must Make Time
Coaching is not only an investment of experience in
others, but an investment of time. I often hear sales
leaders tell me that they simply don’t have time to sit
with their teams and provide coaching on a consistent
basis. However, when we sit down and look at where
their time is being invested, we often find a number
of time consuming tasks which can be eliminated or
delegated.
As a leader of a sales team, a top priority,
perhaps the top, is to coach and develop staff. With
this perspective, it is easy to see that allowing your
schedule to be dictated by the next fire that needs to
be put out, or solving other people problems, or a full
email box is simply not effective. As a leader you can
start making time by resisting the urge to respond to #3 Sales Coaches Must Listen
the lower priority tasks which always seem to make the Imagine a coach who never shows up for games. She
loudest noise. justifies this by saying she can simply look at the stats
Next, as a manager and leader you should not be an and the final score of the game and know exactly where
iatrical part of the day to day operations of your team. the team needs improvement. If this situation truly
When you are fulfilling operational activities such as existed, how effective do you think her coaching will
monitoring phone calls, balancing the value and ATM, be? How will her coaching be received by the team?
making schedules, and so forth, you are consuming It’s hard to even imagine someone coaching a sports
time which should be spent coaching. Additionally, team like this, yet it happens all the time on sales teams.
you are depriving your team the opportunity to take on For many sales leaders the preferred method of
responsibilities and develop into leaders themselves. coaching is performance based. This means the coach
To make more time for coaching your team, assess will look at their team’s numbers, including the sales
your day to day functions and delegate as much as in process, and then discuss what needs to be done to
possible. correct those numbers. While performance metrics are
Ideally, a sales leader will make time every day effective for holding salespeople accountable and to
for coaching. This would look like official coaching get a high-level view, they do not tell the whole story.
sessions such as one-on-ones, shadow coaching, The majority of sales coaching should be development
and follow-up meetings. In addition, it’s important based. This kind of coaching can only be done after
for leaders to take time to prepare for coaching and observing employees’ sales conversations with
training opportunities. Because coaching is a top members. Listening is also key. Great sales coaches
priority for sales leaders, enough time should be made will follow-up to review what they have observed with
to effectively lead the team. their team. Rather than jumping in to correct and teach,
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IN-BRANCH PRODUCT SALES
they will ask questions to learn what the salesperson
was thinking and feeling during the member interaction.
After having observed their employee apply what
they have learned in real interactions with members,
and having asked questions to learn more, the coach is
prepared to begin offering guidance.
#4 Sales Coaches Must Be Trainers
Likely, when thinking about an amazing coach in your
life, you thought of someone who empowered you to
become better than you thought was possible. Coaches
lift us up and see in us that we don’t see in ourselves.
In my credit union career, I had two different sales
experiences. My first experience was as a branch
employee. I started as a part time teller. I worked at a
busy branch. The two most important directives were to With continued coaching from my manager, I learned
move members through the line and be sure to balance to overcome objections, sell a wide range of products
at the end of the day. You can probably guess where and services, and even recapture mortgages, of which
my managers invested the bulk of their coaching time. I was quite leery. Within a few months I was a top
Don’t get me wrong, accuracy and speed are important. producing agent amongst others who had much more
However, in a short period time I had mastered both, experience than I. This happened because I was
yet there never seemed to be time for sales coaching. trained, not just on operation, not just on processes and
My second experience happened 3 years later in the regulations, but continually on sales.
credit union’s newly formed outbound call center. I Hal probably doesn’t understand how much of an
applied for the position and came to the interview with impact he made in my life. His coaching and belief in
a great attitude and optimism that I could become a me, the time he spent with our team at practice and
great salesman. The hiring managers must have seen games, and his interest as me as an individual inspired
something promising in me that lead them to believe me to be a better soccer player. One day after practice,
I would be great because they hired me on the spot. I remember Hal talking with my Mom about tryouts for
I remember walking out of the interview wondering a competition league. I asked, “What is competition
what I had just done. league?”. I don’t remember his exact words, but he
From day one my manager took responsibility for turned to me and said something like this, “It’s the next
my development. He taught me the basics of selling level, and it’s time”.
and gave me the information I needed so I wouldn’t As a sales leader you have the opportunity to coach
crash and burn on my first call. Then he handed me the your team up to that next level, whatever it may be.
phone and told me to make my very first sales call ever. Just don’t be upset when the time comes for them to
To say the least, I was a bundle of nervous energy. I move up.
remember he looked at me and said “Nick, I believe http://abcnews.go.com/Sports/ranking-129-college-
in you. You are going to do just fine.” I made the call coaches-players/story?id=37518988
and I made the sale.
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IN-BRANCH PRODUCT SALES
Nick Brown Consulting, established and founded by Nick Brown in 2015, is a
credit union–specific sales training group dedicated to bringing a proactive sales
approach to every credit union. Nick Brown Consulting accomplishes this aim
by providing sales consulting and training to enhance branch sales, outbound
sales and lending center sales. With an emphasis on lending and cross-sales,
Nick’s goal is empowering credit unions to add value in the life of every member
in every interaction. Engage Nick Brown directly at 801-860-5807 or nick@
nickbrownconsulting.com. Ask about his credit union–specific workshops and
online sales training, featured at www.nickbrownconsulting.com.
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BRA NDI NG BY RANDI MARMER
IN ITI ATI VES
“Member banking is better banking®”
captures the theme of brand initiative
I
n a highly competitive and saturated market, to quantify how each attribute could impact members
financial institutions often look for ways to and the organization.
distinguish themselves from the competition. EBA® Analysis revealed TruMark Financial
When TruMark Financial® Credit Union, one of already had a very specific emotional brand advantage
the strongest, most progressive credit unions in over competitors that could be used to effectively attract
Southeastern Pennsylvania set out to create a branding new members. Using this insight, the credit union
initiative, its mission was to do just that --- distinguish marketing team worked with VDLA and developed a
itself from the competition. new brand positioning, target audience profile, and a
Founded in 1939, TruMark Financial is simple yet powerful brand promise: “Member banking
headquartered in Fort Washington, Pa., and has is better banking®.” The advantage the credit union
approximately $2 billion in assets through its 22 had was it already possessed the emotional brand
branches, Member Service Center, and a suite of among its members. The components were already in
innovative online and mobile banking services. place. The next step was to design a strategic plan to
Offering a full range of banking, investing, and communicate the message through the media and other
insurance services to more than 115,000 members in delivery channels.
Southeastern Pennsylvania the credit union receives The new branding initiative aligns with the credit
high praise from its members on member surveys. union’s member-focused philosophy and aims to
TruMark Financial was performing well, member strengthen the credit union’s visibility in Southeastern
satisfaction was high, and the business was growing. Pennsylvania. Everyone knows membership has its
Despite that, management realized there were so many privileges and “Member banking is better banking®”
people living within the credit union’s footprint that captures the theme of the initiative, said Elizabeth
were unaware of the financial services and benefits it Kaspern, TruMark Financial’s senior vice-president,
offered. The branding initiated presented an opportunity chief retail services officer.
to heighten awareness.
TruMark Financial hired branding experts, Van
Deusen & Levitt Associates (VDLA), to conduct
employee interviews, member focus groups, and an
Emotional Brand Analysis® (EBA) – a proprietary
quantitative research technique that uncovers emotional
and rational factors that drive member behavior.
Thirty-two distinct brand attributes were identified and
then measured against actual marketplace performance
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TAB
Mom spot Dad spot
“Consumers that bank with TruMark Financial are At every member touch point, TruMark Financial uses
more than customers, they are members,” said Kaspern. its emotional brand advantage to attract new members,
The frontline staff addresses members by name; deepen existing relationships, and inspire employees
they are not just an account number. The branding to outperform.
initiative communicates what it means to belong to The management team realized the employees
a credit union and the benefits that come along with had to be engaged before rolling out the brand to the
membership. Delivery channels to heighten awareness public. To create excitement and increase engagement
include television and radio commercials, billboards, among employees, the marketing team created posters
and an updated easy-to-navigate website. The branding that were displayed on easels on each floor at its
initiative reaffirms the credit union’s commitment headquarters as well as in the branch work rooms. One
to its members. Humor and a catchy tune set the message said, “Watch for the commercials on April 2.”
commercials apart from the usual financial institutions’ Another said “Member banking is better banking®.”
messages and boast TruMark Financial not only likes Before long employees found themselves walking
a little competition but offers better products than its around saying “Member banking is better banking®,”
competitors. embracing the branding initiative.
The credit union’s senior management team views On April 2, the brand initiative was officially
the branding effort as a way to stand apart from the introduced. At 6:30 a.m. bright-eyed and full of
competition and better reflect the value the credit union enthusiasm, the senior management team greeted the
provides to its members. “It’s an opportunity to educate first employee as she entered the building and offered
consumers about the credit union, its purpose, its her a sweet treat. Each employee was personally greeted
visionary goals, and the benefits of membership,” said and the stage was set for the rest of the day. “Member
Richard F. Stipa, TruMark Financial’s chief executive banking is better banking” resonated throughout the
officer. building as employees donned their new TruMark
Working with supervisors and team leaders Financial polo shirts with “Member banking is better
at TruMark Financial, VDLA also created a banking®” embroidered on the sleeve.
comprehensive brand training curriculum to ensure When employees turned on their computers, the
that all employees could easily and consistently live portal page displayed a graphic with the message, “Our
the new brand promise every day, with every member. enduring idea: Member banking.” There was a wave of
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M250,000 Credit Union Employees
+ 92 Million Members
= 100 Million Miracles
Since 1996, Credit Unions for Kids has raised more than $100 million for Children’s Miracle
Network Hospitals, giving hope and healing to kids in your local community.
YOUR FUNDRAISING DOLLARS IN ACTION:
$ 10
MILLION
1 iMRI machine and surgical suite
$
MILLION
2 1 Cardiac X-ray machine
$ 270
THOUSAND
1 Ultrasound machine
$250
THOUSAND
1 Bone marrow transplant
$ 100
THOUSAND
1 Fully-equipped Giraffe OmiBed incubatorBRANDING INITIATIVES
sponsored include a clothing drive for women returning
to the workplace, a book collection for school-aged
students, and a food drive for local pantries.
As the credit union continues to thrive, it’s
important its members realize “Member banking is
better banking®” because the member belongs to a
financial not-for-profit cooperative. TruMark Financial
continues to grow and has become one of the most
progressive credit unions in the country where its
End title Please note: Click here to view the television employees live the brand and “Member banking is
commercials: www.trumark.com/better better banking® “resonates.
excitement in the air throughout the day as employees
talked about the radio and the television commercials
they heard and saw as they got ready for work that
morning.
To keep the momentum and enthusiasm going,
front-line employees in TruMark Financial’s 22
branches distributed slices of cake decorated with
the message “Member banking is better banking®.”
Members happily shared in the celebration and
expressed their appreciation for the credit union’s
continued commitment. Randi Marmer is the Assistant Vice President
In conjunction with the branding initiative to of Public Relations at TruMark Financial®
increase visibility, the credit union continues to Credit Union in fort Washington, Pa. A seasoned
support its community partners and consumers in communications and marketing professional, she has
Southeastern Pennsylvania, demonstrating the credit more than 25 years of experience in the credit union
union philosophy, “People Helping People.” Some of industry.
the community outreach projects the credit union has
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ST RATEG I ES
Branch Robots and the Hype of
Tomorrow Can Hold Your Credit
Union Back
The raised concerns over a possible downturn in jobs, caused by
robots taking jobs in the branch, has thus far proven to be more hype
than reality. Empty clickbait headlines are the only thing real about
tellers being replaced by robots anytime soon. Instead, people—not
machines—dominate frontline and back-office functions of credit
M
unions.
any great advancements, available Some firms encountered unexpected risk and control
today, serve not as a replacement issues that have tempered adoption of this technology.
for the human component, but as an Quelling concerns about industry job loss is the
enhancement. These innovations are growing realization that financial institutions need not
highlighted in a new white paper choose between embracing technology and supporting
from Kronos, titled, Robots vs. Reality: Innovative their workforce. As the white paper points out, the
Technology for Today, Not Tomorrow. organizations that are likely to do best in the financial
services industry are those that successfully combine
Combining people and technology people and technology. The competitive advantage
It’s true that robotic and intelligent process automation goes to those companies that use their technological
(IPA) is a rapidly advancing field, but relatively few strengths to empower their people by leveraging
financial institutions have ventured into this form technology to optimize their workforce, improve the
of technology thus far. According to a recent PwC customer experience, and ultimately boost their bottom
Financial Services IPA survey, only 9 percent of line.
respondents reported having IPA bots in production.
Committing to breakthrough advancements
Making the financial commitment for breakthrough
technologies can be difficult, given how rapidly the
tech world advances. It’s like trying to jump on a
fast-moving train. Some financial institutions may
be tempted to wait for “the next big thing,” but that
hesitation imposes an inherent risk in falling behind
competitors that have caught the train and are
integrating advanced solutions into their organizations
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today. Forward-thinking companies figure out how
to integrate digital innovations into their physical
channels as a way to enhance the customer experience,
deploying cutting-edge technologies that allow them to
gain competitive advantage in their markets.
Financial institutions looking to upgrade their
technology should begin by creating a flexible
information technology platform. This will help
them shrink development and integration cycles
when implementing new applications or onboarding
third-party services. A flexible platform enhances
the ability to integrate core business systems with an
ever-expanding digital ecosystem using a convenient
software-as-a-service (SaaS) model.
Using open application programming interfaces
(APIs) allows credit unions to keep pace with the
latest innovations in their quest to create new revenue respondents view AI as a means to simplify processes
streams and take on the role of disruptor. A robust and ease their workload.
API and integration platform offers virtually unlimited
extensibility while also simplifying integration. Any discussion of leading-edge technologies must
encompass the continuing need for state-of-the-art
Growing capabilities mobile solutions, which are a big factor for today’s
Other up-and-coming technologies hold the promise on-the-go workforce. Younger workers are especially
to enhance efficiencies and customer service. Artificial likely to choose their employers based on the quality
intelligence (AI), coupled with machine learning, and quantity of the mobile tools they offer.
will likely become more important in relatively short Consumers are likewise on the go, so financial
order. More than half of those responding to PwC’s institutions need to deliver personalized services
2017 Digital IQ Survey report that they are making promptly and efficiently. For example, next-generation
substantial investments in AI, and nearly two-thirds appointment-setting solutions enable customers to
said they will be doing so in the next three years. book appointments in a matter of seconds, using
AI includes such capabilities as advanced geolocation technology right from their smartphones,
forecasting, proactive labor compliance solutions, tablets, or computers.
and personal digital consultants to help frontline Another major technological innovation is the
managers work smarter and more efficiently. One bit use of advanced analytics to guide strategic decisions.
of good news about AI, in comparison to robotics, is Implementing an advanced analytics strategy involves
that financial service employees don’t feel particularly collecting and crunching data and using the resulting
threatened by it. According to a 2018 Coleman Parkes insights to build business processes that allow
Research, Automation and New Technology Study organizations to improve their operations, enhance
conducted on behalf of Kronos, about two-thirds of productivity, accelerate growth, and improve risk
control.
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MBRANCH STRATEGIES
Getting beyond the hype Chad Davis is
Advanced technologies in the financial services sector senior industry
are making a difference today, even as the hype swirls marketing manager,
about robots, quantum hardware, and the Internet of Financial Services
Things. These concepts have yet to hit the mainstream, Practice Group,
and it could be years before they reach their full Kronos, which is
potential. In the meantime, savvy credit unions would a leading provider
do well to focus their technology dollars on solutions of workforce management and human capital
that are already delivering results. Empowering management cloud solutions. Kronos’s industry-
managers and employees with flexibility, convenience, centric workforce applications are purpose-built for
and guided decision making, these commercially financial institutions of all sizes. Chad can be reached
available solutions can help businesses stay ahead of at chad.davis@kronos.com.
the competition.
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MOPI NIO N BY GABE KRAJICEK
Why Bank of America’s Fee Hike is
Bad for Communities, Consumers
and the Economy
B
ank of America’s recent decision to slap
a $12 monthly fee on all accounts with
less than a $1,500 balance is an insult to
consumers across the nation. The charge
applies to customers with an “eBanking”
account, which up until recently, was free for anyone
who didn’t receive paper statements or use bank
tellers. Bank of America has now phased out eBanking
and transferred all its customers to “core checking
accounts” that require them to contribute a direct
deposit of at least $250 a month ($3,000 a year) or keep
a minimum daily balance of at least $1,500 to avoid the
$12 fee.
This greed-driven tactic attacks some of the hardest needed to force Wells Fargo to restructure its top-level
working and most vulnerable people in the country. leadership. But interestingly, the megabanks are so
In fact, a new survey suggests that nearly 70 percent strong that even the Fed Chair didn’t challenge them
of Americans maintain an average checking balance while still a sitting member of the committee.
of less than $1,000. Making this decision even more So it’s not just BofA; it’s not just Wells Fargo.
insulting is the fact that Bank of America is upping Megabanks do not put consumers first. They are not
fees after having recorded a record-high profit of $5.6 committed to the communities they serve. They are not
billion last year. committed to the customers that bank with them. They
But it’s not just Bank of America. Over the are only committed to the stock price and the profit
past seven years, we have seen megabanks make needed to drive it higher. Now I’m not saying that profit
irresponsible lending decisions, get bailed out by is bad, but banking is a trust-based business first. There
the government, and then turn around and charge has to be a balance between profit and good ethics…
consumers more for services and products. As her especially since the five biggest financial institutions
last parting shot, Janet Yellen, the exiting chair of the currently hold 44% of all the industry assets in the
Federal Reserve board of governors, basically said that United States according to recent data.
the actions being witnessed at Wells Fargo indicate There is a dire need to put a stop to the bad behavior
that there is such top-down lack of management of megabanks now, as it severely impacts consumers
oversight that in order to protect consumers, the Fed and the communities they live in. Unlike megabanks,
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MOPINION
community banks and credit unions are committed Last, consumers are more likely to get rewarded for
to their communities, and Bank of America’s blatant their business rather than penalized, as in the case
disregard for consumer well-being has made this the with Bank of America or any other megabank. Let’s
perfect time to highlight the stark contrast between face it, this concept is just too consumer-friendly for
the consumer-friendly policies of credit unions and megabanks’ taste. In general, community banks offer
community banks compared to the predatory practices lower fees than big banks, with 63 percent offering
of the big banks. free checking. They also have lower overdraft fees,
and some community banks are even reimbursing
Here are just a handful of advantages: several, if not all, surcharges at out-of-network ATMs.
First, community banking is an investment in that Additionally, studies show that community financial
community. Studies show that small banks actually institutions also offer, on average, better interest rates
make up 54 percent of small business lending. And as on savings and better terms on credit cards and other
we all know, small businesses are critical to driving loans.
innovation, creating thriving local economies and In contrast, the kind of behavior we’ve seen from
significantly reducing wealth inequality. megabanks time and time again is unacceptable,
Second, consumers get better service, plain and and we – as a collective industry – need to send a
simple. Sixty-four percent of people surveyed in the message that the blatant abuse of power just won’t be
Consumer Banking Insights Study believe community tolerated. These banks have a long-standing history of
banks and credit unions provide better personal service consistently acting in their own self-interest regardless
in any kind of interaction — be it face-to-face, over the of the impact on account holders or the economy at
phone, or online — than big national banks. large. If you are an investor, they are in your corner. If
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MOPINION
not, then they really seem to care less about your well-
being.
There is a petition in response to BofA’s fee hike,
and it is getting some traction. But it won’t work, as
we’ve seen from the past, because BofA will ignore it
long enough to outlast the consumer distaste for their
actions. You can see the petition for yourself at www.
change.org. It’s time to send a real message. We must
hold our financial partners to a higher standard – and
Gabe Krajicek is Chief Executive Officer of Kasasa,
that standard has to indicate that consumers have the
an award-winning financial technology and
right to expect a fair exchange. When a consumer trusts
marketing technology provider. For more information
a financial institution with their income and savings,
on Kasasa, visit www.kasasa.com, or visit them on
that institution should honor them by respecting how
Twitter @Kasasa, @KasasaNews, Facebook, or
hard it is to earn every nickel that goes into the account.
LinkedIn.
It is time to take back banking.
" Click on iPad to watch cartoon"
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MPEOP LE, P RO CE S S BY GENE FREDRIKSEN
& TEC HNO LO GY
The Keys to Successful Credit Union
Resilience
A
chieving a successful cyber security
function at any organization is made up
of the proper combination of elements
that must work in concert to mitigate
organizational risks and ultimately
protect the information entrusted to us. These elements
are People, Process and Technology.
Reaching that balance is not easy, but it is critical
to the success of the organization as it impacts financial
planning and product direction. We must not only
understand the business needs and environment of the
organization, but also the emerging threats facing the
industry. must be highly available, agile and quickly deliverable,
As the credit union industry matures, regulators which requires a balanced approach of People, Process
like the National Credit Union Administration (NCUA) and Technology controls, tied to and commensurate
are coming to the realization that just being safe is with business risk. A robust process that adjusts
not enough to serve members. A couple of years ago, controls as business risk changes will help establish
the Department of Homeland Security introduced the a strong defense program for an organization. When
concept of resilience. Resilience can be defined as the program is constantly evaluated against business
the ability of a business to not just survive but also risk and emerging technical threats, the program will
to thrive in a rapidly changing or potentially caustic remain strong. As always, there are no guarantees
environment. It describes the state of an operation against a breach, but the best defense is a strategic,
wherein members have secure access to the right data, balanced program.
delivered to the right place, when the member needs it. While this is all well and good in theory, when
It encompasses much more than the traditional view of funding and head count are at a premium, what are the
cyber security. ways an organization can positively affect the People,
The speed of new threats is increasing, and the Processes and Technologies in place to support the
potential impact of a single piece of malware continues protection programs?
to grow, which is why the NCUA and other regulators People: Continually train all employees through:
are focusing on resilience. As the pace of threats • Electronic learning
moves more quickly and members expect more from • Instructor-led training
our digital tools, security technology must be agile, not • Department meetings
static as in years past. The security systems of today • Email security reminders
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MTAB
The watchword for the People area is “culture.” When operations team, allowing it to focus on infrastructure
people know what to do and they view it as their enhancements to improve uptime and resilience.
personal responsibility, a culture of security is taking The credit union culture is built on member service
root. Just as with any training, continual messaging excellence that differentiates us in the financial services
and reinforcement are critical. sector. Internally, the focus on resilience and your
Process: Continually enhance security to address People, Processes and Technologies will drive greater
evolving threats. member satisfaction and trust. Externally, successes in
• Security should be designed with a focus these areas will result in greater public trust and give
on segregation of duties across all critical us the opportunity to grow our organizations. PSCU’s
areas, not just to thwart fraud but also to help highly available and secure processes are built to
prevent accidental damage or destruction of enable the success of credit union resiliency efforts for
information assets. nearly 900 Owner credit unions. This partnership is not
• Focus on processes to implement critical just good for individual credit unions; it is critical to
security patches and updates to make systems the success of the credit union industry as a whole.
more resistant to compromise. Patches and
updates are a fact of life. Missing an update Gene Fredriksen is
can open the door to a hacker, which is responsible for several
exactly what happened in the case of the strategic functions
Equifax breach. primarily focused
Technology: Many security product vendors would on relating PSCU’s
have you believe technology can keep you safe. perspective and stance on
Every time a new threat or vulnerability emerges, cyber security to existing
new products also emerge targeted at mitigating the clients, prospective
risk. Implement security technology to facilitate the clients, consultants and
enforcement of required security protocols. the industry as a whole. Gene has over 25 years of
• Select tools that fit into the security information technology experience, with the past
architecture, avoiding standalone systems and 20 focused specifically in the area of information
point solutions wherever possible. security. He joined PSCU in 2013. Since then, he
• Leverage security data to identify risks. has grown the Information Security and Compliance
• Recognize active threats using data and teams and service offerings, implemented advanced
analytical information. tools and processes, and advanced PSCU’s
As an industry, we have chosen to pursue an e-business relationship with numerous partners. Gene has served
and mobile strategy. In a highly competitive e-business on the R&D committee for the Financial Services
environment, resilience is key. These new tools allow Sector Steering Committee of the Department of
our members to access their information 24 hours Homeland Security and is a Distinguished Fellow for
a day, even in times of natural disasters. It takes an the Global Institute for Cybersecurity + Research,
organization leveraging all three areas of People, headquartered at the Kennedy Space Center. He
Process and Technology to achieve resilience while is also the Executive Director for the National
improving operational capabilities. Well-designed, Credit Union Information Sharing and Analysis
resilient solutions will also reduce daily “noise” for the Organization.
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MPAYMENTS BY CYNDIE MARTINI
In 2018, Credit Unions Need to Meet
Their Members Where They Are
C
redit unions are fundamentally different
from most other financial institutions.
For many years, they have served the
unique role of serving local communities,
returning profits to members, offering
competitive loans and financial products, and
supporting local businesses, non-profit institutions and
community asset development.
Times have been good for credit unions. There
has been widespread growth against banks, as new
generations have grown to distrust the banking
industry. At the same time, there is a growing trend
among consumers, particularly millennials, to
support companies that have strong corporate social Currently, the entire financial services industry is
responsibility programs, an area where credit unions, facing a new type of consumer, one that grew up with
with their strong support of local communities, are technology and views its relationship with managing
clearly in line with consumer desires. money as an online affair. Make no mistake, this is a
Most importantly, credit unions have always radical change.
offered superior customer service. In an age when Millennials, the largest demographic of consumers
customer service has largely disappeared from since the baby boom, have a completely different
American commerce, credit unions stand alone in their relationship with their bank or credit union. In short,
ability to treat members with respect. their loyalty is to their debit card, credit card or mobile
However, in 2018, credit unions are facing a app. This demographic rarely enters the bank branch.
critical crossroads between changing demographics, And that’s a problem for credit unions. It’s also an
rapidly evolving technological innovations, and the opportunity.
traditional mandate that credit unions must serve their The problem is credit unions in the small to
local communities. The collision of these issues, and medium size range likely find it hard to have a robust
the tension they create, will continue to challenge card service. Keeping up with radical changes in debit
credit union leadership and growth potential. and credit card technology, and digital issuance, is
As is always true in any changing times, those expensive. Servicing those cards with 24/7 support,
credit unions that find ways to evolve in parallel to new issuance, and troubleshooting, requires more staff.
developments and technologies will be the ones that These increases in operational expenditures take away
survive and thrive. funds from the credit union’s mandate to serve local
communities.
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MUnderstand Your Market
Our Venture. Your Gain.
Member Insight: Advanced Analytics Reporting Tools
Uncover a wealth of knowledge in your data with easy,
point-and-click, ad-hoc reporting. Member Insight solutions
empower credit unions with actionable intelligence that
drives cardholder engagement, satisfaction, and retention.
pscu.com
844.367.7728TAB
PAYMENTS
However, keeping up with those changes is not
negotiable if a credit union wants to remain competitive
and relevant. It is imperative to have strong debit,
credit and digital card services.
In the past, credit unions have taken one of two
roads when it came to card services. They either didn’t
offer a credit card, or they passed off the credit card
servicing to a national brand.
I have spent nearly 30 years in the credit union
industry. I have seen these two mistakes far too often.
And I have seen potential revenue and member growth
walk out the door.
The irony is that credit unions used to be the leaders loyal to the card, not the credit union, credit unions are
in card services, and in some ways still are. Since open to changing.
most credit unions had fewer branches than national It’s my belief that credit unions would be very wise
banks, credit union debit cards had to work harder than to fully reconsider their relationship with debit cards,
debit cards. Credit unions pioneered the surcharge-free credit cards and digital transactions. If credit unions
option at the ATM. In fact, surcharge-free ATM use is can do that, then they are open to new opportunities.
still a prime mover of credit union membership. With a strong card service program, credit unions
Right now, card service is the most important will be adding a new, important source of revenue,
touch point credit unions have with members. That which can be used to enhance community-focused
relationship can’t be underestimated. If members programs. They will attract new members, even
increasingly become loyal to a card, or an app, then members from outside their local service area, since
that relationship must be managed with the same care, new members often search for the best deals and
compassion and service that the member at the teller service online. And credit unions will be recapturing
window. control of the relationship with the member, ensuring
If a credit union cedes its card servicing to a that customer service, the traditional hallmark of credit
national brand, the danger to member loyalty is unions, remains at a level that inspires brand loyalty.
immense. Since national brands service thousands of Changing times call for changing strategies. If
financial institutions, it’s almost certain that a credit credit unions want to evolve and maintain relevance,
union member isn’t getting great customer service. they must focus on what made them unique in the first
Nearly everyone who has dealt with a credit card place, focusing on community and being dedicated to
company on the phone, painfully navigating endless member service.
phone trees, can see the problem for the credit unions. Consider ways to bring stronger card services to
Your brand and your member are out of your hands. your credit union. If you bring it in house, make sure
You, the credit union CEO, are relying on someone that it is properly staffed. If you choose an outside
else’s customer service. In the most important vendor to run your card member services, make sure
transaction with a huge part of your membership, you they have knowledge of the credit union space and are
have dealt yourself out. And with a new generation focused on the unique needs of credit unions.
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MPAYMENTS
TAB
Understand Your Market
Our Venture. Your Gain.
Take advantage of the credit union’s ability to tailor Cyndie Martini is
credit card reward programs specifically for credit the President and
union members, including everything from bumps in CEO of Member
CD rates to donations to local arts programs, or reward Access Pacific, the
programs that huge national bands can’t or won’t make. largest aggregator
I’m not advocating a radical change. I’m suggesting of card services for
that credit unions recognize the needs of a changing credit unions. She
demographic. If the new or future member wishes to has managed and
use a smart phone to access their account, then the directed successful
credit union needs to meet them where they are and credit union card and
want to be. ATM portfolios, marketing programs and business
Times are changing, but human connections are strategies for nearly 30 years. In 1999, Martini
only getting more meaningful. Credit unions have spearheaded Member Access Pacific’s entry into
thrived for years by being dedicated to customer the card payment and ATM processing arena - the
service and community development. Now, it’s time first and only credit union league (Washington
to adapt those same values to the new technologies and Credit Union League) nationally to resell Visa Debit
new touch points favored by new generations. Processing Services (DPS) as a “collectively” priced
card processing solution. Martini has propelled
this business model into one of the nation’s leading
CUSOs while fostering MAP’s relationship with Visa,
Inc. into a premier
ed Analytics Reporting Tools
dge in your data with easy,
Member Insight: Advanced Analytics Reporting Tools
ting. Member Insight
Uncover solutions
a wealth of knowledge in your data with easy,
actionable intelligence
point-and-click,that
ad-hoc reporting. Member Insight solutions
empower
nt, satisfaction, and credit unions with actionable intelligence that
retention.
drives cardholder engagement, satisfaction, and retention.
o learn more.
pscu.com
pscu.com
844.367
844.367.7728
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MCFO C U RRENCY BY ALEC HOLLIS AND MICHAEL ORAVETZ
The Evolution of Fintech and Alm
As financial technology continues to evolve, the need for credit
unions to remain competitive grows by the day. While the unknown
is potentially frightening, adoption of financial technology solutions
can be a successful way to enhance member experience and improve
F
business.
inancial technology, or FinTech, is nothing new to depository institutions. While the buzzword
“FinTech” may have recently become popular, financial technology has been on the minds of
depositories for over 50 years. In fact, a 1962 Federal Reserve bulletin details the growing popularity
of computer-aided automation and related 3rd party services at commercial banks. At the time, almost
half of all banks surveyed reported planned or existing electronic accounting systems, in contrast to
traditional, more laborious processes. “The more things change, the more they stay the same” the saying goes;
today is no different as institutions seek to replace traditional processes with more customer-friendly, efficient
ones. The EFMA, or European Financial Management Association, estimates there are nearly 12,000 FinTech
companies worldwide comprising 18 segments of the financial industry. Until recently, smaller community
banks and credit unions have been left out of the party, as many FinTech companies focused on large and
regional banking partnerships.
Figure 1: The FinTech Universe
FinTech Products
Sector White Label Gold Label Direct
-Offered to Institutions end- -Mix of Direct and While Label -Offered unrelated to
users institution
-Technology developed -Recognized brands -End users entrust service
Description
by FinTech provider, but people seek out, married to directly, understand
branded under institution institutions brand of trust and institution is not involved
credibility
Example CUSO Kasasa or ApplePay PayPal or Venmo
The benefits associated with technological innovation are vast, but many institutions are not prepared to fully
embrace the advantages. According to a 2017 KPMG survey of 160 institutions across the globe, only 46% of
respondents believed their institution had a clear FinTech strategy in place, and 10% indicated that they had
no strategy at all. Ultimately, institutions with a defined plan will be better prepared to separate themselves
amongst the pack and stand to benefit now, and in the future. In many instances, these benefits are closely linked
to one another – let’s examine.
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MCFO CURRENCY
Benefits quality, and transparency are at the top of the
• Enhanced Member Experience priority list for many millennials, who like the
— Perhaps the most intuitive improvement idea of having several service channels.
FinTech can provide is to member services.
— Credit unions should prioritize around their
Whether it be through online or mobile banking
members, rather than individual products or
enhancements such as electronic wallets or mobile
channels. Ease of use, convenience, and an
payment solutions, credit unions must have the
overall good experience are very important, and
ability to meet the ever-changing needs of the
they can help drive a competitive advantage.
member.
— A digital presence is becoming important • Improved Cost Control
for lenders to adequately compete across all — The value chain is rapidly changing for many
product categories. Unlimited access, service institutions, including credit unions. Delivering
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MCFO CURRENCY
Risk and Strategy
While modernization can provide many benefits, the
need to understand and manage the potential trade-
offs should be incorporated into the credit union’s
enterprise risk management plan. Below are issues to
consider:
• Third-party Risk Management
— In the Fall 2017 Semi-annual Risk Prospective
published by the Office of the Comptroller
of the Currency (OCC), third party risk
management remains top-of-mind. Depositories
are becoming increasingly reliant on third party
service providers to support key operations.
services more cost effectively and improving Consolidation amongst providers within the
back-office efficiency can reduce bloated cost financial services industry continues to worsen
structures and add to the bottom line. the problem.
— Non-physical channels can help streamline and — This means that an increasingly smaller group
improve operations. Often a vast branch network is providing critical operations, which could
is costly to maintain, whereas maintenance of create concentrated points of failure and
online channels can be more cost effective. potentially create systemic risk within the
financial services industry.
• Improved/Expanded Capabilities
— Improving or expanding the institutions • Strategy and Integration
capabilities is an additional benefit commonly — As we’ve already touched on, many institutions,
associated with the implementation of FinTech including credit unions, do not have a defined
solutions. For example, online loan and deposit technology strategy. While there is not a
origination can allow credit unions to reach proverbial “once size fits all” strategy, the
untapped markets and expand product lines. following can help in assessing the need for
direct investment or partnership:
— On the lending side, online portals can now • Strategic initiatives and objectives of the
efficiently sift through loan applications technology
based on pre-arranged credit criteria, reducing
underwriting costs and decision time. Deposit • Understand current operations and business
gathering functions can also be improved by cycles
increasing website traffic, allowing for more • Determine level of institution-wide adoption
effective deposit targeting based on certain
member specifications.
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C R E D I T U N I O N B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O MYou can also read
