LAS VEGAS–How did credit unions respond when challenged to “reimagine” some of their biggest challenges and opportunities across topics that included non-interest income, AI, internal processes, growth, and more? With a procession of people lined up to share their ideas, views and more.
During NACUSO’s Reimagine Conference here, back-to-back sessions opened the meeting in which attendees broke up into roundtables to discuss, debate and challenge each other around all the topics listed above, and more.
Afterward, representatives from each table lined up to share what they discussed. Here is some of what was shared:
Attracting A New Generation
“The average age of a credit union member is 55. The average age of an American is 33. What can we do to attract a younger demographic? One of the big takeaways was when it comes to things like grants and scholarships one of our credit unions awards scholarship to junior and senior in local high schools with the stipulation that they then go to other high schools and teach other students. It’s kind of like sharing the gospel of financial literacy.
“Another big take away was the fact that credit unions need to be a little bit more aggressive with their messaging when it comes to the younger generation, a little bit more aggressive with cross-selling and getting their hooks into them at a younger age.”
fingers and hooks in them at a younger age
Generating Growth
“One area we talked about was friction. We make it really hard for people to become members of our credit unions and the application takes so long that the abandonment is high. How can we make this easier and let go of some of our processes?
“We know we want to know all things about our members, but do we have to know all that and is it worth losing them in the process? We shared a great story about one credit union that takes time to really target and engage with one-product members to get to know them.
“There was even discussion about how people get their one product and never heard from their credit union after that.
“How can we remove barriers and just better explain what a credit union is? Is it a union? Does it run your credit score? How do you become a member? How can we eliminate all that and show that we’re financial institution that’s better than the bank?”
Expanding Wallet Share
“ We had a conversation about the importance of really focusing in and dialing in on who your constituency is. Who are your members and what members do you need to focus on?
“At our credit union we focus on churches and, both Catholic and Protestant. and Jewish synagogues. We’ve really identified our market. “It gives us the ability then to speak their language and to speak directly to them, to be able to tell their stories and share their stories with all of their friends and with all of their families.
“What it does is they come back looking for other services. They come for their insurance, they come to us for their warranty products. they come to us for their investments. By expanding their wallet with us we’re just speaking their language.”
Driving Sustainable Member & Business Growth
“We discussed that you can’t let perfection prohibit progress. Stick with your strategy, don’t give up too early, and also educate, educate, educate. Credit unions have great products and services, but we have to continue to educate our members on the great products and services that we offer.”
Artificial Intelligence
“We had a consultant at our table who said what she is hearing credit unions say is either ‘We have no strategy’ or ‘We’ve completely locked down the use of AI.’
“Another great insight here was, hey if we were starting a new credit union today, yes, we would be all in on AI but we have a lot of existing members that are not ready for it. So, we have to manage that.
“Another thing we talked about is the unexpected empathy of AI. A lot of people actually love using ChatGPT and AI because it doesn’t judge them, it feels good to be able to get answers from something that you know is not going to make you feel stupid for not knowing the answer.
“Therefore, as a member service tool that can actually be really helpful and can be a great first impression if it’s a good experience, particularly for a lot of potentially younger members.
“I like this metaphor that somebody said: the roles are kind of shifting to that of a pilot. A pilot today is in the cockpit not so much to fly the plane but to make sure that if something goes wrong there’s some human oversight. “And that’s how a lot of roles are likely going to work in the future with AI: the AI is doing the work but there’s a human there to make sure that nothing goes terribly wrong.”
Overcoming Bandwidth & Decision-Making Challenges
“We discussed how there are so many inefficiencies in our daily lives. Part of that was because of the inordinate amount of time we spend in meetings and responding to emails. dealing with crises that come forward. That was really the challenge, because none of us are really technologists and in a way where we’re building technology to solve for these problems.
“We simply just can’t make all of our needs go away. So, how do you build things in-house? Do you partner with the CUSO? Do you outsource it? The overwhelming consensus was credit unions just don’t have the technology and resources and time, nor the risk appetite to develop technology in-house. You’re certainly not going to build your own core. You need to outsource it or you need to partner with existing players.
“When it came to some of the more challenging things we deal with on a day-to-day basis it was almost universally across two different groups: collecting data and information from members, and getting members to respond to basic requests.
“When it comes to loan underwriting, ultimately that’s what slowed everything down. The fear was is that if we don’t make it easy for the members they’re just going to go somewhere else.
“The comment came up of who are we competing with for members? It’s not other credit unions. It’s banks and non-bank actors that make it easy to apply for services, where maybe we are a little stuck in the past. So, how can we use the new tools and efficiencies to take that to the next level?’
Artificial Intelligence Second Table
“One of the questions we spent a lot of time on was, what haunts you in your sleep when it comes to cyber security, and what allows you to sleep at night?
“We started to talk about AI as a copilot. With the constant emails, the constant meetings and things of that nature, we want to be more quick and communicate to others internally and externally? But how do you do that without deprioritizing things within your inbox or client conversations or just conversations that you have to have with your partners?
“When we think about AI and how fraudsters are getting more creative. we were discussing how we have to continue to iterate on our approaches to things. With recovery options, how much friction do you create within the flow of things to allow your members to feel secure, that someone can’t take advantage of their data or break into their accounts, but also not build too much friction so that they have to do six different types of steps in order to regain their access?”
Driving Sustainable Growth
“One of the big things that came up for us was what’s your niche? What are you really good at in the credit union space? How do you differentiate? How do you stand out when a lot of people are offering some similar things?
And what do you do with direct marketing? Everyone knows e-mail is dead and cold-calling it wasn’t a thing. So, what’s next?
“The next thing was once you get the members, can you retain them? There is a need for consistent and regular training, and understanding the needs of members. You need to bring in the experts smart enough to know what you don’t know.”
Executing on Your Strategy
“Having a strategy is a very big thing and to have a very big thing you need to break it down into much smaller things. So, when you start putting together AI strategies, you need to think of some very finite, small, consumable things where you can get started and figure out how to deal with it from there.
“There are things like governance that you have to deal with, things like adoption. Technology is fairly easy to adopt, but it’s very hard to culturally adopt, so training people and teaching people and bringing them along is very important.
“It’s also important for you to think about how all of these different points start with the user experience first and then work your way backwards. It’s easy to figure out which technology works, but figure out the goal of how you want things to feel.
Dealing With Technology Overload
“Some of the other things we talked about was how there’s the member side of technology, but then internally what do you have for your employees? What’s running your business? We’ve got back office, front office. How are those two things talking to one another.
“You get a solution from a vendor but you need another vendor for a different solution, but they have some of the other solutions, so there’s this overload of partners where you’re not getting all the solutions you need under one umbrella.
“We need some power-users from the member side to tell us how this is working.
“We need your employees to kind of all come together to decide on technology. because you can put the best stuff in place but if you don’t train the employees on how to use it, both sides fail.
Generating Non-Interest Income
“One of the first things we talked about was making old things new again. For instance, we talked about insurance services and credit unions getting into new ways of thinking about wealth management and trying to drive that interest that way.
“We also talked about doing things like looking at your partners. Look around this room and there’s evidence that this is the most collaborative industry in finance in the world. If we leverage that and we have partners that are interested in mutual success, we can find ways to do things like GAP and warranty in a new way.
“The other thing is how are you doing those things in a way that benefits your member and doesn’t alienate them while you to try to drive revenue. The elephant at the table is overdraft income and how are we thinking about that.
“One of the interesting things we said at the table was credit unions don’t know their data.
“Another roadblock we identified was antiquated thinking. Oftentimes, in our industry we want to stay between the lanes. I challenge the group: are you more interested in yours CAMELS core or the revenue you returned to your member? If we start thinking more of the latter instead of the former then we can rethink our industry.”
Demystifying Blockchain & Open Banking
“One of the things we talked about from a roadblock perspective is that it’s not an emerging technology, but it’s still not common to the average person.
“We may understand what a check or a dollar bill is, but do we understand how we use digital currency? I think we’re moving in that direction but I don’t think we’re there yet.
“How do we move people? How we educate them? What’s happening inside of our credit unions to try to move that conversation forward?
“We also talked a little bit about open banking and this idea that open banking creates pitfalls. I don’t believe that to be true. The reality is if we believe that we want to be in the most collaborative financial services space in the world then we should act that way. Open banking then doesn’t create this pitfall where we’re not going to be able to actually succeed; it’s going to create an opportunity where if we come together we will have far greater success.”
