How Credit Unions Can Scale Without Sacrificing the Member-Centric Approach
Last year, credit unions made deals to acquire a record-breaking 22 banks – the highest number in any year. This trend underscores their plans to diversify into business lending and expand their geographical reach.
Supporting this notion, the recent Acquired or Be Acquired conference in January highlighted that M&A activity will likely accelerate this year following the November elections, driven by credit unions' focus on growth and expansion.
Yet the economics related to operating a financial institution remain unchanged. To grow, credit unions must innovate by investing in digital transformation, personalized member experiences, and backroom efficiency improvements to allow for scale. Otherwise, they risk growing at an unsustainable rate that jeopardizes member service.
As credit unions navigate this landscape, optimizing processes for essential tasks, such as printing and sending statements, becomes crucial. By streamlining these operations, they can achieve scalable growth while maintaining high-quality service for their members.
The Challenge of Balancing Growth and Member Service
Credit unions are known for their member-centric approach, often involving personalized service and community engagement. However, as they grow, maintaining this level of service becomes increasingly difficult. Traditional processes, especially in areas like statement and notice delivery, can become bottlenecks, leading to inefficiencies that impact the member experience.
Many credit unions continue to rely on outdated, disparate systems for delivering member statements. These systems often lack synchronization, leading to reporting challenges and increased internal coordination. This is an even bigger challenge for credit unions looking to acquire other institutions, where they must merge processes and systems.
One recent example is $2.5 billion Chartway Credit Union. The Virginia Beach, Va.-based credit union serves over 230,000 members across Virginia, Utah, and Texas. To support its “People First” commitment, the credit union sought to consolidate disparate systems to more efficiently deliver statements and other member communication.
Previously, Chartway faced challenges due to the lack of synchronization between various outsourced systems, hindering reporting and requiring additional internal coordination.
According to Regena Pearce-Lowe, Director of Application Technology at Chartway Credit Union, “We wanted a business partner that would assist us in consolidating our systems for the betterment of our members, allowing us to provide dynamic documents that could be sent through both print and digital channels with ease.”
She added, “The need for our systems to work in a cohesive manner became of growing importance, and we were looking for a business partner who would assist us in solving that while also prioritizing the experience and safety of our members’ information to the extent that we do.”
Recognizing the need for a cohesive solution, Chartway implemented newly designed member statements, notices and credit card statements through a unified platform. This solution provided a single document repository accessible to both members (via online banking) and credit union staff (via an internal interface), streamlining operations and improving efficiency.
The new system also allowed Chartway to redesign its member communications for an enhanced experience. Member statements featured front-page color with targeted messaging and charts to visually display the member's financial well-being. NSF notices were transformed into a double postcard format, reducing material use and postage costs.
Ultimately, Chartway was able to significantly increase internal efficiencies and save the credit union time and resources previously dedicated to statement production – critical for scalable growth – while also improving member communication. This was a true win-win and positioned Chartway to grow without adding time-consuming and costly processes. By streamlining vendors from multiple to one, Chartway also realized exponential cost savings.
Charting a Plan Towards Scalable Growth
For credit unions like Chartway, achieving scalable growth can be achieved by leveraging modern technology, allowing them to stay competitive and meet evolving member demands. Financial institutions are pursuing mergers and acquisitions to combine or tap into added resources and technology that may be challenging to build in-house.
But first, credit unions must assess current operational inefficiencies to achieve scalable growth without sacrificing member service. Outdated processes that hinder growth and negatively impact member experience should be identified. In the case of Chartway, one area was the delivery and digital presentment of statements and notices.
Then, credit unions should seek solutions that consolidate disparate systems, integrating various functions into a single platform for streamlined operations. Embracing transformation through investment in digital tools and technologies can enhance member service, and any operational changes must prioritize and improve the member experience.
Credit unions must also seek strategic partnerships with technology providers that understand their unique needs and can provide tailored solutions that seamlessly integrate with their existing systems. When evaluating potential partners, it’s crucial to consider the vendor’s industry experience, understanding of regulatory requirements, and ability to provide ongoing support. For credit unions with limited internal resources, vendors that provide guidance throughout the integration process and offer robust post-implementation support are particularly valuable.
As credit unions focus on growth, it's paramount that they preserve the member-centric approach that defines them. This requires carefully evaluating existing operational inefficiencies, particularly in areas like statement and notice delivery. By consolidating disparate systems into a unified platform, embracing digital transformation, and prioritizing member experience, credit unions can streamline processes and create meaningful improvements for scalability. Strategic partnerships with technology providers who understand the unique needs of credit unions are essential in achieving seamless integration and sustainable growth, ensuring that as credit unions expand, they continue to provide exceptional service and strengthen member relationships.