ST. PETERSBURG, Fla.–The processing and payments CUSO PSCU is owned by credit unions. Now it’s working to ensure those CUs know it wants to join with them in taking co-ownership of the success of their card programs, as well.
“We have done a lot of things over the past 12 to 18 months to really change and enhance our engagement model around two areas: being credit union-centric, and being collaborative,” explained Mike Williams, SVP-account management with PSCU.
One of the results of those investments is what Williams described as a “more intimate relationship with our “member-owners.”
The company has increased the number of account executives so that the number of CUs each works with individually is smaller. “We ask them to work with these credit unions and get a deep understanding of what the credit union wants to accomplish,” said Williams.
Once a credit union’s goals are identified, the next steps are to align PSCU’s efforts around what “it CAN do for that credit union against what we SHOULD do for that credit union.”
PSCU has been organized around a number of different models since the CUSO’s inception, but it has evolved now to a model in which collaboration is at the forefront. Williams spoke with CUToday.info during the company’s Knockout competition, a 24-hour, collaborative effort in which teams compete to create an idea that PSCU will work to bring to market.
“The idea is to end up with a PSCU/credit union-developed roadmap that has been created together for what we want to do. We also want to be able to measure and track so we can see how good a partner we are being,” Williams said. “We want to align our strategy around theirs, and that has really resonated. We want this to be about them and that gets to collaboration.”
Even Small CUs Can Be 'Progressive and Sophisticated'
Each credit union with which PSCU works is different, Williams said, but nearly all share some commonalities, such as running an active and profitable portfolio that can attract members. Williams said a credit union’s effectiveness with its card portfolio is purely a byproduct of asset size, noting there are many smaller CUs that are “progressive and sophisticated” with their cards.
Williams said PSCU has also made investments on the service side, which Williams described as the operational equivalents of the account executive.
That operational side is led by Jack Lynch, SVP-Operations Services, who said PSCU is striving to make member focus one of its points of differentiation. “I look at that even in the conversion process.”
“The success of any portfolio depends on your product mix and your market competition, plus your ability to promote,” said Williams. “If you look at your product mix first and then how it compares to your market, and then fix (the product), you can take that to the market. If you do all that there is no reason a credit union can not be as competitive as anyone sending something to your mailbox.”
Lynch recalled the trend by some CUs during the financial crisis to sell portfolios to goose bottom lines. Now many of those CUs are looking to become issuers again, and even in a saturated card market are finding they can drive new revenues from cards.
“A lot of credit unions have not taken advantage of being credit unions as much as they should,” said Williams. “An opportunity exists for many CUs to focus more on their portfolios. It’s a better-earning asset. We had a credit union that sold its portfolio and is now restarting their program. They were not getting any data from their partner. They also saw non-members taking advantage of the card and they were getting nothing out of that.”
Added Lynch, “Now credit unions recognize (cards) are about member retention, growth, assets on the book. The ‘supposed’ partner was cross-selling other products.”
Being Competitive With Rewards
Increasingly, competitiveness in cards requires a vibrant rewards program, which Williams acknowledged is “significant to members.”
“Looking at our rewards portfolios we’ve added a lot of functionality, and the signature program is much richer now,” said Williams. “What PSCU has done is look at feedback on rewards and on what is needed to remain competitive. Cus can compete with the Citibanks and Capital Ones.”
Both Williams and Lynch said that merchant-funded rewards have become a must-have, and really enable a credit union to do much more on the debit side.
“It really is about serving members,” said Lynch. “That is our roots and our mission. There is much more of a focus on that. It’s really about executing and making it work for credit unions."