WESTLAKE, Ohio—One company believes that efficiencies in IT is what will not just keep small credit unions in the game for the long haul–but make them formidable competitors, too.
An executive with Hyland, which provides technology solutions to financial institutions, said she came to that conclusion after watching many small credit unions operate.
Michelle Shapiro, financial services solutions manager, told CUToday.info that it’s a myth that small credit unions are insignificant and can’t compete—and that the biggest reason many will continue on is that their IT teams are not huge. She said that having a smaller, more connected IT team, is what is helping them.
Shapiro’s comments are being offered as part of a CUToday.info series examining “fake news” in credit unions.
“One of the myths we feel exists is that the small credit union can be ignored and not feared by larger competitors,” said Shapiro. “I believe that thinking exists because with the growing demands of consumers today and the large institutions having the larger resources, people naturally think the big organizations will always better meet people’s expanding needs than the smaller guys.”
No Deep Pockets
Noting that credit unions under $100 million comprise about 70% of the movement in numbers, she said that despite not having the deep pockets of the big shops, what the small CU has is speed and a lot less red tape and bureaucracy.
“Small credit unions, we have seen, are much more efficient in using technology across the institution and they don’t have silos,” said Shapiro. “Small credit unions are very good at using technology within their institutions. Their relationships with IT management is second to none, and I say that confidently because we work with so many institutions large and small.”
The larger banks and credit unions employ huge disparate systems, noted Shapiro.
“IT management is headed off in one direction, lending is going another way, branch managers are working on ancillary technology . . . Whereas the smaller credit unions’ IT departments have their hands on all that is happening within the CU,” said Shapiro. “We see them making faster, and more informed and decisions that is helping them thrive and serve their members.”
What Shapiro also sees—and likes—about small credit unions is their quick thinking and lack of fear over IT decisions.
“We also see a little guerilla attitude from the small credit unions, which I think is great,” said Shapiro. “They have done their research and know what works across the credit union and they then go with their gut. Once they do that they move on. They demonstrate really strong system utilization, which I think some of our larger credit unions can definitely learn from.”
Amid discussion that many small credit unions are throwing in the towel and merging due to the growing costs of compliance and IT, Shapiro contends that many mall credit unions continue to fight.
“And I am not sure everyone sees this,” she said. “They are continuing to be in the battle and serve their members and be a vital part of the credit union space. Yes, they face IT challenges, but they are now playing smarter. They know what they do well within their communities and are capitalizing on that.”
Flawed Thinking
Turning to another financial industry “myth,” Shapiro said that it’s flawed thinking that a completely electronic mortgage process is impossible or unobtainable.
“The e-mortgage is something that we have been hearing about for a decade, and many people thought it would happen sooner,” noted Shapiro, who said that the electronic mortgage, in fact, has arrived.
“We see customers who are doing an electronic mortgage, from start to finish,” said Shapiro. “They realize their borrowers live in a connected word and expect the credit union to be in that same place. So we are working with credit unions whose borrowers are beginning the mortgage process online and the entire review process is streamlined through electronic workflows. The actions taking place electronically behind the scenes really move that mortgage to close quickly. And then the credit union brings in e-signature so members don’t have to go to an office and sign countless pieces of paper. We are seeing more institutions implementing this process. The e-mortgage is here and we will continue to see more institutions adopt it.”