By Ray Birch
MADISON, Wis.–For many CU leaders the focus right now is just on managing through the pandemic, but a few are already thinking beyond it, including envisioning the new types of offerings and delivery channels a changed consumer is already starting to expect, according to one person.
It’s an approach every CU should be taking, according to George Hofheimer, chief knowledge officer at the Filene Research Institute, even though he doesn’t believe many are doing so.
Hofheimer told CUToday.info he is concerned not enough credit unions—even as they do the right things to help stressed members and are stretched thin in doing so—are trying to figure out “what’s next.”
“Credit unions are being very practical about what they can realistically afford to do now, and that is one of the things they are good at,” said Hofheimer. “But sometimes that can be one of their greatest weaknesses.”
Hofheimer is urging more credit union decision-makers to think beyond just meeting the urgent needs of members in the short term and to find the time and resources to look to the future. He emphasized that what should guide the forecasting is a recognition of how the entire process of banking is transforming—particularly around a much faster move to digital channels and away from in-person environments and transactions.
“I have talked with credit union CEOs who are putting together war rooms,” said Hofheimer. “They're getting all their next-generation leaders together and are saying, ‘We’re going to be entering a new world, what do we need to do.’”
The New Game Plan
Hofheimer said most CEOs he has spoken with admit they simply aren’t sure when that new world will actually take shape, they just know it will.
“Whether that's two months or two years, or somewhere between, these CEOs are saying they know they need to begin game planning this out now,” explained Hofheimer. “They are talking about what the new customer experience will look like and how products will change and what new products and services will be needed.”
Hofheimer, who believes banks are doing a much better job of planning for beyond the pandemic, also believes credit unions have advantages over their deep-pocketed competitors in that they can be very nimble and make changes faster than mega-institutions, which often take time to get projects approved and completed.
“Take, for example, the move to a remote work environment for their staff during this crisis,” said Hofheimer. “Most credit unions had not been delving into this area a great deal, with some thinking it would take many months to make such a shift. And here most credit unions converted their workforce to remote in two days.”
Thinking Bigger
George Hofheimer, Filene
But that as a demand in the present environment. Hofheimer reiterated credit union leaders must begin thinking and strategizing in bigger and more challenging terms. For example, he said he has talked to a credit union that is working on an application that would allow a person to use their phone to emulate in-branch discussions via a Skype connection.
“Before, something like this was a nice to have,” said Hofheimer. “Now these types of new products are being fast-tracked. Even the in the vendor community, they're recognizing the need to accelerate a lot of things to address this transformation.”
Hofheimer said his biggest concern for credit unions moving forward into what may likely be a new banking world is their very nature.
“Credit unions are often too conservative in terms of not reacting (to change),” stated Hofheimer, who said Filene data has shown this “time and again. But what we have found over the years is that credit unions that are willing to take some chances always get paid back in spades. I am not suggesting credit unions ignore risk here, but they should not be too concerned about risk in the short term. I think that the opportunity to differentiate yourself is the long-term play here.”
Not Going Back
The long-term play is going to mean getting out of comfort zones and rethinking everything from how employees work to how members are served to the products and services offered to those members, he said.
“I think that after the initial shock of, ‘Oh my gosh, the world is changing,’ and we get into a new normal, my concern is credit unions go back to the old way of operations,” he said. “I would submit that pretty much every industry is not going to go back to the old way of doing things.”