Skip to main content

The Seven Steps to Becoming an Innovative Credit Union

 


By rich@leading2leadership.com | December 1, 2023

As the financial landscape evolves and becomes disrupted, credit unions face the challenge of staying relevant. To maintain relevancy, innovation becomes a must-have if the organization is to meet the changing needs of its members. Embracing innovation is vital for credit unions to thrive. But innovation, for innovation’s sake, is not helpful. All innovation must focus on offering members a memorable and personalized experience. This article will explore the seven steps for credit unions to become innovative.

  1. Member-Centric Approach, Understanding the Member’s Needs:

Everything a credit union does must begin with the member in mind. Understanding the member’s life journey needs, with an eye on their preferences and pain points, is critical. This deep understanding of members should be the driving impetus for all innovation. This member-centric approach ensures that innovations directly address the challenges credit union members face. A significant part of innovation is understanding how to leverage technology to personalize services. Consider using AI-driven chatbots and machine learning for customer support and loan approvals while creating a seamless, user-friendly experience across all channels.

2. Foster a Culture of Innovation:

Fostering a culture that encourages creativity and innovation is paramount. This involves empowering employees at all levels to share ideas, experiment with new approaches, promote creativity and risk-taking, and embrace a mindset that values continuous improvement. Create a work environment where collaboration and communication are valued and employees feel safe sharing innovative thoughts. Cross-functional teams and innovation labs can provide dedicated spaces for brainstorming and testing new concepts.

A vital element of innovation is a culture that embraces diversity of thoughts, ideas, and experiences. Educate staff about the importance of diversity in thinking and how diversity positively impacts innovation and well-being.

3. Embrace Technology:

Innovation in the digital age is synonymous with technological advancement. Credit unions should invest in cutting-edge technologies to enhance member experience, streamline operations, and stay competitive. A credit union may have to consider a transition from legacy systems to more agile and scalable platforms. This includes adopting cloud computing, upgrading cybersecurity measures, and integrating APIs for smoother data exchange with third-party services. This includes improving mobile apps, online banking services, and tools used in call centers and branches. Today, credit unions must explore emerging technologies like distributed ledgers (blockchain) for secure and efficient transactions, money movement, and authentications.

Credit unions should focus on streamlining operations, enhancing member services, and improving efficiency by staying abreast and investing in the latest technologies and tools.  A digital-first/mobile-first strategy is essential to meeting the expectations of today’s tech-savvy members.

4. Collaborate with Vendors, Other Credit Unions, and FinTech:

A core principle of credit unions is collaboration. Collaborating with other credit unions, vendors, and fintech companies can open up new potential for innovation. Fintech firms are often at the forefront of advancements, and partnerships can provide credit unions with access to innovative solutions without significant in-house development. When credit unions and vendors collaborate, finTech collaboration can be magnified with fresh perspectives and expertise. This climate of cooperation can result in mutually beneficial relationships that enhance the financial ecosystem. Building this collaborative ecosystem can accelerate the credit union’s ability to adapt to changing market dynamics.

5. Invest in Data Analytics:

Data is a crucial driver of innovation. Credit unions need to know, through data, what members are doing, what they aren’t doing, what they are missing, and what they need. This data-centric approach to innovation will also help the credit union know when an innovation is working and, if not, why. But the ecosystem around data is very complicated. Most credit unions have over 30 third-party data sources that use proprietary reporting systems, nomenclature, queries, report timing, and APIs. Credit unions should invest in robust data systems to normalize and govern the critical data before it will yield insights into member behavior, preferences, and trends the organization needs. Insufficient data will only yield wrong insights and decisions. By leveraging a governed and analytic discipline, credit unions can personalize offerings, detect patterns, make informed decisions, and safely deploy AI decisions and machine learning, effectively contributing to their overall innovation strategy.

6. Personalization and Niche Building is Vital:

One size does not fit all when it comes to financial services. All credit unions should focus on using innovation to tailor their offerings to meet the unique needs of individual members. This need for personalization may be more significant for smaller credit unions. Small credit unions cannot compete in the open financial services market with the big players’ tools, applications, and access choices. Therefore, innovation becomes their lifeline to sustainability. Using Design Thinking and Innovation, small credit unions can identify market niches not served by the “big guys.” By innovating product solutions and access methodologies, these small credit unions can learn to serve this niche and build a franchise that is very difficult to replicate. This can include personalized savings plans, targeted lending products, focused marketing, product bundling, and applications and tools for access and money management. This personalized approach builds member loyalty and sets credit unions apart from larger, more impersonal financial institutions.

7. Make your Innovation Sustainable:

Ensure innovation aligns with the credit union’s core values and long-term goals. Seek solutions that meet immediate needs and contribute to sustainable growth and positive social impact. Sustainable innovation considers environmental, social, and governance (ESG) factors.

Becoming an innovative credit union requires a holistic, strategic, and proactive approach encompassing technology, culture, collaboration, and a deep understanding of member needs. Credit unions can position themselves as dynamic and forward-thinking financial institutions by fostering a culture of innovation and staying adaptable to changes that serve the members and the organization. Ultimately, the goal is to create an environment where members feel supported and excited about the financial opportunities their credit union provides.

Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

Syracuse Fire Department Credit Union

Remember, you're not alone with  NCOFCU.org Join/Upgrade Check out some of NCOFCU's additional features: First Responder Credit Union Academy Financial Literacy Podcasts YouTube Mini's Blog Job Board
Post a Comment
Read Complete Article HERE>»

Happy Holidays To All Who Serve

  Happy Holidays To All Who Serve 12/22/2025 10:28 am   By Grant Sheehan and Anthony Hernandez Every year, many Americans celebrate the joy of family and relief from work the holidays bring. Apart from the hustle and bustle, the holiday season is a special time to be with loved ones, engaging in family traditions and rituals, and making memories that will last a lifetime. However, not everyone gets to partake in the holiday gatherings.   There are over a hundred thousand military members serving in harm’s way or in 24-hour command center...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - The gold standard, explained

  Gold Standard       The gold standard, explained A gold standard is a system where a country’s currency is pegged to, and can be converted into, a fixed amount of gold. It’s typically meant to create a sense of security in the country’s currency: When a government uses a gold standard , its currency can be exchanged for an equivalent amount of gold—although regulations around redemption vary by country.   After the Civil War, in 1873, America adopted the gold standard for the first time. At the time, if gold was priced at $100 an ounce, each dollar  rep...
Post a Comment
Read Complete Article HERE>»

Is another housing bubble brewing?

While there have been fears expressed by some of a repeat of the housing bubble that led to the housing crisis just over a decade ago, numerous real estate analysts say they believe the market fundamentals are much stronger now and that the sharp increase in home prices reflects low rates, a lack of inventory, and demographics. To be sure, the market is hot in many markets, with home sellers receiving multiple cash offers, often over the listed price, on homes. Some analysts, including those at Swiss banking giant UBS, have published charts showing how home prices are outstripping both wages and rents, reported USA Today. Home prices have appreciated more than 60% since November 2012, incomes have only appreciated by 20% and rents by 30% over the same time period, the report added. “But unlike the real estate boom that led to the Great Recession, this nationwide price spike is not being fueled by a wholesale collapse in lender ethics,” USA Today reported “There aren't any low-doc o...
Post a Comment
Read Complete Article HERE>»

NAFCU Economist: U.S. Might Dodge Recession

Curt Long said a strong jobs report shows resilience despite the Fed’s escalation in interest rates. By Jim DuPlessis | January 06, 2023 CUTimes Source: Shutterstock. NAFCU Chief Economist Curt Long said Friday the continued strength in the job market has increased the odds the nation will dodge a recession this year. The U.S. Bureau of Labor Statistics reported Friday there were 153.7 million seasonally adjusted jobs in December, an increase of 223,000, or 0.1%, from November and up 3% from a year earlier. The unemployment rate was 3.5% in December, down from 3.6% in November and 3.9% in December 2021. Long said December’s rate was the lowest in more than 50 years, while the labor force participation rate rose slightly. Seasonally adjusted average hourly earnings were $32.82 in December, up 0.3% from November and up 4.6% from a year ago, a slightly lower rate of increase from previous months. Curt Long “This is an unambiguously positiv...
Post a Comment
Read Complete Article HERE>»

Mortgage Rates Decline to Their Lowest Levels Since April

WASHINGTON–Mortgage rates fell last week to their lowest level since early April. According to Freddie Mac, the standard 30-year fixed-rate mortgage averaged 6.87% in the week ending June 20, which was down from the prior week’s 6.95% average and marks the third consecutive weekly decline. Rates are down from a 2024 peak of 7.22%. “Mortgage rates fell for the third straight week following signs of cooling inflation and market expectations of a future Federal Reserve rate cut,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “These lower mortgage rates coupled with the gradually improving housing supply bodes well for the housing market.” Most economists and forecasters expect rates ...
Post a Comment
Read Complete Article HERE>»

NCOFCU is working hard for you! Coalition of CU Groups Sends Letter to Congress on Tax Exemption

Take Action Coalition of CU Groups Sends Letter to Congress on Tax Exemption May 1, 2025 10:15 am No Comments WASHINGTON–A coalition of credit union organizations has sent a joint letter to Congress in support of the credit union tax exemption. As the CU Daily has been regularly reporting, credit unions are especially  concerned this year that Congress might revoke the tax exemption as it seeks ways to pay for expiring provisions of the 2017 tax cuts, which President Trump wants to see renewed. Sending the letter to Congress were the Defense Credit Union Council (DCUC), America’s Credit Unions (ACU), Credit Union Executive Society (CUES), National Association of Credit Union Chairs (NACUC), National Credit Union Management Association (NCUMA), Inclusiv, TruStage, Earnest Consulting Group (ECG), Callahan and Associates, National Council of Firefighter Credit Unions (NCOFCU), Metropolitan Area Credit Union Management Association (MACUMA), Association of Credit Union Audit and Ri...
Post a Comment
Read Complete Article HERE>»

Home Sales Rise "BUT" This represents a 2.3% decrease in sales versus a year ago.

ARLINGTON, Va.—Existing home sales rose 7% in September to a seasonally adjusted annual rate of 6.29 million units. This represents a 2.3% decrease in sales versus a year ago. NAFCU's Curt Long noted “existing home sales rose on the month to the highest level since January." "Housing starts fell 1.6% on the month while permits are down 7.7%, but the pipeline of construction is still full with backlogs near a 15-year high," said Long, NAFCU's chief economist and vice president of research. "Until they can catch up, home-builders will limit their sales as they battle labor and material shortages." Sales rose in all four regions this month. The South saw the largest rise, gaining 8.6% on the month, followed by the West (+6.5%), Northeast (+5.5%), and Midwest (+5.1%). Versus a year ago, sales were down in all regions. The median existing home price declined from $356,700 in August to $352,800 in September (not seasonally adjusted). That is a 13.3% increas...
Post a Comment
Read Complete Article HERE>»

MBA Lowers Mortgage Outlook Through 2023 - The 30-year fixed-rate exceed the 5% mark at 5.13% — the highest since November 2018.

Existing home purchases are likely to fall this year, but higher prices will cause originations to rise slightly. The Mortgage Bankers Association on Wednesday lowered its forecast for both refinance and purchase originations this year and next as interest rates rise faster than it anticipated and expectations rise for more aggressive actions by the Fed to curb inflation. MBA Chief Economist Mike Fratantoni said mortgage rates have risen by more than 1.5 percentage points since Jan. 1. “This rapid increase in rates, caused by a much more rapid pace of rate hikes and balance sheet reduction from the Federal Reserve, is in response to the booming job market and inflation being at a 40-year high,” Fratantoni said. “The jump in mortgage rates will slow the housing market and further reduce refinance demand the rest of this year.” Also on Wednesday, the MBA reported the fifth consecutive drop in its Weekly Mortgage Applications Survey. The number of applications in the week en...
Post a Comment
Read Complete Article HERE>»

Email and Text Message Etiquette

As we navigate our everyday communications, I want to emphasize the importance of practicing good email and text message etiquette. This enhances clarity and ensures that everyone feels respected and valued in our interactions. Email Etiquette: 1. Use a Clear Subject Line: A subject line that accurately reflects the content of your email will help recipients know what to expect. 2. Greet Appropriately: Start with an appropriate greeting, such as "Dear [Name]", "Hello [Name]," or "Hi [Name], which sets a positive tone. 3. Acknowledge Receipt: If you receive an email that requires a response, action, or information, please acknowledge its receipt. A simple reply confirming that you have received the email helps the sender know their message was received and provides an opportunity to clarify expectations. 4. Be Concise: Keep your emails clear and to the point. Avoid excessive details unless necessary. 5. Professional Language: Use respectful and professional l...
Post a Comment
Read Complete Article HERE>»