LAKE MARY, Fla.—Is there a lesson for credit unions to be found in Sophocles?
“If there were a book written about what the financial services industry faces today it would be a Greek tragedy. It’s an awfully challenging space to be in,” said Spencer Jones, VP of product management for integrated core at D+H. “With all these battles to fight, you have to think through what businesses you are in and then you have to be very focused on only investing in those things.”
In broader terms, Jones insight is about how credit unions need to evaluate their own strategic direction, and the business lines in which they are competing, when it comes to allocating technology dollars.
As examples, Jones pointed to just some of the difficult decisions facing CUs around deployment of technology funds.
“How are you responding to the demand for digital—Internet and mobile? How are you responding to branch transformation and consumer behavior shifting—are you rethinking the branch network?” said Jones. “Then there are the tools staff use to interact with members, how are you rethinking those? How are you rethinking the experiences you give members—the omni-channel experience? How are you being responsive to changes in the payments space?”
Data Analytics
All of those issues are underpinned with challenges around data analytics, Jones added.
“The credit union has so much data now that without the right analytics tools it can be very difficult to determine what to focus on,” said Jones.
The rapidly changing environment raises the expectations of the staff’s technology skills, Jones said.
“I argue that the most important thing for the credit union today is to have the organizational talent to understand the challenges they are facing,” he said. “If you don’t have that kind of skill today, that is where I recommend you start, building that talent.”
Jones cautioned, too, about relying too much on recommendations of tenured staff.
“Say, from those with 30 years’ experience in banking, you may not get the wisest recommendations for how to invest your technology budget today,” said Jones.
In The Right Biz?
As important as having the right talent to make the best technology decisions, Jones said, is understanding if the credit union should be in the technology business at all.
“If the answer is no, then the credit union should think long and hard about making investments in the data center and IT staff,” said Jones. “Maybe they should have a partner to manage the technology side of the business in the cloud.”
Jones acknowledged that decisions around what lines of business to stay with, get more involved in, or move away from are not easy ones. But he urged credit unions to think carefully, especially with all the new fintech market entrants, making a comparison to what has happened to the taxi industry with the entrance of ride-sharing companies.
“You don’t want to be in a business where some new entrant comes along, sets the price point and consumer expectations, and then all you are left with is managing the FTEs and the overhead,” said Jones.