HENDERSON, Nev.—It’s no secret that this year has been all about omni-channel, self-service member options and anywhere-and-everywhere account opening. Where the secret lies, says Hal Tilbury, is in getting the backoffice in order to deliver these member benefits effectively.
“Tech-savvy consumers want these powerhouse features, and credit unions—which are inherently flexible and always have their eyes on member service—want to offer them,” observed the president and CEO of Bluepoint Solutions.
And what that has meant, said Tilbury, is credit unions becoming engaged in a “long-overdue” cleanup of back-office engines that drive all the new offerings.
“That’s a good sign, because credit unions need to prioritize workflow automation and streamline their business processes in order to set the stage for these expanded services and be prepared for all this new growth,” Tilbury said.
Strong Membership Growth
Tilbury pointed out that CUNA Mutual Group’s latest economic report shows that membership growth for 2015 was 3.5 million.
“A significant increase by any standard. The loan business is booming as well. Low gas prices are boosting new car sales, and credit unions are now financing one in four vehicle loans, a 3.3% increase according to CU Direct,” Tilbury said.
Meanwhile, he added, there will be between 200 to 250 fewer credit unions this year to keep up with all this new business, as industry consolidation continues its 20-year trend.
“The more dynamic credit unions that remain are clearly getting bigger, often operating under new and more demanding charters,” Tilbury said. “They must be able to provide a wider array of services, to a more diverse market—one that has more financial service options, and is spread across a larger geographical area.”
Tilbury likened the way CUs are growing to a small town with a single main street and eight stoplights that suddenly has 5,000 more cars a day using the same infrastructure.
“All of a sudden there are unwanted bottlenecks, creating major inefficiencies,” he said. “What once seemed like smoothly running processes begins experiencing friction from fragmented workflows, manual paper-based processes, and technologies that are just plain obsolete. Each source of friction carries a new burden of risk, increased costs and becomes the next potential point of failure.”
Streamline The Back Office
Tilbury said Bluepoint is beginning to see many credit unions starting to streamline their back offices to allow them to handle more members and more loans.
“We’ve already seen these trends begin to develop in the second quarter of the year and we predict that they will continue through the second half of 2016.”
Tilbury said he sees more CUs increasing their focus on:
- Adopting sophisticated enterprise content management platforms that capture information in all forms beginning at the point of presentment, store the data in a member-centric form, and make it accessible wherever and whenever it is needed—by members, tellers, and decision makers.
- Reducing costs by capturing deposits from every channel and managing automated item processing workflows in-house with integrated fraud detection and storage.
- Integrating or consolidating technologies, with specific attention to how each workflow impacts employee costs and out-of-pocket support expenses.
“Expanding products and services while adding more and more members is a daunting challenge,” concluded Tilbury. “Automating back-office workflow is a crucial part of making this possible, allowing costs to be cut, organizational friction to be reduced, and capacity to be increased. Credit unions that realize this and follow these trends will be better prepared to realize their full growth potential from advanced member services.”