GREEN BAY, Wis.—One credit union that has been recognized for outstanding financial performance says a key has been recognizing an organization cannot interject old processes into new technology and expect to succeed.
Doing what has always been done not only does nothing to address consumer and member “friction points,” but it also wastes the time and resources the CU has poured into the new digital solutions, according to Laurie Butz, CEO of the $2.3-billion Capital Credit Union.
“Efficiency has a lot to do with our success,” said Butz. “One of the things that we focus on is business process improvement. Technology provides avenues to reduce friction for the member and the employee, so we're working very hard to optimize the technology that we already have.”
Capital CU has been recognized by Raddon with Crystal Performance Award for CUs with assets above $1 billion. Winning credit unions were selected based on an analysis of key performance metrics focused on service, member relationships, sales and other areas as observed within the Performance Analytics program from Raddon. The winning institutions are among the top 3% of those whose results and metrics are analyzed by Raddon each year, the company said.
The Financials
Capital Credit Union made $26.7 million in net income in 2021 and $ 25.4 million through December of 2022. Net worth is 11.48%, an eye-popping number. Capital CU has also grown loans by more than 26% this year, the CU reported.
Laurie Butz
Butz acknowledged that many credit unions—as did Capital—tend to interject outdated manual processes even as they turn to new digital delivery solutions.
“You cannot maximize the use of a new digital service by placing old processes and procedures into it,” said Butz. “We're working hard to look at every single one of those processes and asking are we doing them in a way that will optimize the technology and, of course, keep the credit union in compliance. But we are looking at ways to remove friction.”
As CUToday.info has extensively reported, credit unions for four consecutive years have fallen behind banks in the American Consumer Satisfaction Index study. Several analysts have stated one of the reasons the perception of CU service has declined in an increasingly remote services market has to do with the lack of ease in CU service channels versus those of other providers.
Access for Employees
Capital Credit Union CFO Lisa Huguet told CUToday.info the credit union has been conducting a careful review of all of its service delivery channels, looking for places in which there may be friction points for members and even employees. Capital CU’s objective isn’t just to remove those points when they are identified, but to also make the experience very similar and seamless no matter what channel is chosen, including face-to-face delivery of services in the branch.
To that end, Huguet explained Capital believes employees must have access to the same digital tools that can speed a member-facing process online, such as a loan application, to assist members when they stop by the branch.
“We want the same frictionless experience when you're sitting at the desk of an MSR,” said Huguet. “Is that process the same as if the member were sitting at home in front of their desktop or iPad, or calling into the call center? We want it to be.”
As organizations become larger, they sometimes tend to throw additional staff at a process, Butz noted.
“But the reality is if we have a process that needs addressing, you must come up with a way to do it that doesn't create a need for more people,” she said. “You have to streamline things and make everything easy for the member and easy for the employee, as well.”
Diversified NII
Beyond the process improvement and investments in technology, another contributor to Capital’s financial performance has been diversification of non-interest income sources. Butz emphasized that for a credit union to succeed it can’t be overly dependent on overdraft revenue, which has been coming under fire from consumer groups and Washington.
“I think our credit union, along with others, is trying to find alternatives to some non-interest income streams,” explained Butz. “We partnered with an organization in the last two years that has conducted an analysis of our fee structure on accounts. As a result, we have been modifying some of our fees while striving to bring more value to our members.”