Originally published 9.17 in the CU Times
The term "Kodak Moment" means a situation or event that would be perfect for memorializing with a photograph. This was common vernacular for over 50 years and was eventually trademarked by the Kodak company. Today the phrase can represent the downfall of Kodak due to complacency and myopia. Specifically, how a behemoth of a company worth over $31 billion with over two-thirds of the global market share was brought down by marketplace disruption and filed for bankruptcy protection in 2012.
Kodak was the leading provider of photographic film, supplies, and cameras since they were created by its founder George Eastman in 1888, over 130 years ago. It seems rather obvious in hindsight that the use of cameras and photos was changing. Specifically, digital images were being produced that removed the need for film. More importantly, the photography world changed when digital cameras were merged into mobile phones, and distribution shifted from sharing physical photos to posting them on social media.
Kodak, in their defense, did see these marketplace changes but could not embrace new opportunities and pivot to new business models. Note, the first digital camera was created by a Kodak engineer in 1975, and Kodak did acquire a photo-sharing site called Ofoto in 2001. Unfortunately, they shelved the digital camera due to the price point and complexity of the technology, and they positioned Ofoto as a channel to print more photos rather than share digital ones.
How does this relate to credit unions?
Credit unions are a bit like Kodak. Here are the similarities.
1. Both have been around for a long time.
Some credit unions date back to nearly 100 years
2. Both have been offering the same or similar products since their inception.
Deposit and loan products have been around for a very long time.
3. Both experienced disruption in the marketplace.
Members are changing. Their digital capability is growing exponentially due to these new skills resulting in new expectations of their financial relationships. Members want to know how to use and manage debt, track and receive advice on how to achieve lifestyles, and develop a healthy relationship between money and happiness.
The broader concern here is that the credit union offerings may no longer fit or fulfill their market's needs or intentions.
In his 2016 HBR article about Kodak's downfall, Scott Anthony offers the following three questions an organization should ask as they think about their current state to help them avoid myopia.
What Business are we in today?
The answer is not banking, but perhaps the financial lifestyle coach? The credit union offers the conduit for members to live their best life with their income and debt. To deliver and maintain a healthy relationship between money and happiness.
What new opportunities does disruption open up?
If embedded finance, such as digital payments, by now pay later and others are taking market share, what does that tell us about the member?
It might be saying that members are taking actions to achieve desired lifestyles where digital transactions are ubiquitous, and uniqueness and competitive advantage are in the coaching.
What capabilities do we need to realize these opportunities?
Some new capabilities may be:
Coaching that occurs digitally and in a7/24 experience.
Understanding the financial dreams, aspirations, and feasible member goals from member spend and transaction data.
New success measurements which focus on the benefits of maintaining a healthy relationship with money.
As credit unions head into planning season, now is the perfect time to ask these questions, take a moment to pause and see if they are wearing Kodak blinders, and start making the adjustments needed to embrace new opportunities.
Where can I fill my data knowledge gaps?
With a stop at the
Data Education Center.
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Curious about the output of these classes? Here is a quick summary!
