In today's technology-driven world, where does a mature industry like credit unions find its place?
Middleware. Middleware is the software that lies between an operating system and the applications that run on it. It traditionally functions as a hidden layer that enables the operating system to communicate with the applications to run smoothly.
If the member is the operating system and the applications are homes, cars, travel, play, retirement, and rainy day savings, then a credit union is the middleware. Credit unions are the conduit to the member's financial needs by providing mortgages to acquire homes, auto loans to acquire vehicles, credit cards for travel/play needs, and short-term and long-term deposit products for retirement and rainy day savings.
The advantage of middleware is that it allows all the applications to run efficiently and effectively. For example, if one application were to go down, the middleware keeps all the other applications functioning.
Here are two strategic actions a credit union can take to leverage its middleware advantage
Strategic Action #1: Strengthen efficiencies and effectiveness
The single most effective way to improve efficiency is to identify and reduce member friction. The following a high-level framework to accomplish this.
Map the MUX (Member User Experience)
A credit union can map the Member user experience with software or a simple process map. The key points are to identify critical phases in the member journey and identify the friction points.
Add any data as is available to each phase that either supports or refutes the perceptions.
Member/Customer Friction examples
Members may encounter friction along the journey. In this auto purchase example, common frictions are 1) low awareness of credit union financing in channels they use. 2 ) few or non-existing evaluation tools provided by credit unions, 3) challenging to engage online for the loan, must come to a physical office. 4) little or no engagement with the member post-purchase. 5) few channels are provided for advocacy. 6) repurchase efforts suffer from the application process.
Analyze your findings.
A list of frictions will appear, and they need to be prioritized. The best lens to prioritize is to ask the question, "What will have the most significant impact on the member with minimal effort?" The answers will generate a "friction list." The list can be divided into short and long-term projects. Don't forget the data needed to gain insights to reduce the friction.
Build Friction Roadmap
Build out the road map looking at it from the timeline with work streams that include people, products, and processes.
Strategic Action #2 Build Member Center's of excellence
In the business environment, Centers of Excellence (CoE) formally bring organizational strengths together to build a competency—in this case, member excellence.
A center of excellence is a (typically small) team of dedicated experts managed from a common central point. A CoE is not a new department nor carries a P/L responsibility.
The CoE is the team leading the exploration and adoption of new tools, techniques, or practices. Meeting cadence/time varies but is often quick and action-oriented.
The benefits of creating MCoE are powerful and impactful.
Act as a new organizational approach to prioritize and facilitate successful delivery of member experiences initiatives.
Prioritize member needs across individual teams and provide a consistent member experience across the value chain.
Leverage knowledge cross-functionally.
Effectively deliver resources across the credit union to efficiently and effectively deliver member value.
Strategically thinking about a credit union in terms of technology will create new insights and ideally new ways to increase the value delivered to the member. This may not be easy and may feel uncomfortable, but most accomplishments are traditionally hard and slightly painful.
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