Posted by Mr. Dean Borland, SCMS, CUDE, VP Product Development, Credit Union Resources, Inc on 8/28/2015

Over my past few posts, I have tried to make a case for membership growth as a credit union strategic imperative, especially targeting Millennials, born between 1981 and 2000 (ages 15 to 34). I cited a March 2014 Pew Research Center study titled “Millennials in Adulthood: Detached from Institutions, Networked with Friends,” and SIX insights from the study that might be useful to credit unions seeking to attract Millennials.

  1. Millennials are less attached to traditional political and religious institutions than previous generations, but they are “digital natives,” connected to personal networks of friends, colleagues and affinity groups through social and digital media.
  2. Millennials are burdened by financial hardship, but they are optimistic about the future.
  3. Only 26% of Millennials are married – they would like to be married, but they want a solid economic foundation before building a family.
  4. Millennials are America’s most racially diverse generation.
  5. Millennials are generally mistrustful of people, but they have a more favorable view of business and are more upbeat about America’s future than past generations.
  6. Few Millennials believe Social Security will provide them with full benefits when they are ready to retire.

What do these insights have to do with credit unions? Everything! Credit unions NEED Millennials if they are going to grow and prosper. To attract new members from the Millennial generation, credit unions must create value in products, services, and messaging (marketing) to appeal to Millennials’ preferences while avoiding things they might find distasteful.

  1. Millennials are “digital natives,” connected to personal networks of friends, colleagues and affinity groups through social and digital media. Like it or not, to capture the attention of Millennials, credit unions will need to have a strong “social media presence.” HINT: Millennials are very reliant on their technology. Successful credit unions will have specific social media and mobility strategies. Hire a Millennial to run your social media initiative, do not rely on a Baby Boomer to get it done for you. Convenience, not social responsibility, drives Millennials’ technology preferences. Forget green; go for “easy.”
  2. Millennials are buried by student loan debt. Consider whether a student loan restructuring program is possible and help Millennials build a solid foundation through financial education. HINT: Millennials may not attend an evening workshop, even if you bait them with pizza. Consider how financial education can be imbedded into product and service offerings as well as social media.
  3. Millennials are not “marrying-up” like previous generations. They probably will, but they will have to be gainfully employed before it happens. After marriage, Millennials will likely build households just like the generations they follow, but the cycle was delayed by the effects of the Great Recession – their prime borrowing years will be later in life.
  4. Millennials are racially diverse, suggesting there will be a variety of ethnic influences relating to heads of household and household decision-making. Be sensitive to who in the household is responsible for making financial decisions. It generally takes a couple of generations for immigrant families to assimilate culturally.
  5. Millennials are generally mistrustful of people but have a favorable view of business and are optimistic for the future. Trust is a basic imperative for credit union success. ALWAYS demonstrate that you have the member’s best interests in mind. Be open, honest, and transparent.
  6. Most Millennials don’t’ believe they will get full benefits from Social Security. As a result, they may be more conscientious about saving for retirement than their Baby Boomer parents, especially when they realize that their parents spent the inheritance for which they are hoping. Again, provide financial education with an option for wealth management might be in order.

Most credit unions do not have the scale to be “everything to everybody.” I often refer to credit unions, particularly small credit unions, as “boutiques.” Retail boutiques cannot compete with the depth and breadth of products department stores offer; but they can thrive on specialty products and services that make them stand out to a specific market segment. I believe small credit unions should consider themselves as financial boutiques, with clearly defined specialties delivered to their own target market. Millennials will likely be targets of successful credit unions in the future. The challenge is to DEFINE YOUR NICHE, CREATE A VALUE PROPOSITION and DELIVER ON YOUR PROMISE. 

If you need assistance with Strategic Planning, Succession Planning, policy development or board member education, OnBalance is here to help.  To learn more about all of the products and services we offer visit us at or contact Karen Houston-Johnson at, Howard Bufe at or Dean Borland at

Categories: Succession Planning
Posted by Vicky Salkeld, Vice President of Sales, Credit Union Resources, Inc on 8/26/2015

The kids are back in school. They will be eating Halloween candy in 66 days – and opening Christmas presents in 120 days! I don’t know about you, but for me, every year seems to fly by a little faster than the one before. It seems that we just started 2015 and now we are over hallway through the third quarter. This time of the year is the most popular for credit union conducting their strategic planning sessions. We review the successes (and sometimes not-so-successful attempts) of the past and make plans for the future. There is much information to be gathered and considered in preparation for this important process. One of the most valuable strategic planning resources available to credit unions is CUNA’s Environmental Scan. The 2015-16 edition has been released. This report provides insight into the many areas affecting the strategic planning process. It gives data and analysis of the topics that must be considered in preparing for the future. The following is a brief overview of the top trends identified in this year’s report.

A Mobile Ecosystem

Young members grew up digital and expect to use this technology in the future – for nearly everything. A mobile ecosystem will enable members to move their money via their devices in a variety of ways, such as online bill pay, person-to-person payments, and mobile deposits. Growth of these payments streams isn’t slowing down. E-commerce payments in general will grow 15% year-over-year, and person-to-person payments will increase nearly 50%. Last year alone mobile payments grew nearly 70%.

Apple Pay

Apple’s digital wallet solution, announced in September, 2014 will be seen as a watershed moment in the payments world. It could signal widespread adoption of mobile point-of-sale payments, expected to increase exponentially in the next five years. Within months of Apple Pay’s arrival, Google revamped its wallet and also released Android Pay.

As credit unions battle for their cards to be “top of device” and “top of wallet,” consumers and merchants will decide the payment methods they prefer and which technologies win out. Consumers focus on what is in their cart and how fast they can receive service. Merchants want more sales and lower expenses. Credit unions must develop payment systems strategies to maximize their success.

The Improving Economy

Expect the momentum from 2014’s rosy economic results – positive job growth, low inflation, an improved housing market – to continue through 2016. Members’ balance sheets are improving as well.

Credit unions should prepare for even stronger loan growth, which should offset the impact of these rising rates.

CUNA economist Mike Schenk says to look to what’s on the horizon:

  • Improving credit risk. Credit quality will improve modestly this year and next. The improving job market and fast loan growth will push delinquencies down from 0.85% at the start of this year to an average of 0.75% in 2016. Net charge-offs also will decline.
  • Higher liquidity risk. Loan-to-savings ratios continued to rise last year, finishing the year at 75%. CUNA’s baseline forecast expects this ratio to approach 85% by year end 2016.

Millennials and the CU Brand

Credit unions continue to have a “millennial” problem. They’re your future savers and borrowers – but 71% have little or no knowledge of credit unions. The good news is that millennials also distrust banks. For more than a century, credit unions have fought hard for the underserved by putting people first.  Take the same approach with this group. Identify their needs, and work on building trusting relationships with them.

High-Performing Leadership Teams

Payroll is a mission-critical investment. Employee engagement remains low, and many managers spend their time focusing on issues not critical to the organization’s success. By continually identifying and developing star employees, credit unions can create a powerful team. This is one approach that will improve productivity and provide a critical competitive advantage.

Business Intelligence

Credit unions are beginning to expand and increase their use of the ever-increasing volume of available data. That’s due to the rapid expansion of mobile computing and wireless networks. Available data includes transactional data credit unions have through their core systems, as well as social media and other public information. Credit unions are using this information to manage, decipher, and react to consumer behavior.

Member Advocacy

CUNA’s Member Activation Program reveals that involving members in advocacy can lead to increased member loyalty and higher wallet share.

Credit union members in focus groups tell CUNA it is their credit union’s responsibility to inform them – as owners of their cooperative – of legislative and regulatory issues that affect the institution’s success.

The research shows lawmakers that millions of members – who also represent voters and constituents – will fight on credit unions’ behalf if issues such as taxation, the excessive regulatory burden, and expensive merchant data breaches threaten the credit union value proposition.


That’s the one word dominating examiners’ thinking. With interest rates expected to rise soon, examiners want to see how you’ll respond. They’ll be focusing on what NCUA refers to as “indicators of complexity,” referring to the types of businesses you engage in.

Credit unions can read more about examiners’ priorities in evaluating safety and soundness by reviewing NCUA’s annual Letter to Credit Unions No. 15-CU-01. And pay close attention to the agency’s final rule on risk-based capital, expected later this year.

Lending Disruptors

Expect to see the same amount of disruption to your credit union’s lending processes as the industry has seen with payments. PayPal now offers consumer lines of credit to buyers and sellers on eBay – and directly to consumers at Home Depot stores. It’s a growing trend where loans are processed and approved quickly, when and where members want them.

Use your proprietary member data to voluntarily disrupt your loan processes, or risk being disrupted by current competitors or new, nontraditional lenders. Also identify barriers in your credit union’s lending processes and ways to make loans more convenient for member who need them.

Cyberthreats and IT Security

More data breaches seem inevitable. Stay vigilant and look for new system vulnerabilities and increasingly sophisticated malware. Strengthen your information security position with increased agility and faster reaction times to emerging threats.

Keep in mind that regulators don’t believe financial institutions are doing enough to protect data and recover from intrusions. As a result, NCUA will “redouble efforts” to ensure credit unions have comprehensive information systems policies and procedures.

Planning is an exciting process for credit unions. This is where we discuss and decide on important strategies that will determine our success. Be prepared with the best information available. Your credit union’s future depends on it!


Source: 2015-16 Environmental

Categories: Research, Strategic Planning & Consulting
Posted by Kevin Hood, CTGA, IT Consultant, Credit Union Resources, Inc on 8/21/2015

If you were asked that question, could you name all of the possible systems/services your employees could have access to?  If you had an employee leave, especially a long-term employee, would you know what systems they needed to be removed from?  In today’s environment, we have a login for many different systems.  This could pose a significant risk, depending on the system, if you were to forget to remove a terminated employee from a system or if an employee were given elevated access to a system.  When I am out in the field performing information security risk assessments for credit unions, internal controls over user management is an often overlooked step in their security program.

Our recommendation is to have an Access/Termination Checklist to track user management/change management throughout employment.  This listing should include all possible systems the credit union has in place.  When a new employee is hired, the checklist can be used to document the access that is given.  As changes are made throughout employment, the list should be updated to reflect the changes.  Then, at termination, the credit union will have an accurate listing of all access needing to be removed for that specific employee. As a further level of control, the employee’s supervisor should sign off on the checklist anytime a change is made.

User audits are another recommendation for a strong user control program.  Periodically, the credit union should perform a user access audit on all critical systems.  For example, with your data processing system, you should have role-based access controls in place for your staff using the principle of least privileges.  On an annual basis, you should audit your critical systems to ensure all employees have appropriate access levels commensurate to their job duties.

Strong user control procedures are an integral part of a robust internal controls security program and can be very easily implemented.

Categories: Compliance, Financial & Auditing, Technology Consulting & Compliance
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