Many Things Work to Limit Growth, But Technology Doesn't Have to Be One of Them

My experiences working with credit unions as a corporate credit union senior manager, as a product manager for online banking applications, and as a consultant to credit unions and banks have led me into conversations that often revolve around how small to midsize financial institutions can continue to compete, even to grow, in the face of ever-changing technology requirements and needs. Following one such conversation, where the credit union’s CEO worried over her credit union’s ability to afford the technology many said she would need to compete effectively, I sat down to capture and share my thoughts. For what they are worth, here they are: Competing at Any Size. It is certainly true that the smaller you are the fewer the resources (capital and people) you have to put to any task; however, my experience leads me to believe that any credit union can grow and prosper, and is not prohibited from doing so because of outsized technology costs. Larger organizations have more money and people to apply to tasks, but they don’t have a monopoly on good management. As well, continuing advancements in technology have created greater computing power at declining prices, allowing even smaller credit unions to become full-service providers that can meet the growing needs of their members. Larger organizations may have a margin of error greater than you do because of their greater resources, and this allows them to adopt technologies sooner than you will, and to try new technologies before they are proven to work well – or proven to be of interest to a large enough share of their audience (think “aggregation”). But your credit union benefits from these efforts. You may not be able to play on the leading edge of technology adoption, or at least as close to that edge as larger credit unions might go to play; but you can learn by watching how well new technologies work for others; and you can gain the knowledge to help you choose well those technologies you want to deploy for your members and/or your staff. You can do this soon enough to meet the growing and changing needs of members. After all, except for the earliest adopters of new technology, we are all slow to adopt and to change. Managing Technology – Don’t Let IT Manage You So, if it is more a matter of management than resources, you need to perform some fundamental management tasks, the same tasks confronting managers in larger organizations. When it comes to working smart, size doesn’t matter. So, what do you do to compete? * You need to know what technology you have already, and manage it to take full advantage of all the capabilities it has, and you want to use. * You also need to align your technology plan and purchases with your overall strategic plan, so you buy and deploy those solutions that give you the greatest “bang for your buck.” * When looking to technology initiatives, treat them as business improvement projects, not technology implementations. Change the focus from technology to business results, and you will get more out of your technology investment than larger organizations that don’t do this. * Most importantly, become a technology “portfolio manager.” With the advent of the Internet and networked computing, you are not forced into deploying “all-in-one, stand-alone,” technology solutions. You have greater freedom to pick and choose “software services,” rather than “software applications.” This means you don’t have to rely upon any single vendor to deliver everything you need. You can shop, build your own portfolio of technologies, and manage them according to your plan, and your members’ needs, and not according to your vendor’s plans. With this greater freedom comes larger management tasks but, if done right, you can “look and feel” like the big boys. For example, smaller credit unions have quickly followed their larger cousins into online banking, because costs fell rapidly once early development ended and marketplace demand grew. The basic functions of online banking, what I used to refer to as “an ATM on steroids,” are easily affordable to your credit union. Now, credit unions are adding additional online services, such as electronic statements, online alerts, and online access to check images that promote a larger online “dialogue” with members, while making the credit union look as useful and functional as some of the largest banks. Smaller credit unions can be a part of this trend. They can “mix and match” vendors’ solutions to come up with the portfolio of services they want to present to members; and when done, they can provide the same level of service they find from the largest of providers. And they don’t have to be fortune tellers to determine which services members most want. Today, you can use online survey services to ask your members to tell you what they want; and do it quickly, at a low-cost. Credit unions that manage their technology portfolio will make smarter purchases, at lower costs, and will find they can compete for members in the future. By focusing on technology as a “means to an end,” and managing accordingly, credit unions will not lose ground to competitors, and will have opportunities to grow.