Yet we are not using this strength to the full extent possible and often shy away from partnerships in areas where we could save millions of dollars, improve our competitive position and create value for our members. Those who are willing to give up a degree of operational control can maneuver in a way that provides strategic flexibility, operational efficiency, cost savings and member value.

We may have started as simple operations, but over time, we added a full suite of products through numerous delivery channels. As a result, our expenses are mounting. In order to win market share and return value to our members, we need to maintain our price advantage and continue to offer higher quality service. Unfortunately, both are expensive.

The time to reconsider shared services and collaboration is now.

Credit unions find themselves in a new world of extraordinary competition from banks and now web-based retail banking services. These competitors come to the game with scale, which allows them to spread their costs over more transactions and customers thus reducing the cost of each new account or service. In addition – through mergers or reinventing the service model (web versus branches) – our competition is actively increasing in efficiency and furthering their scale advantage. They will be even tougher competitors going forward.

Within credit unions, the member value and growth derived from the institutions with the largest scale is also clear. Filene reported that at year-end 2014, credit unions with more than $2 billion in assets grew deposits and assets at a 50% higher rate than the industry as a whole, and those with more than $10 billion in assets grew at a 100% higher rate. This growth is attributed to lower operating expenses achieved through scale, which leads to better rates and improved services.

If we are to remain competitive there are three possible scenarios: Remain the same and attempt to compete on service, merge into larger organizations or collaborate. The danger in the first option is that the definition of service is beginning to change as large banks and newer fintech companies are redefining service and embracing mobile and web-based technologies. This service model is particularly appealing to younger members who will be the lifeblood of our organizations in the coming decades. In other words, being "friendly" simply won't go as far as it used to.

Merging is a difficult option. Without stock as a means to acquire credit unions, logical mergers to achieve scale rarely occur. As we see it, collaboration is the best alternative to remain competitive.

Often times, credit unions attempt to compete in the most inefficient means possible. For example, relatively small institutions might independently run back-room operations – think in-house systems, accounting, compliance, HR and administration. Does this add value? If so, how much? Every credit union should know the answers to these questions.

In smaller credit unions, the issue is even more important because the operations required to support basic financial services have less scale and are more expensive. Think about the complexity of a basic checking account that now requires ACH, mobile, debit cards, check processing, ATM services, bill payment and fraud detection capabilities. Wouldn't a shared technology and back-room operational model provide enormous savings and competitiveness?

If you are not adding value or enhancing the member experience, why perform that function in-house?

There are proven collaborative models that demonstrate savings of up to 25% in technology costs while improving speed to market, technological capabilities and processes. The very thought of extracting this value and investing in data analytics, or mobile-first or marketplace lending technology, should be exhilarating.

As the former CEO of a multi-billion dollar credit union, I was fortunate to partner with other successful credit unions that created shared service platforms for our technology operations, call centers, back-room lending, deposits and collections operations. These combined efforts saved each partner millions of dollars per year. Credit unions everywhere, regardless of size and scale, are beginning to collaborate. Leagues are also sharing back-room operations as evidenced by the recent announcement from the New York Credit Union Association and League of Southeastern Credit Unions, which are following a model we helped develop. The California and Nevada Credit Union Leagues' Plexity System, which encompasses HR, technology and accounting, has also gained several partners. Three medium-sized credit unions are joining together for technology and back-room services. There are also projects occurring in areas such as shared branches, mortgage operations and small credit union systems. These partnerships and the conversations surrounding them are just the beginning. The momentum is clearly shifting.

The National Association of Credit Union Service Organizations is leading the charge, as it is connecting credit unions that have similar needs or interests in sharing services. Credit unions should look forward to its upcoming conference as there will be sessions that can help everyone interested in collaboration find the right partner.

Collaboration through shared services is the credit union way. Now is the time to recapture this strength and invest in a strategy to improve our operations.

Kirk Kordeleski is CEO of Kordeleski Consulting. He can be reached at 516-528-5057 or [email protected].