The Duty CUSOs Have to the Small Credit Union Movement

Today’s for-profit firms are learning what credit unions have long known: When a business builds around what’s best for its customer, it thrives.

As legacy companies stare down the barrel of digital disruption, they are feeling the pressure to demonstrate an almost obsessive caring about the needs of consumers. It’s why customer-centricity has become such a popular business strategy.

Because credit union service organizations have a very unique customer in credit unions, customer-centricity in our space has to be highly intentional and well thought out. Every business needs a crystal clear view of the customer for which its products, services and disruptive innovations are built. For CUSOs, though, there is an important second layer to that aspect of their business. As CUSO leaders are considering the marketplace, they must also ask themselves: Who are we missing? Is there a segment of the movement underserved by businesses like ours?

Based on decades of experience consulting with small credit unions, I can tell you wholeheartedly, they are universally overlooked by CUSOs.

It can be tempting, especially for start-up CUSOs in the early stages of funding and development, to prioritize things like speed to market, fast growth and exponential scale of the CUSO’s offerings. These are all smart goals and certainly have their place. But, are they more important than measureable, meaningful service to the credit union movement? Not even close.

While every CUSO exists for a different purpose, all share a common bond. It’s right there in the acronym – credit union service organization. We exist (or should, anyway) to serve the movement. And right now, the smallest, most vulnerable credit unions in the movement need CUSOs. Whether it’s serving as an extension of their staff or helping deliver digital-first products to their members, CUSOs can have a dramatic impact on the relevancy of a small credit union to what is likely their fast-evolving membership base.

Small credit unions have been the backbone of the industry for decades. They were formed by community members who cared – way before caring was a strategy. Over time, the leaders of these financial cooperatives found creative, mission-driven ways to provide reasonably priced products and services within a sustainable model. They partnered with one another, made connections outside the movement and invented new solutions – whatever it took to put members on a more solid path to financial health. And, those members rewarded them with the kind of loyalty that every financial institution wants today.

CUSOs, both young and tenured, can use that collaborative history as inspiration. How can we come together to deliver our innovations to credit unions of all sizes, but especially those with fewer resources? What product or service iterations can we make to scale in a way that considers the credit unions that may need us most acutely? Are there price breaks, product bundles, service co-ops or some new, exciting platform model that would get what we do best into more credit union hands?

This is not to say that service to small credit unions must be 100% altruistic. Revenue is but one measure of the value of a client partnership. Taking on small credit unions as clients can generate big-time, needle-moving results. Their size often allows them to be more nimble. New ideas or concepts don’t have to be run up a 400-foot flagpole before they can be integrated. Betas and pilots of new technology may be smoother with fewer internal testers, and testimonials may come faster without the need to be scrubbed by a 10-person marketing department. CUSOs with products or services that challenge the status quo may find their best advocates among leaders of the small credit union movement.

In my mind and heart, CUSOs owe it to the movement to live out the “people helping people” principle just as richly as do our customers. Each of us in the CUSO industry has a role to play in ensuring small credit unions continue to be relevant in the financial lives of their members.

Today’s small credit unions do not exist in spite of financially unwell members; they exist for them. As CUSOs, it’s our duty to ensure those credit unions are seen and supported, just as they see and support all members, regardless of their financial resources.

Howard Bufe is President of CU Evolution. He can be reached at hbufe@cu-evo.com.