• Mar 04, 21
• Shawn Cole
• Best Practices
• 0 comment

Why Digital Transformation is Important to the Future of Credit Unions

The coronavirus pandemic made digital transformation a necessity for all sectors of business, but especially within the financial industry. Credit unions, in particular, are struggling to attract younger customers to their services. This is largely due to the lack of available digital services and functionality. Younger generations are accustomed to accessing accounts, paying bills, and reviewing statements online. 

The newer generations expect to be able to complete all of their needs through online services. If your customers have to enter a building or regularly make phone calls to complete transactions or check information, you can be sure they’ll be searching for a new credit union with updated technology.  

Why credit unions need to embrace digital transformation

Credit unions have to embrace digital transformation if they expect to stay competitive. Customers can easily switch services if they don’t feel your company is keeping up with digital trends. Embracing digital transformation also has a number of other benefits in addition to helping you maintain a competitive edge.

Consumer engagement

Credit unions grow by serving their customers well. One way to really serve members and keep them engaged is by providing access to variety of in-person and digital tools. For example, some customers may prefer to go into a brick-and-mortar location to ask questions, but another segment of customers likely prefers a chat box option on the website. Customers are also starting to expect financial institutions to offer mobile apps so accounts can be accessed on the go. 

Multi-channel engagement meets members where they are and maximizes customer convenience. The ability to quickly and conveniently answer customer questions will increase customer satisfaction and help you retain customers now and in the future. 

Enhanced productivity

Digital transformation doesn’t just benefit customers, it also benefits employees. The right technology implementations can enhance employee efficiency and make the workplace more productive. The modern workplace has also changed a lot over the last year to reflect work from home capabilities. Embracing employees’ abilities to complete their work whether at home, in a coffee shop, or in the office is instrumental to maintaining employee satisfaction and engagement. Moving forward, employees will expect to have access to tools and technology that will allow them to do their work from any location. Adapting to the modern workplace is just another aspect of digital transformation credit unions need to recognize. 

Privacy concerns

The digital landscape is constantly under attack by hackers and viruses. Customers need to know their information is safe with your business. By integrating the latest digital tools and protections, customers will see that their information is safe. As your credit union implements new digital tools, it’s essential to maintain all aspects of cybersecurity and to invest in the latest cybersecurity tools. Building customer trust is how your credit union can stay relevant and continue to grow, so don’t let your digital security fall behind as you start to invest in new digital tools.  

Leadership positions for evolving technology

Once your credit union recognizes the importance of digital transformation, it’s time to appoint leaders. The right leadership will not only oversee the implementation of the latest digital tools, but they’ll also monitor digital trends to make sure your credit union is at the forefront of new technology. Two common positions that can help manage your company’s evolving technology needs are a chief information officer (CIO) and a chief technology officer (CTO).

Hiring a CIO or CTO for your credit union

The role of a CIO or CTO within a credit union is to evolve the company’s infrastructure, connect technology to strategic development, and maintain technology analytics to determine how tools are performing. As technology and digital tools become increasingly popular in the financial industry, the role of the CIO and CTO will become even more important. 

Another major aspect of the CIO or CTO role is to develop a top-performing technology team. Evolving tasks such as designing new financial products and services requires an exceptional team that can work well together. The right leader will be able to develop emerging talent within your employees as well as identify talent within new hires. An effective digital leader will also create an environment that is both creative and collaborative so your business can grow and implement new customer features.

The right chief information officer or chief technology officer will lead your company’s digital transformation and bring your business onto the digital playing field. Don’t fall behind your creditors and instead start looking for a CIO or CTO to develop your credit union’s digital landscape.    

Chief Information Security Officer CISO Description

A chief information security officer (CISO) is the senior-level executive within an organization responsible for establishing and maintaining the enterprise vision, strategy, and program to ensure information assets and technologies are adequately protected.

Chief Information Officer / Chief Technology Officer Job Description

The SVP Chief Technology Officer is responsible for the development, execution, and oversight of the credit unions Information Security Program, Information Systems Program, Data Architecture and Management Program, Core System and Development Management Program, Business Continuity and Disaster Recovery Program, and Network and Support functions. Works with direct reports to ensure department goals and objectives align with the Credit Unions strategic plan.

• Be an active member of the Executive Team and strive to achieve goals set for the team and Credit Union.
• Provide overall strategic planning leadership to the Credit Union . Participate in the Credit Unions strategic planning process.
• Prepare monthly Board reports as necessary. Attend Board meetings, and act as a liaison to committees as directed by the CEO.
• Have a sound knowledge of Credit Union information technology practices as well as federal, state, and local regulations related to areas of responsibility to ensure compliance. Develop policies and procedures to ensure compliance with new regulations. Maintain a solid understanding of software, network, and telecommunications systems.
• Evaluate and advise on the impact of long-range planning, introduction of new programs and strategies and regulatory action.
• Direct department audit functions. Work with internal and external auditors and examiners, as necessary .
• Direct the operation of the Information Systems Department to ensure the development and implementation of secure, reliable, and cost-effective systems to meet the needs of the Credit Union.
• Manage the Information Systems Program for the Credit Union.
• Oversee the disaster recovery/contingency/redundancy strategies, policies and procedures safeguarding Credit Union data in disaster and non-disaster situations. Effectively manage contingency plans and have a grasp of the dynamics of resource coordination and business resumption planning. Participate on the Disaster Recovery Team at such times when the Team is activated. Test the disaster recovery plan annually.
• Oversee project implementation and maintain responsibility for the overall success of assigned system implementations within the Credit Union.
• Prepare and manage annual business plans and budgets for areas of responsibility.
• Evaluate structure and team plan within areas of responsibility for continual improvement of the efficiency and effectiveness of the group and provide individuals with professional and personal growth. Empower subordinates to make decisions within their areas on responsibility.
• Conduct performance evaluations and coaching in a timely manner.
• Demonstrate strong regulatory knowledge applicable to this position and understand and comply with government regulations with particular emphasis on the Bank Secrecy Act (BSA), US Patriot Act and related regulations.
• Actively participate and fulfill expectations in the Credit Union Email Security Awareness Program as outlined in the Information Security Program Acknowledgement document.

Chief Information Officer / Chief Technology Officer Qualifications:

Experience: Eight to ten years of similar or related experience

Education: Equivalent to a college degree and a professional certificate or a graduate degree.

The Modern Credit Union CFO

A successful CFO candidate synthesizes old-school accounting with new-age technologies to successfully lead the CU toward a better bottom line.

Credit Union Times | By Shawn Cole

With increased market volatility and advancing digital infrastructures appearing across all industries, credit unions, traditionally regional and relatively conservative financial institutions, are emerging as one of the most transitional and rapidly-evolving subsets of the financial sector. Their risk-averse, nonprofit statuses have steadily deteriorated in the face of changing consumer behavior and digitally-driven global economies. Credit unions need to be as adaptable and innovative as their commercial bank counterparts to retain a stable position in the marketplace and survive the onslaught of economic shifts.

The demands of the credit union CFO, therefore, have modernized alongside the broader organization. Finding the right candidate for the job has become increasingly difficult.

In this new dawn of 21st-century credit unions, a CFO must embrace many dichotomies at once: The spirit of local, small business and the competition of global economic marketplaces; data-driven examinations of financial risks and creative strategy development; specialized financial expertise and a broad understanding of an entire operation. A successful, modern credit union CFO synthesizes old-school accounting with new-age technologies to actively lead the institution, both internally and externally, toward a better bottom line and more lucrative position in the marketplace.

Credit Union CFOs Need Technical ­Accounting & Financial Reporting Experience

Technical accounting and financial reporting have never been high on the list of qualifications for a credit union CFO, but they should be. Not only do members deserve accountability, but CEOs rely on data from financial projections to make informed decisions. And with the accelerated rates of technology adaption and market volatility, decision-making has never been a more complex or multifaceted process. Accurate financial reporting and subsequent detailed data projections are a critical cornerstone in strategic planning.

A strong technical accounting background was considered less relevant for traditional credit unions. In today’s day and age, credit unions need a CFO with experience in managing complex technical accounting operations to support sophisticated financial projections. Infusing credit unions with strategic business intelligence while retaining their local roots and relationships gives them a duality that will ease and streamline their evolution.

Credit Union CFOs Must Have Strong Internal Controls Experience

Because of the sheer amount of readily-accessible cash, credit unions have always been particularly vulnerable to fraud and embezzlement. Indeed, this pattern stretches back hundreds of years to the very beginning of banking itself. This is perhaps the only unchanged element of credit unions. Too often, stories of embezzlement and fraud have surfaced in the financial industry.

Bringing in a CFO who can construct and implement internal controls that mitigate both internal and external fraud and embezzlement risks is critical.

Asset & Liability ­Management Skills Are Essential

Asset and liability management, while often viewed as a regulatory requirement for credit unions, holds enormous potential for financial gain. Historically, small, local credit unions were less focused on providing significant returns and more focused on avoiding big losses. That risk-aversion left significant opportunities untapped.

Now, in a modern, evolving marketplace, no credit union can afford to pass up opportunities. A modern credit union CFO can be a valuable source of knowledge and innovation in helping the institution understand depositor and borrower behaviors and trends, spot and capitalize on new growth opportunities, and maximize returns on capital deployment. The task of assisting credit unions in their efforts to transition their asset and liability practices from a defensive, risk management strategy to an offensive money-making strategy falls on the modern credit union CFO.

Credit Union CFOs Are Innovative Strategic Advisors to CEOs

A modern credit union CFO demands an awareness and understanding of, and participation in, all aspects of credit union operations because so much of their value is derived from acting as an advisor to the CEO.

Deloitte’s “Four Faces of the CFO” accurately assesses that today’s CFOs should be stewards of an organization’s mission, strong operators, strategists, and positive change catalysts. CFOs now develop meaningful partnerships with CEOs to establish a positive company culture, inspire change, create strategic and long-term solutions, and improve the bottom lines across all internal departments. Modern CFOs leverage their experiences in daily operations as well as their financial and technological skills to advise the CEO on strategic decision-making and formulating thoughtful long-term goals and strategy.

Seeking a CFO with a thorough comprehension of lending and operations is also pivotal to choosing someone who can serve as a strategic advisor to the CEO. Lending and operations lie at the very core of credit unions, regardless of changing priorities and approaches.

CFO Hiring Strategies

Now more than ever, credit unions must recognize the more complex challenges presented to CFOs and diversify the areas from which they source their candidates. Credit union-specific experience, while helpful, pales in comparison to a candidate with sophisticated financial management skills and a creative, visionary approach to leadership.

Finding candidates who diverge from traditional CFO traits, like introversion and narrow areas of expertise, will be the most fundamental investment credit unions make in their future.

National Credit Union CFO Search Firm | Cowen Partners

Did you know that Cowen Partners is has been named a leader among the best credit union executive search firms? We do more credit union executive searches a month than most search firms do in a year. With a deep network of highly qualified credit union and financial services C-suite candidates, our executive recruiters know the market. Let us get to know your organization.

Our President and Co-Founder, Shawn Cole is a thought leader on all things CFO, has been featured in the Credit Union Times and contributes to several publications, including the Credit Union Times, CFO Dive, CFO Magazine and SHRM’s HR Today.