This blog is a companion to the EDGE Encores webinar series. The series brings the four most popular breakout sessions from EDGE24 to the virtual space, allowing those who missed the conference view some of the quality content they missed and allowing those who did attend to re-watch their favorites. This blog is by Rammesh Rajagopal, the Director/EVP of SECU, and presenter of the session “One Bite at a Time: Transforming Through Incremental Improvements.”

Credit Unions across the country have been going through multiple challenges in the last few years, resulting in a 30% decrease of credit unions nationally. This decrease has occurred through consolidation and pressures from traditional banks and FinTechs as well as increased competition from newer concepts such as embedded banking. Some of these Credit Unions have maintained a presence in their communities for a long time, but the kind of members that they serve have changed – the personas they are catering to range from Boomers to Millennials to Gen-Zs to Digital Natives. They for sure face challenges from inside and outside to thrive amongst various competing factors and continue to serve their members while providing a best-in-class experience.

The 7-Fold Challenge

All these lead to challenges from both internal and external forces. The demands from external forces always outweigh the internal ones and it’s a constant challenge for all to balance the two.

• Demographics: The demographics around the member base are continuously changing and it has become important and imperative that we are aware and address these changes as they occur.
• Expectations: While digital (both desktop and mobile) is more popular among all age groups, branches continue to receive good amounts of traffic, along with other channels. members expect information and data quickly and through these various channels.
• Industry Trends: With new players such as FinTechs, embedded/digital banking, open banking and banking as a service, there are newer competitors to consider in addition to traditional banks and other credit unions.
• Technology: Newer and modern cores are coming that enable core banking, and some even offer all-in one cores catering to multiple functionalities beyond core banking. And of course, we have to look at Cloud, AI/ML to give the best to our employees and members.
• On the other hand, if we look internally, there are a different set of challenges – which can broadly be put into three areas:
• People: An aging workforce combined with deep tribal knowledge making it people-dependent instead of system-dependent.
• Process: Several outdated, manual and unautomated processes and often redundant, or complicated, and non-standard.
• Technology: Several of the systems are getting old, some unsupported, leading to vulnerabilities, an inability to scale for growth and finally leading to surmounting technical debt.

The 5-Pronged Approach

All this means we need to look at a total change on all – People, Process and Technology leveraging Data as the fuel and delivered through Programs to attain business outcomes on both Experience and Productivity of Members and Employees. There is also a need to think of a new type of experience that satisfies all kinds of member personas. This experience must be available as omni-channel and personalized to the individual needs.

• People First (and Culture)
  • Balance internal employees with deep domain knowledge vs. new hires for external perspectives and skills.
  • Augment your credit union’s workforce with external vendors to fulfill modern technology needs while maintaining a continued focus on reskilling/upskilling through education, exposure and internal movement.
  • Encourage exposure to industry, peers and thought leaders through conferences, trainings and seminars/webinars.
  • Change your employees’ mindsets from mere order takers to enablers, accelerators and thought leaders.
  • Move away from traditional hierarchical culture to be more flexible, adaptable and accountable, promoting innovation from the ground-up.
• Process Overhaul:
  • Build industry standard ITIL/ITSM support processes to improve operations.
  • Implement agile processes and tools to enable/accelerate delivery.
  • Bring security competency and discipline with robust processes and CISO.
  • Implement enterprise prioritization processes to balance innovation with operational excellence or transform vs. BAU/run.
  • Improve employee engagement with periodical communication, townhalls, all-hands etc.
• Tech to Transform:
  • Bring enterprise integration with modern technology to move away from spaghetti integration and architecture to simplified, scalable, manageable, secure and reusable APIs.
  • Bring focus on enterprise architecture across IT – infrastructure, security and app dev.
  • Bring newer enterprise tools to support digital transformation.
• Data as a Fuel:
  • Capture data and metrics wherever possible.
  • Suggest KPIs (key performance indicators) and KSFs (key success factors) to measure and improve.
  • Move the organization towards data-driven decision making.
• Programs, Projects and Quick Wins:
  • Identify the areas to enable digital transformation and create initiatives, programs and projects.
  • Prioritize key programs and projects to enable faster time to market.
  • Deliver incremental improvements to bring improved experiences while balancing BAU (business as usual).

Quick Wins and Trust

While embarking massive transformation in all areas of business – from core banking to lending to contact center and more, look at incremental wins, too, as large transformations take time, and are often multi-year journeys. If we do not recognize and address this, it could potentially lead to poor experiences for members or impact productivity for employees, leading to attrition.

Having a focus on incremental changes will allow your credit union to reap benefits with quick wins and lead to improved employee and back-office productivity and enhanced member experiences.

Set the Foundation right:

In Conclusion​

Transformation takes time, especially for larger organizations, but setting the foundation for success is key. We cannot lose sight on others while focusing on one, so the need to look holistically. 

Transformation is a process and a journey and not an event and is going to take time, but credit unions have to get started on this, and soon, in order to stay relevant in the industry as well as provide the best features and experience to the member community. In addition, credit unions should be able to share the lessons they are learning throughout their journey so they could be useful for other credit unions that are on similar paths.

To learn more about this topic and how your credit union can begin to improve through incremental changes, join me for my live webinar, One Bite at a Time: Transforming Through Incremental Improvements, on August 13^th at 2:00PM. We’ll discuss the topics covered in this blog in more depth, and there will be an opportunity for you to ask questions about how your credit union can begin its transformation. Register here.

Three Key Takeaways:

• Balance Innovation with Operational Excellence: While transformation is inevitable and we have to be innovative in all areas, BAU is critical too – focus on continuous improvement leading to operational excellence.
• Look holistically: Look at a total change on all – people, process, technology, data, culture and experience.
• Build Trust: While embarking on massive transformation in all areas of business, look at incremental wins. Securing early wins is a good way to prove the case and build trust amongst members and employees.

Rammesh Rajagopal is the Director/EVP of SECU (State Employees’ Credit Union) heading the Application Development & Support organization in IT reporting to the CITO directly. He leads the development and support of most of the applications that serve the members, front & back office and employees.