Opportunity and trust are keys for these innovators in the west.
When it comes to credit union collaborations and the formation of credit union service organizations in Western Canada right now, Jody Burk is both busy with current endeavors and positive about the potential for growth.
“We’re working together in our region, but we have the opportunity to fold it into larger opportunities down the road,” says Burk, CEO of $330 million East Kootenay Community Credit Union, Cranbrook, British Columbia, and chair of the boards of two B.C. CUSOs: CUPP Services Ltd.—which has provided property and casualty insurance to B.C. CUs for more than 25 years—and CUSO Wealth Strategies Inc., which provides wealth management strategic leadership, as well as manages and oversees all aspects of operational matters on wealth management activities for its 10 Western Canadian credit unions.
Other CUSOs that Burk featured in a 2016 presentation at the Central1 Peer-to-Peer Leadership Conference include Kootenay Insurance Service, MoneyWorks and Kootenay Risk Services. The immediate benefits of credit unions becoming active in such collaborations, Burk says, include the following:
Being able to pull together to hire talent. The participating CUs have developed an agreed-upon compensation structure that enables hiring the very best person to lead a particular CUSO or collaborative effort.
Enhancing CUs’ image with consumers. “In our member survey five or six years ago, respondents said they didn’t think we were sophisticated enough to handle their financial planning,” Burk says. Having a wealth management CUSO with the expertise to deliver outstanding services in this area has changed that marketplace image for the better. We are now the largest wealth management provider in our region,” he adds.
Achieving higher efficiency. “I believe CUs’ job is to provide services to our members in our communities. We have to own that,” Burk says. “But we don’t need to own our back room. That’s the area we can collaborate on.” A key benefit to being collaborative is that each CU is independent, but can get back-room services from one highly efficient organization that uses agreed-upon best practices.
CUES member Jeff Shewfelt agrees with the idea that non-member-facing CU functions are perfect grounds for collaboration.
“For us, if it isn’t involved in serving the member, we’ll look at any way to work with other people,” says Shewfelt, co-CEO of G&F Financial Group, a $1.8 billion CU in Burnaby, B.C. Shewfelt is active in an emerging “back office collaboration” initiative, which has grown out of collaborative successes that some of the participating credit unions—including Burk’s East Kootenay Community CU—have had already. The group has also invited Celero, a CU technology provider, and Central1 Credit Union (the central credit union for British Columbia and Ontario) into the collaboration.
The participants in BOC informed their path forward with a trip to visit large CUSOs in the United States in the summer of 2015, Shewfelt says. These CUSOs included S3 Shared Service Solutions in Glen Burnie, Md., OTS, Centennial, Colo., and the then-Mid Atlantic Corporate Credit Union, now Vizo Financial, Greenboro, N.C., which fosters the Rekindle collaboration initiative.
Shewfelt says that the formal goals of BOC include improving efficiency, providing access to expertise, cost savings, enhancing member service, creating the potential for revenue generation and providing the possibility of a rapid proof of concept.
The first effort by the group was an inventory of all the systems the participating credit unions use. “We discovered that the systems being used by our credit unions contained almost 100 lines,” Shewfelt says, meaning that the credit unions had many different technology solutions and combinations of technology solutions running their back offices.
The group is saying, “let’s see if we can align those,” Shewfelt says. “We’re working collectively with our vendors.”
BOC engaged a consultancy—FinCuro, Trivandrum, India—to help develop a roadmap of technology for the group for the next three years. This roadmap was shared with all Canadian credit unions in support of seeking future participants.
“They continue to work with us on our roadmap and have brought us the concept of 10-10-10, which is explore a solution for 10 hours max, develop the plan in 10 days and roll out in 10 weeks,” Shewfelt says. He acknowledges that this is challenging structure and notes that BOC participants appreciate the consultants pushing them to quickly build a proof of concept rather than trying to build “the best thing in the world.”
In early March BOC was launching three projects built this way: secure messaging (SDD2), an omnichannel strategy and data analytics.
Currently this informal collaboration is guided by a committee of the CEOs of the participating organizations. “We expect all the CEOs to attend the strategic meetings,” Shewfelt continues. “We’ve worked together to build agendas. We use a consultant, Charles Holmes, to facilitate the meeting, as opposed to someone trying to facilitate but also represent their own organization’s interest. He is based in Vancouver and has worked on collaborative initiatives around the world.”
Collaboration isn’t easy, Shewfelt underscores, but it’s worth it in the long haul.
“It really is built on the trust you have with the other leaders,” he says. “Building that does take time. Sometimes one credit union may have to sacrifice something (like a favorite technology system that it has customized) in the short term to get the long-term benefit” for the group.
Burk also believes in the long-term, larger benefit from collaboration.
“We believe we’re getting significant value from this work (in collaboration and CUSO formation) that we’re doing,” Burk says. “We think it can happen provincially and nationally. It’s a way bigger picture than what we’re involved in right now. We have opportunities and trust.”
Lisa Hochgraf is a CUES senior editor.