Key strategies and supporting tactics for building up your business, whatever happens next
The financial services industry had a landmark year in operational transformation and, whether due to safety concerns or due to necessity by lockdowns, consumers have changed since Q1 of 2020. Credit unions were uniquely challenged to brace their operations for pandemic-grade member needs, digitally and through the branch.
As consumers and businesses begin to emerge from their virtual trenches, credit union leaders across the U.S. are reassessing whether their operations are equipped to support life after COVID-19 and help set some guidelines for this task. SRM’s project managers have provided the following seven pillars for operational excellence. We hope these strategies and ensuing tactics will help build up and reinforce your credit union’s operating models, whatever may happen next.
1. The Location Strategy
The extent to which a credit union embraces long-term remote working models carries implications, especially for branch square-footage and layout.
A location strategy consists of the branch strategy, the work-from-home strategy and the performance management model. A performance management model for remote workers should include having unique coaching/training requirements, implementing collaboration tools and setting key performance indicators.
Real estate is typically the second-largest annual expense of a credit union (after headcount). Now is the perfect time to reconsider your real estate footprint to make sure it syncs with your corporate strategy.
2. The Operating Model
Social distancing measures raised the stakes for member experience and brand differentiation. Operating model strategies have now taken on greater urgency, and the answers to mission-critical decisions may have changed, given the new environment. Resources may also require shifting among service channels or products to align with a new set of member and prospect needs.
3. Organizational Redesign
This strategy plans the groundwork to address new challenges and service scalability. In an unpredictable environment, its aim should be to empower teams with the mindset and tools for various scenarios. The effort may also require the redeployment and re-skilling of staff across different functions and reassessing the focus and spans of leadership control.
4. Portfolio Rationalization
There is no time like the present for credit unions to reconsider their product portfolios. The pandemic has shifted priorities dramatically, and projects that were a priority two years ago may not deserve the same level of focus and resources. Conversely, items that were not top priority pre-pandemic may be critical now and need to be super-charged to get across the finish line faster.
5. Process Re-Engineering
During the height of lockdowns in 2020, many credit unions implemented non-standard procedures and processes to ensure members received uninterrupted service. These now will require review for long-term efficiency, security and exceptional member experience.
6. Intelligent Automation
Credit unions can use innovative technologies alongside of people to augment human expertise rather than replace it. These can be classified as IA and include machine learning, robotic process automation and artificial intelligence.
Implementing automated workflows can not only eliminate tedious manual work and legacy infrastructures but also free up personnel to focus time and energy on high-value activities.
7. Supplier Contracts
Credit unions might have several dozen vendor relationships to ensure successful operations, and when the times change, so do contract terms. Optimizing critical supplier contracts can mean finding inconsistent clauses, realigning service needs with market conditions and auditing high-dollar invoices for errors.
Before each contract expires, credit unions should do their due diligence to ensure a level playing field when renewing vendor contracts. The results often lead to significant cost-savings or revenue growth that can fund other initiatives.
The Bottom Line
Many are now assembling the blueprints to establish new business models or build on existing ones to scale up digital and human branch capabilities.
To help prioritize the building blocks, SRM’s latest white paper, Seven Pillars for Operational Excellence, offers specific guidelines that can help uncover process inefficiencies and immature capabilities across a credit union’s operational infrastructure.
Although credit unions have successfully kept their operations running uninterrupted this past year, now is the time to level up their processes.
Jesse McGannon is VP/advisory services at CUESolutions provider Strategic Resource Management. He provides advisory services for operational process improvements and technology strategy guidance for financial services products. His technical experience in cross-border payments, faster payments, digital banking, and IA has been applied in all stages of project delivery, from initial strategy to target-state design and on through implementation.
Throughout his 13+ years of financial services and payments consulting experience, McGannon has developed an expansive range of programs and infrastructural plans across the US and beyond. Prior to joining SRM, he was employed at Accenture and advised large U.S. & Canadian banks, fintech companies, credit card networks, issuer processors and community banks.