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More Than a Pretty Face: Credit Union Resources’ Business Partners are Dedicated to Serving CUs
Friday, August 26, 2016 6:35 AM

PBA CU Resources

Dean Borland, SCMS, CUDE, VP Product Development, Credit Union Resources

Every business has a purpose. At Credit Union Resources, our purpose—our mission—is to “support the credit union system by providing innovative, high-value business solutions.” As a wholly owned subsidiary of Cornerstone Credit Union League, we pursue our mission in two ways: by providing consulting and hands-on audit, technology, compliance, human resource, staffing, executive search, training, and planning services, and by partnering with a select few premier solution providers serving the credit union industry.

Mostly used by small-to-mid-size credit unions, Resources’ “internal” services primarily support non-member-facing activities, assistance that helps credit union staff to direct more capacity and attention to serving members. In contrast, solutions endorsed by Resources and provided by third-party business partners tend to be more operational—tools that support critical business processes and enhance the member service experience.

Occasionally, we are asked how business partners are selected: “Do you partner with the vendor who offers to pay the most money for an endorsement?” The simple answer is no. Much consideration and research goes into the process of selecting a Credit Union Resources Business Partner.

Partnering opportunities abound; each year I interact with an average of 100 or more service providers that would like Resources to endorse their product or solution. So, how are Resources’ business partners selected? Here’s a peek behind the curtain.

Resources has a fundamental preference for partnering with third parties who are committed to and support the credit union industry. But, whether a prospective partner is a member of the credit union family or an entrepreneur who thinks they have a better mouse trap, the first consideration of any partnering discussion is market potential: Will the proposed solution make it into the credit union’s shopping basket?

Market potential is critical because every endorsed partnership is a three-legged stool. Credit unions must believe the solution in sufficient quantity to provide financial returns to satisfy the provider’s profitability expectations and fund a financial commitment to Resources.

Yes, vendors pay Resources to endorse their solution. Resources, in turn, uses the money obtained from business partner endorsements to help fund League and Cornerstone Foundation activities, thereby helping minimize the cost of league affiliation and enhancing the affiliate value proposition for those affiliates.

IF preliminary examination of a product solution and its market potential suggests promise, Resources performs a market evaluation. We involve credit unions within the solution’s target market, either informally or via focus groups, to determine whether it is something the credit union would purchase and use. On occasions where the solution directly touches members, credit unions have been enlisted to participate in pilot programs, actually testing the solution’s market potential with their own members.

IF credit union feedback from the market study is favorable, Resources will pursue consideration of the solution as an endorsed product. But, we don’t limit the search to the initial contact. Our process is to identify three to five providers of similar solutions (if possible) and issue a request for proposal (RFP). The RFP document is formidable, asking for company history and structure, financial statements, product/service description, credit union clients, a technical overview (including privacy policies, technical audit reports/findings, security features, etc.), estimated market potential, and a product/service value assessment that includes pricing and value projections.

RFP responses are compared in a side-by-side analysis and reviewed by Credit Union Resources’ Technical Evaluation Panel (TEP), a committee composed of Resources and League senior leaders. The TEP is a major decision point for product endorsements. The TEP is empowered to table an endorsement consideration or, if it determines that the solution (and a specific provider) present a viable opportunity, a referral is made to the League CEO for review.

IF our CEO agrees with a TEP recommendation to pursue an endorsement, the recommendation is then placed on the Resources board agenda for review, consideration, and decisioning. The board has three choices in decisioning an endorsement recommendation:

  1. instruct staff to reconsider the recommendation and report back to the board with additional information,
  2. deny the solution/recommendation, or
  3. approve the recommendation and pursue the endorsement.

IF the proposal is approved by the board, League/Resources’ general counsel is engaged to negotiate a formal marketing agreement between Resources and the proposed new business partner, cementing the terms of the partnership. When contract negotiations are complete and the document is signed by all parties, Resources staff engage the business partner to develop plans supporting the terms of the agreement. It is not uncommon for the process to take nine months to a year or more, start to finish.

So, a new business partner relationship is born, but the due diligence process is not over. With each contract renewal (generally annually), Resources performs follow-up due diligence, rechecking financials, monitoring changes in the company’s business strategies and market posture, and documenting feedback that credit unions have provided to League representatives and the Resources sales team.

IF the business partner is not performing up to your standards (or the standards Resources enforces on your behalf), the contracts are not renewed at maturity.

In summary, you can be assured that Resources has the best interest of credit unions in mind as we strive to fulfill our mission to “support the credit union system by providing innovative, high-value business solutions.”