By Todd Clark, CO-OP Financial Services
While now is the busiest time of year for our industry, it is also a time to reflect on our successes and challenges in order to begin planning for a new year. These past few weeks have been particularly exciting at CO-OP, having just received a favorable review of our organization from NCUA and with two new additions to our Executive Management Team: Chief Product Officer Bruce Dragt and Chief People Officer Cheryl Middleton Jones. I feel more confident than ever that we have the right business plan and team to fuel growth within the credit union movement.
Our industry continues to grow and thrive. In fact, according to the latest NCUA and Callahan research, credit union membership is up 4.5 percent in 2018, adding five million new members over the course of the year. Altogether, our movement is now 116.9 million members strong.
These data points are not surprising. Credit unions continue to deliver exceptional value to their members on many fronts – from the personalized service we provide to the growing array of digital solutions and extended branch access made possible by shared branching.
As our industry expands, we face both opportunities and headwinds from new, disruptive technologies. Record investments were made in fintech during 2018 as companies continued to jump in and compete for their share of the $110 trillion payments market.
While the future is promising, the competition is fiercer than ever – with big banks coming after our members in force. In order to compete, credit unions must embrace digital transformation – always with an eye on member service.
At CO-OP, we’ve been living and breathing this transformation all year by focusing on fully integrating the TMG business into our own. The new CO-OP is distinguished by an incredibly strong, talented and committed workforce of 1,600 employees and healthy revenue growth.
Additionally, the integration of our Operations and Technology teams to form Enterprise Technology & Services (ET&S) has brought forth a new service model – we have embraced a more client-centric focus which, in turn, is allowing our client credit unions to be more member-centric.
One thing we’ve learned this year is that integration and innovation go hand-in-hand. Thanks to the hard work of our team and valuable feedback from our clients, we’ve made tremendous progress in both integration and innovation in 2018.
Here is a snapshot of the milestones we reached this year:
Payments
Payments will continue to be a critical element in winning preferred financial institution (PFI) status for credit unions. But winning the payments race is about more than just offering the latest technology. Payments – and banking in general – are rapidly being judged by consumers based on the experience they provide.
Today’s members want choices, including access to multiple channels, and they want security without fail. They also want their financial institution to sort out the complexity of an industry in flux to make payments as simple as possible for them.
To help credit unions succeed in this dynamic marketplace, we focused this year on advancing our payments offerings with a strong emphasis on mobile, real-time and contactless options.
I’ve spoken at length about why I believe Zelle can be so transformative for credit unions and I’m excited that our own Zelle solution will help make it faster, easier and much less expensive for credit unions to provide Zelle payments to members. We were also first to market this year with supporting payments integration for Garmin and Fitbit wearables, which research shows consumers are overwhelmingly beginning to demand. Finally, we continued to advance our digital wallet solutions, including Apple, Samsung and Google Pay, which we believe will be vital for helping credit unions achieve top-of-wallet and PFI status.
Experience
There has been a significant shift in consumer sentiment, as “by the year 2020, customer experience will overtake price and product as the key brand differentiator,” reports Superoffice.com. Improving experience within an organization takes time but more importantly it requires feedback. That is why we focused a lot of our efforts this year on engaging directly with our credit unions and members to understand their experiences.
All year round our Client Experience team and Co-Creation Councils have been collecting feedback from you, our credit union clients, to help drive the strategic direction of CO-OP, our product roadmap and our new service model.
A perfect example of the impact of this work has been the development of a new disputes and chargebacks system. Based on the recommendation of the Co-Creation Councils at our June meeting, we are now actively working to replace our two legacy settlement systems – one developed over time here at CO-OP and a second that came with the TMG acquisition last year – with an updated enterprise-wide solution that is being designed and architected under the guidance of the Co-Creation Councils. The new system will streamline settlement processes for credit unions for better, faster service to members.
We are thrilled with the excitement and collaboration we are seeing on the experience front and look forward to continuing to drive innovation with the Co-Creation Councils in 2019.
Technology Innovation
This year, we also launched two major flagship products: MyCO-OP and COOPER. These new innovations will anchor our infrastructure going forward and serve our clients and their members for years to come.
MyCO-OP is our new highly secure, PCI-compliant access point to CO-OP systems and applications. Designed to protect credit union and member data while allowing employees to freely move from one application to another, MyCO-OP is already helping our clients work more efficiently and serve members faster. The next generation of MyCO-OP is in the works to include more robust reporting and is slated to go live in 2019.
We also introduced COOPER Fraud Analyzer, a data-driven fraud mitigation tool, now in pilot testing and on pace for full availability throughout our shared branch network early next year. COOPER has been a huge initiative, as we believe AI and machine learning technology will be vital for understanding member behaviors and preferences in order to drive better engagement.
Giving Back to Communities
Finally, I feel extremely proud of the philanthropic work we’ve done this year to help make a difference in our local communities. Whether it was delivering aid to communities impacted by natural disasters, or partnering to deliver 1,500 backpacks and financial literacy kits through our Yoobi Back-to-School program, CO-OP credit unions have remained true to the mission of “people helping people.” This year we also celebrated 10 years of the CO-OP Miracle Match Program, and the fact that we have collectively raised over $20 million to support our local hospitals.
Looking Ahead at 2019
As our industry continues to advance at breakneck speed, we are reminded of the importance of education and staying on top of the trends shaping the future.
To help you stay informed, CO-OP continues to invest in events that convene thought leaders throughout the industry, including our THINK conference series. In 2018, more than 750 credit union representatives joined us for a week of discovery and collaboration at THINK. Our THINK 19 conference, themed “Opportunity Never Rests,” will once again give us a unique opportunity to connect, exchange ideas, benchmark our progress and seize opportunities.
On behalf of the CO-OP organization, I would like to thank you for partnering with us on this journey – and congratulate you on another year of growth, achievement and member service.
As THINK 18 alum Jaron Lanier noted: “Credit unions have a tremendous opportunity. How many organizations have 50 million+ people, have financial relationships with those people, and have trust? Apple. Amazon. And credit unions.”
We’re in good company – and poised to stay there.
This blog originally posted at the CO-OP Financial Services Insight Vault on December 16, 2018. The original post can be found here.