Innovations That Last

A $712M institution discusses the pros and cons of conservative technology adoption and industry innovation.

 
 

With 12 branches, numerous shared branching locations, and an online suite that includes online banking, bill pay and eStatements, OSU Federal Credit Union ($712M, Corvallis, OR) has a variety of ways to serve its roughly 68,000 members.

From its humble beginnings as a one-man operation at Oregon State College, to reaching its first $1 million in deposits in 1960, to its current positioning today, the credit union has undergone numerous changes, but maintains the cooperative principles that guided its founding.

Part of that process is determining which technologies, both member facing and operational in nature, provide the best value for the co-operative. Craig Cole, executive vice president and chief information officer, discusses the credit union’s technology adoption strategy and how it vets potential investments.

Aaron Pugh: On a spectrum from innovator to late adopter, where does your credit union fall and why would you label yourself as such?

Craig Cole: Our number one philosophy at OSU Federal is to focus on the member experience and provide unsurpassed service. We adopt technology, whether early or late, if it will improve or enhance that experience. With that said, I would put us in the middle. We like to take a conservative approach to technology. We like things to be proven or have standards adopted before jumping in.

AP: Do peers and competitors play a role in determining your specific technology adoption strategy? How about member demographics and expectations?

CC: We are not worried about competition, we want everyone to be successful, because that will make us successful. Peers do play a role. We like to see what other credit unions are doing and how they have or why they haven’t deployed a certain technology. We don’t see a need to recreate the wheel if someone has already done it successfully and they match our size and infrastructure. We do plan our technology deployments to not only support us now, but to support us as we continue to grow to that next asset size level.

AP: How did you assess member interest and vet the viability of various technologies within the institution before you moved forward?

CC: It is not so much a matter of being aggressive or conservative, but of relationships and timing. An example of our conservative approach would be our deployment of our new online banking and mobile services. Many credit unions jumped on the mobile application bandwagon early, but we chose to wait for the technology to mature and for some standards to be developed.

While applications are the new buzz word, we think a strong browser-based experience is probably more important. While some of our members probably wanted a mobile experience sooner, we waited and will deploy a complete strategy in February of 2012 that includes online banking, eStatement presentment, eBilling, a personal financial manager, and browser, text and mobile banking services. We have not seen any real drawbacks to this approach. It will come with a comprehensive and patient education process to make the experience as seamless as possible for our member.

AP: How did you budget for your tech goals? Do you expect a significant dollar ROI in every case or are you looking at other benefits that may come out of it?

CC: With our philosophy of focusing on providing unsurpassed service to our members, our technology is not deployed with an ROI in mind, at least not in dollars and cents. Our ROI around technology has been in our member experience and loyalty as a result of that technology.

AP: What are the advantages as far as structuring and managing your IT and operations team for a more conservative approach?

CC: Does it yield advantages in the vendor negotiation processes? Yes, the advantage of a conservative approach is just that. You don’t get locked into a great technology that doesn’t get adopted (think Beta and VHS), and you see who will have staying power. We like long-term vendor relationships, buying and installing a technology is only part of the life-cycle. We want to know the vendor will be there to support the product in the long term and grow with us. But if our needs and their development path differ, then we’ll change if needed.

AP: How does your core processing system affect your decision to be an innovator or late adopter?

CC: We have been on our Core for a very long time, so we have be very diligent in making sure that any new product will be able to interface with it. This is where I think the Credit Union technology industry could really help itself in developing a common set of interface standards. I know the CUNA Technology Council is working on just such an initiative. It would really make things much easier and I think benefit the entire industry.

AP: What member facing or back office technologies would you like to see incorporated by credit unions in the future?

CC: I think having a set of standards that would allow the integration of various products into our Core environment would be the best thing we could do. The extension of banking services will be a key strategy in the future, which points directly at the mobile experience. Consumer connected devices will grow from 22 million in 2010 to roughly 270 million in 2015, according to Berg Insight, and smart phones will outsell personal computers this year. We have to have our services ready for that kind of member mobility and experience.

Read another perspective on technology adoption in “An Eye For Technology” from the 3Q 2011 edition of Technology@CU.

 

 

 

Feb. 20, 2012


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