Lessons Learned From A Challenging Year — Part 1

Credit union chief executives share takeaways from 2020 and talk about how they’ll turn challenge into opportunity in the year ahead.

 
 

Credit unions quickly responded to COVID-19 by sending staff home and extending financial help to members in ways that tested the movement’s operational and financial resilience, each cooperative in its own way.

Now, while the movement and the nation await a wave of vaccinations to beat back a tsunami of infections, credit union leadership teams position their technology and people to turn challenge into opportunity in 2021.

As a uniquely challenging year yields to a new trip around the sun, CreditUnions.com turned to the senior leaders at cooperatives around the country for their major takeaways from 2020 and what they see coming in the year ahead.

Here’s what they said.

This is the first in a three-part series.

  • Read Part 2 for replies from Martha Fuerstenau of American 1 Credit Union, Linda Bodie of Element FCU, Dan Wollin of PCM Credit Union, Mike Lord of State Employees’ Credit Union, and Jim McCarthy of Trailhead Credit Union.

  • Read Part 3 for replies from Paul Baudin of Express Credit Union, Steve Bugg of Great Lakes Credit Union, Joe Christian of Nusenda FCU, Jim Morrell of Peninsula Community FCU, George Rudolph of Pennsylvania State Employees Credit Union, and Brad Calhoun of Teachers FCU.

Royal Credit Union

Brandon Riechers, President & CEO, Royal Credit Union

Brandon Riechers has been with Royal Credit Union ($3.3B, Eau Claire, WI) for 24 years and its president and CEO since 2017.

What is the biggest lesson your cooperative learned this year from the pandemic?

Brandon Riechers: Creativity and innovation by repurposing our team members allowed us to maintain a high level of execution while pivoting as needed with information changing regularly. Our investments in business continuity paid off in the pandemic from the quick deployment of remote workers to effective frameworks for communication.

We were also able to leverage investments in areas like robotic process automation and business intelligence to ensure we remained productive and effective in delivering the experience our members expect in new and creative ways. While financial stability remained very strong, this was a year when our focus on the health and safety of our members and team members was critical and a clear measure of success.

What is your biggest opportunity for the year ahead? What are you doing to respond to it?

BR: Continued investments in technology will accelerate the migration of transactions to digital, and a continued emphasis on the experience around in-person and meaningful interactions will be a differentiator. Leveraging advances in automation to increase speed and quality will increase our productivity as an organization as consumers place a high emphasis on speed.

We’re dedicated to recruiting and developing high impact talent and certain remote workforce possibilities open up a larger pool of diverse talent. Lastly, there will be opportunities for mergers and acquisitions in the year ahead and with our financial stability we are prepared for that potential.

At this point next year, what would you like to be able to say of your credit union’s performance in 2021?

BR: We’ve significantly added to our members’ value proposition in a number of ways. Our fiscally responsible growth has enabled us to return more to our members in both monetary savings and technological advancement.

Our team members are highly engaged and recognized in our communities as trusted financial advisers. Our culture and performance stayed strong by relying on a safe and sound framework balancing proper risk and opportunity. At the end of 2021, we can look back and say even with all the challenges, we were able to keep our focus and became stronger as an organization because of it.

Alabama Credit Union

Steve Swofford, President & CEO, Alabama Credit Union

Steve Swofford is president and CEO of Alabama Credit Union ($1.1B, Tuscaloosa, AL) and has been with the cooperative since 1998.

What is the biggest lesson your cooperative learned this year from the pandemic?

Steve Swofford: How to be flexible in responding to challenges. We have a strong workplace culture at ACU, something we’re proud of and have expended a lot of effort to develop over the years.

That effort has resulted in our being one of Alabama’s “Best Companies to Work For” for the past seven years. That culture has played a huge role in our ability to respond to the pandemic’s challenges, as our staff trusts management when it has been forced to make key decisions during the year – opening and closing offices and drive ups, suspending certain incentive payments, making decisions on when to send employees home to work, etc.

That level of trust has helped to maintain a positive morale among the staff, and a strong focus on providing member service even during this unprecedented period of time.

What is your biggest opportunity for the year ahead? What are you doing to respond to it?

SS: To take advantage of new consumer habits developed during the pandemic, especially as it relates to member use of technology. We expect more extensive use of our drive ups and ITM options vs. in-lobby should allow for lower staffing levels. But it also means our online and mobile platforms need to be exceptional. Our platforms are very good right now, but we’re planning significant enhancements in 2021.

At this point next year, what would you like to be able to say of your credit union’s performance in 2021?

SS: Hopefully, we’ll be past the pandemic, and will have been focusing on improving ACU’s financial performance over the final few months of 2021. With dramatically lower rates and a drop off in non-interest income, most credit unions experienced a decline in ROA and capital ratios during 2020. At ACU, we’re exploring several options to improve our net income in 2021 in order to support our aggressive growth goals for 2021 and beyond. At this point in 2021, we would hope some of those plans would have borne fruit.

Notre Dame Federal Credit Union

Tom Gryp, President & CEO, Notre Dame FCU

Tom Gryp has been president and CEO of Notre Dame Federal Credit Union ($862.4 million, South Bend, IN) since 2010.

What is the biggest lesson your cooperative learned this year from the pandemic?

Tom Gryp: Have your organization prepared/ready for change. This begins at the top with the CEO and executive team. Don’t wait for outside events to force you to change the status quo, as inertia is an overpowering force and cannot be overcome quickly. Also, don’t study situations to death.

Don’t be afraid to act quickly, as speed can generate great rewards when competing against financial institutions whose first instinct is to slow down and not proactively engage with their customers.

An linked image online invites members of Notre Dame FCU to schedule a virtual face-to-face session with a representative of the credit union.

What is your biggest opportunity for the year ahead? What are you doing to respond to it?

TG: Don’t let up. The opportunities created in 2020 will change, but will not go away. Be prepared for additional stimulus programs and to act quickly once they are announced. Institutionalize adjustments made in 2020 to become a more relevant financial institution in a virtual world. Low interest rates and tighter margins will be a reality for many years, so shift to non-punitive non-interest income opportunities.

At this point next year, what would you like to be able to say of your credit union’s performance in 2021?

TG: At the end of 2021, we’ll be able to say that 2020 performance was not a fluke. We continued to take advantage of dynamic market changes in order to be even more relevant to our members and communities we serve.

Opportunities Credit Union

Kate Laud, President & CEO, Opportunities Credit Union

Kate Laud joined Opportunities Credit Union ($51.5M, Winooski, VT) as its president and CEO in September 2019.

What is the biggest lesson your cooperative learned this year from the pandemic?

Kate Laud: We learned we need to be flexible and be prepared to think outside of the box. Although we had a good business continuity plan in place, no one expected to have to activate the “pandemic” section. We were more concerned about flooding or loss of internet. Since we’re so small, we also learned that, in a pinch, we need to be able to do each other’s jobs.

A more sobering lesson we’ve learned is that one person can make one bad decision that has a massive impact on everyone else. What one staff member does in their private life can conceivably cause severe consequences to the credit union that employs them.

What is your biggest opportunity for the year ahead? What are you doing to respond to it?

KL: Our biggest opportunity is remote account opening. We set up a task force a few months ago to accomplish this. Operations, IT, and Member Services all worked together to take on the project.

At this point next year, what would you like to be able to say of your credit union’s performance in 2021?

KL: I’d like to be able to say that we widened margins and became less grant-dependent.

Unify Financial Federal Credit Union

Gordon Howe, President & CEO, UNIFY Financial FCU

Gordon Howe has been president and CEO of UNIFY Financial Federal Credit Union ($3.4B, Torrance, CA) since November 2005.

What is the biggest lesson your cooperative learned this year from the pandemic?

Gordon Howe: This is not my “official” answer, but I’ve joked with my NCUA examiners that we learned our disaster recovery systems actually worked. Within a five-day period in March, we had more than 95% of our back-office team members working from home with no major system or service interruptions. The majority are still there.

The biggest lesson that we have learned over the past eight months is that having a “remote” workforce can be an effective staffing option which provides the credit union several financial and cultural benefits. We’ve seen a dramatic decline in sick leave and tardiness, more flexibility about shifts (including working split shifts), reduced travel and training costs, and the ability to downsize or eliminate space at our operations in four different states.

There are some drawbacks for the team working from home (productivity concerns, team engagement, training effectiveness). However, I’ve been pleasantly surprised that our overall productivity, team engagement, and especially our member services ratings have not gone down. This is definitely a model that UNIFY will continue to utilize going forward.

What is your biggest opportunity for the year ahead? What are you doing to respond to it?

GH: UNIFY’s biggest opportunity is to accelerate the shift we have seen in member behavior (due to the pandemic) from performing transactions in-person to online. The stay-at-home restrictions and overall fear of COVID-19 has forced our members who only did their transactions in-person to learn how to perform their transactions remotely, whether it be by phone or online.

UNIFY needs to continue enhancing both our call center and online servicing platforms to make these transactions so easy for our members that they will see no reason to go back into a branch to perform a basic transaction.

While we will continue to allow our members multiple channels to interact with UNIFY (branches, contact center, online), we’ll focus on driving more remote member transactions. That’s why we’ve invested heavily in both CU Ledger and Payrailz to ensure our online and remote service offerings stay ahead of the competition.

At this point next year, what would you like to be able to say of your credit union’s performance in 2021?

GH: The most recent CUNA Economic Forecast projects that credit unions, on average, will have an ROA ratio between 0.35% and 0.50% in 2021. If UNIFY’s ROA falls within this range at the end of next year after all the COVID-related deferred loans are either current or charged-off, I’ll be pleased.

These interviews have been edited and condensed.

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