Credit unions are formidable competitors within today’s financial market space. Their boards are responsible for setting and achieving short- and long-term goals. To a large extent, they’re succeeding. Although they’re not banks, credit unions face the same pressures as other financial institutions to manage risk, to strategize for profitability and to protect their customers. Similar to banks, credit unions are continually being challenged by rapid societal and economic changes. In addition, great advances in technology have brought many threats and opportunities to challenge boards even more.
Credit unions exist for the benefit of their members. That means that board decisions have a great impact on how well customers are served. Reliable board solutions improve governance, address the potential for disruption, help boards adapt to changing consumer behavior, enhance efficiency, and realize cost savings and security.
A reliable board management solution helps to improve governance, which leads to enhanced board performance. Board portal software also helps credit unions to improve compliance and manage documents more efficiently, as well as to enhance transparency and accountability.
Topics such as succession planning, board composition, board recruitment and board refreshment are important governance issues of today. Board portal software can help boards to incorporate hot topics such as diversity, inclusion and board refreshment into consideration when working to improve board composition and performance.
Addressing the Potential for Disruption
According to the 2018 McKinsey Global Survey, corporate leaders identified the top nine areas of potential business disruptors. They are:
- Changing customer behavior and preferences
- Disruptive business models
- Regulatory changes
- Political risks
- Geopolitical risks
- Diversity of organization’s leadership
- Activist investors
Each of these disruptors poses serious risks to credit unions, and it’s imperative for boards to evaluate how each could negatively affect their credit union customers. Two disruptors are of specific concern to credit union customers, and those have to do with cybersecurity and changing customer behavior. Digitization is a tool that has the potential to help boards make improvements in both areas and in most other areas as well.
Gaining an Edge on Changing Consumer Behavior
Advances in technology have changed how we work, live, play and do our banking. In past times, banks set up their offerings based on what they were able to offer. In today’s world, that’s just not effective. The market power today lies in credit unions providing the products and services that customers want and need.
The behavior of banking customers has changed over time. To be effective, boards need to look at what is causing their members’ behavior to change.
Data helps boards to understand differences in customer dynamics, such as the differences in how different generations approach decision-making about their banking, spending and saving habits, and life choices. The McKinsey survey tells us that 64% of boards stated that they had put changes in customer behavior on their board agendas based on new data they’ve received.
Boards need to remember that technology is bombarding their credit union customers with information every time they go online. Many people are online most of their waking hours. Ads and other propaganda have a strong influence on their choices of banking institutions and other financial decisions.
The baby boomers have long been credit union customers. As new generations surpass their numbers, credit union boards must pay attention to the buying, saving and spending habits of the newer generations.
Efficiency and Cost Savings Create Value
Drastic changes in the financial landscape call for greater efficiency and an eye on cost savings. Board portal software is your answer for efficiency and cost savings related to meeting planning. The software cuts meeting planning down by several weeks to just a few hours. Directors and executives can easily access documents and board materials at any time and using any mobile device. Since documents are updated in real time, directors get the most updated version every time they log in.
Getting a Firm Grip in Cybersecurity Issues
Cyberattacks are a major threat for business leaders, especially credit unions, because of the sensitive data they collect. Banks and credit unions rank third among industries with the highest percentage of data breaches.
The Internet of Things is growing every day and it’s causing greater connectedness. Despite the usefulness of connectivity, it’s also creating an environment of greater risk. The McKinsey report also showed that 37% of board directors were having regular discussions in the boardroom about cybersecurity. Credit union boards face a host of additional risks, including operational, reputational, market and business risks, as well as fraud.
A board portal software system by Diligent Corporation gives board directors a secure platform for communication, collaboration, meeting preparation and file-sharing.
What Is the Significance of a Board Portal Solution for Canadian Credit Unions?
The citizens of Canada rely on their credit unions as a viable and necessary alternative to other types of financial and banking institutions in the country. Canadian credit unions are proud of their longstanding reputation as award-winning financial services institutions.
According to the Canadian Credit Union Association, for the 15th consecutive year, Canadian credit unions won multiple awards in the Ipsos CSI Financial Service Excellence Awards. Credit unions were recognized in seven categories and won four times as the sole winner. Credit unions took prestigious wins in the categories “Customer Service Excellence” and “Values My Business.”
In 2019, scores for the full year place Canada’s credit unions ahead of the Big 5 banks in every category. Credit unions led banks by 17 points in the category “Value for Money” and by 16 points in the category “Recommend to Family and Friends.”
Credit unions offer a full range of retail banking services to over 5.7 million Canadian citizens. In all, Canada has 241 credit unions, which generate over $6.5 billion for the economy. With over $225 billion in assets, credit unions are industry leaders in small business lending.
Credit unions have established a quality reputation in the financial industry in Canada and in other parts of the world. Moving forward, credit union boards will need to put their trust in reliable board portals and other digital solutions to address the potential for disruption, protect the board’s business from cybersecurity issues, and operate with efficiency and cost-effectiveness. Board technology is a business staple that will help board and credit union boards of the future to continue providing Canadians with the highest-quality financial services for their members and their families.