Enhancing Credit Union Relevance in a Quickly Changing World

June 24, 2022
Wescom CU CEO Darren Williams at Corelation

An expansion on Wescom CU CEO Darren Williams’ recent presentation at the Corelation Client Conference by WESCOM RESOURCES GROUP President Dave Cerwinski.

When I joined the credit union movement in 2006, credit unions had about an 8% share of the overall US banking market. Our common view, then and now, was that this share was too small considering the significant advantages we had over banks. In three critical areas – rates/fees, member service, and digital technology – credit unions enjoyed well-established advantages they fought long and hard for.

Wescom CU CEO Darren Williams at Corelation, art sponsored by enacomm

Fast forward to today, and we see a picture we might not have expected. Credit Union market share remains at about 8%. Due to growth, consolidation, and economies of scale, banks have in many cases wiped out the rate and fee advantages we once enjoyed. What’s more, credit unions’ service advantages have apparently eroded. This is difficult to prove, but at least one indicator, the American Customer Satisfaction Index (ACSI) portrays credit unions’ 9-point advantage over banks (84 versus 75 five years ago) on overall customer satisfaction has flipped to a 76 to 78 deficit – an 11-point swing from 2006 to 2021. This same survey also holds that consumers now rate banks higher than credit unions on such metrics as Quality of Mobile App (84 to 83) and Website (83 to 80). This suggests that our Digital Technology advantage has also evaporated.

By observation, we also can see how consumers have changed the way they vote with their wallets. By Raddon’s estimate, three out of four millennials today claim one of the six big banks as their primary financial institution, up from about 50% of the same group just three years ago. And with millennials increasing their influence in the broader economy, this trend does not bode well for credit unions.

It begs the question: How do we remain relevant to consumers for our services in the years ahead?

At Wescom CU and Wescom Resources Group, we don’t fancy ourselves as futurists or visionaries, but we are definitely realists – able to look this challenge in the face and see a path to success. We don’t think for a moment that our solution at Wescom is a universal one. Our situation as credit unions is probably more like a memorable scene from the movie City Slickers in which the character Curly declares, while holding up his index finger, “There’s onesolution to life,” and when asked what that is, he responds, “It’s up to you to figure that part out!”

That said, imperatives faced by every credit union exist in which Wescom Resources Groups can play an instrumental role in carving their path forward.

One imperative is the need for scale. Across all areas of credit union operations, we must find ways to tap into the benefits of greater scale – in systems, platforms, transaction volume, and other processes. The six US mega-banks that have three-quarters of millennials as customers all possess significant scale in their operations. At Wescom Resource Group, we provide our credit union clients access to a platform and hosting center that serves credit unions with an aggregate of more than $23 Billion in assets – and we’re only at 25% of our capacity in that center. This means our platform scales to nearly $100 Billion in assets! This is not the same size as Chase or BofA, but with the diminishing marginal returns the mega-banks get past a certain point it puts us really close! Therefore, a small credit union outsourcing to Wescom Resources Group gets access to platform efficiencies and economies that equip them to compete with confidence.

A second imperative we all face is a need to invest in our people. In today’s market, we need innovators in every area of credit union operation. This includes in traditional areas like lending, member service, and marketing. But in our modern era we also need innovators in areas like data analytics, contact center, and payments. As we grow, we need sufficient organizational size to achieve a breadth and depth of talent in wide areas. We can’t do this single-handedly, we need to do it through leveraging our expertise among each other. The good news is that there’s a sweet spot in organization size when it comes to innovation. Too small, and you can’t afford all the talent you need. Too big, and your people get lost in bureaucracy. Somewhere in the middle is the sweet spot, where innovation reaches is biggest impact. So to compete effectively with relevance against the largest banks, we don’t need to be their same size. We can run swiftly and more effectively at a smaller size, just so long as we’re in the sweet spot.

Wescom Resources Group helps its clients occupy the sweet spot by providing the breadth and depth of our people’s talent across wide areas of IT operations and management, including Computer Ops, Network/Telecom, Enterprise Server Management, Database Architecture, App Development, Business Analytics, and more. A Wescom Resources Group client’s investment in our services enables them to tap into this talent at a small fraction of the cost of fielding this team on their own. And the investment unlocks the ability to redirect their strategic focus into other areas of growth – either through in-house resources, or hopefully via collaboration with another CUSO in different operational areas.

We don’t presume to have all the answers to the hard questions around enhancing our relevance. But we definitely have some of the building blocks. Over more than 20 years as a CUSO, we’ve worked with dozens of clients to arrange these building blocks, sometimes in unique ways, to ensure that in the areas of data processing and management, they have access to an innovative team that large banking competitors would envy! It’s good to have those advantages, and we should take them wherever we can!

Benefits of IaaS for Credit Unions

May 13, 2022

Credit unions, as cooperatives, are already familiar with leveraging economies of scale through collaboration. Your digital infrastructure is no different.

Infrastructure as a Service, or IaaS, allows credit unions to securely scale technology and capabilities at a fraction of the cost through service providers. Typically, IaaS includes everything from servers to storage to networking and operating software – the entire stack. This can be used exclusively or in combination with on-prem technologies.

All seeing eye representing comprehensive technology for Infrastructure as a Service (IaaS) for credit unions

Credit unions can enjoy many benefits of this model. First and foremost is scalability; add and subtract based on your needs without taking up space and wasting resources. Use what you need and eliminate management tasks by outsourcing them to your provider. Think of what your IT team can accomplish when they are no longer responsible for the mundane, frequent patching and testing. Consider the security of having experts solely dedicated to preventing and monitoring for internal and external threats and acting quickly and automatically when a threat is detected.

And at a fraction of the cost!

IaaS also improves the reliability of your technology for your staff and your members. No more stressing about your systems going down. IaaS can provide data backups and automatic failovers to keep your member data secure and the credit union up and running!

The Power of a CUSO

And with a CUSO, all of that is even better because IaaS is built specifically for credit unions by credit unions. Product support is optimized for credit unions’ data management needs, like routine job automation and processing, network load balancing and firewall, storage area network, data backup and ransomware protection.

Plus, subject matter experts for credit unions in Information Security, Host System Programming, Server Administration & Engineering, Network & Telecommunications and Host Computer Operations. Copious, highly specific expertise can be obtained at a much-reduced rate than a single credit union would invest to staff up, thanks to the power of collaboration.

The Power of Wescom Resources Group

Our people, products and processes provide credit unions with access to the scalability, security and reliability they require to thrive in an ever-changing, digitally driven world. Wescom Resources Group’s experts deliver 24/7 focused support, making your credit union’s systems ultra-secure and highly available. 

We can make that claim because our Unitri data management features:

  • Two separate data center locations
  • Primary system capacity for client-provided servers or leased access to our shared systems
  • Failover system capacity via leased access to our shared systems
  • Numerous system hosting features.

And Wescom Resources Group’s team updates, tests and has those systems audited on a regular basis to ensure our clients’ business continuity for their members. We save your staff a tremendous amount of time by handling repetitive work activities, allowing them to stay focused on strategy and innovation. Learn more about Wescom Resources Group’s Unitri Data Management here!

Choosing Credit Union Data Management Models: Public Cloud versus Private Cloud versus Hybrid 

March 7, 2022

Of the many hosted services and applications your credit union runs for serving your members or supporting employees, each of them are in various stages of evolution toward the cloud computing model. Much has been published about the general benefits of moving to the cloud across industries. But in credit union data management, there are unique aspects to consider. 

hybrid cloud versus private cloud versus public cloud computing for credit union data management

To help you sort through the noise, here’s a quick primer on the pros and cons of private clouds, public clouds, hybrid clouds, and traditional in-house IT infrastructure, specific to credit union data management and processing. As we go along, we’ll also mention the areas that WRG supports credit unions in.

A public cloud platform is provided by…

Contact Wescom Resources Group today to learn more about how our Unitri platform can help your credit union with data management, allow IT more time to work at a strategic level to grow your credit union and better serve members, and save time, money and headaches.