How Can Technology Improve Your Credit Union's ROI?
Strategic business decisions are either enabled or hampered by the available technology. Return on Investment is hampered if the technology investments that stem from the business decisions are not aligned. From configuring product and service offerings with the core system to extending those offerings through the integration of third-party applications, business strategy is ultimately impacted if a technology plan is not a function of the business plan. So how can the technology investments that your credit union has made, or is looking to make, improve your credit union's overall ROI? The key to improving ROI is to align your technology with your strategy and utilize appropriate tools that will help your credit union improve its overall performance. Improvements may take the form of reducing costs, increasing revenues, growing loans and deposits, or increasing the value of what you provide to your members. Regardless of the areas of focus, the ability to rely on a valued, strategic relationship that helps you develop and fulfill a vision for the future of your credit union is paramount to the success of the desired performance improvement. This "one-stop/value added" approach is not a new concept but certainly one whose time has come. If you were to break down the areas that comprise an optimally run credit union, you might look first to see whether your credit union has the appropriate infrastructure to enable the adoption of the right technology. The infrastructure should provide for seamless integration to the applications necessary to enable "one view" of your member. This translates into a continuing effort to move beyond interfaces to true integration where applications are performing bi-directional data exchanges with multiple applications. Disparate systems in today's environment will not provide the access to information your staff needs in order to service your members appropriately. The infrastructure also needs to have the ability to adapt to applications outside of the core and provide tools to easily connect to those products. If investments have already been made, wouldn't it be nice to connect that technology to the core and have an integrated, comprehensive solution for the future? In today's innovative technology environment, it is more than possible, it's here. Lastly, the infrastructure should offer solutions that can provide your credit union with a competitive advantage, a differentiation strategy and promote growth. These solutions might be noninterest income sources such as privilege pay, line-of-credit increases or solicitations, or relationship pricing, and they may be options for loan growth, particularly in the fast growing commercial market, but also in mortgages, used autos, credit card loans and indirect lending sources. With a solid infrastructure and the flexibility to provide these solutions, the credit union will reap the benefits of the adopted technology much quicker for a lower total cost of ownership and ROI will be realized much sooner. Opportunities for growth should also be examined and a focus on member demographics can assist in analyzing whether your credit union is offering the right products and services to the right members, at the right time and in the ways that they want those services delivered to them. Is marketing effective in what they do or do they need tools that can provide better information regarding the value of a member and the likelihood of that member purchasing a particular service when they need it? Relationship management and business intelligence solutions provide staff the tools to easily access member information and empower them to cross sell at appropriate opportunities. Analyzing your loan portfolio will provide insight as to whether the right loan mix is being offered given the demographics of your market? Analyzing your demographics may also give you insight in how to grow deposits in a time when many credit unions are experiencing flat or negative growth. An internal look at operational efficiencies gained through automation and a possible realignment or reduction of headcount, integration of systems, optimizing existing capabilities and resources, and utilizing self-service channels can deliver cost reduction and improved ROI. Are devices and solutions in place to promote automation such as unattended back office processing, automated loan decisioning, signature pads and real-time archival and retrieval capabilities? Is the integration between applications true and eliminating duplication of effort and re-keying of data, or is your credit union still working with disparate systems? Are you offering the appropriate self-service channels in the right locations to provide the convenience your members need? If your credit union is lacking in some of these areas, a measurement of net interest margin, net operating expenses and automation may reveal opportunities for improvement. There are tools available today to address each. Security is always top of mind regardless of how ROI is being measured. So another area to scrutinize is security and the current measures in place to protect against credit union and member loss as this will play an important role in whether satisfactory ROI is attained sooner rather than later. Is the institution able to operate on a truly 24x7 basis with appropriate backup systems in place in case of disaster? Do the high availability solutions in place provide for physical and logical data integrity? Are encryption and dual factor authentication solutions enabled to reduce possible security breaches? The right strategic partner is critical to achieving these objectives. So when considering your options, look for a provider who has moved their own business model beyond being a technology product sales organization to one which has embraced and developed the capacity to work with you at a strategic business services level.