It's no secret that credit unions are experiencing unprecedented challenges. And to address them most effectively, several credit unions are finding there is strength in numbers. From ever tightening margins to a more intense regulatory climate, and from keeping up with members' demand for "anytime, anywhere" services, to finding cost-effective back-office vendors, credit unions have many critical issues on their plates. But rather than figuring out courses of action on their own, regional leaders from a group of mid-sized credit unions on the East Coast have collaborated to create what they call the "Virginia & Carolinas Roundtable."
Together, roundtable members identify, discuss and vet the issues they face. The result has been an effective partnership for sharing resources and implementing solutions to many of today's challenges.
From just eight participants three years ago, the roundtable has grown to include 20 innovative and forward-thinking, federally insured credit unions, dedicated to actively identifying opportunities to maximize value to their members. Collectively, they represent more than $1.6 billion in assets and 230,000 members from Maryland, North Carolina, South Carolina, Virginia and Washington, D.C. Participants meet semiannually, investigating and discussing relevant financial/credit union topics or emerging issues previously identified by the group.
Participating credit unions often use these white papers and group discussions as a springboard for further action, working collaboratively with vendors to perform any work required on a given project. However, the roundtable credit unions incur minimal expense; only those electing to pursue a specific project share in its cost.
The roundtable's semiannual, in-person meetings offer credit unions a source of support and a forum for discussing shared concerns. But its primary value comes from meeting to identify and solve real-time issues. The collaborative process offers participants the opportunity to pursue initiatives that many midsized credit unions could not afford on their own.
One example of a successful collaboration was developing a shared vendor-management program. Through it, participants are able to create and share vendor-management policies and procedures, along with tools for performing due-diligence evaluations on service providers. And by working together on the vendor-negotiation process, they achieved better pricing than if they had worked independently. Further, the effectiveness and cost efficiency of the program have been received favorably by regulators.
Roundtable members are in the process of creating a scalable compliance-sharing model incorporating regulatory interpretation and compliance administration. Through this model, participants can keep pace with today's complex regulatory environment by building enhanced competency at a price point that is unattainable by any individual credit union.
In another case, interested participants used "group clout"
to negotiate an online auto-lending program. By utilizing a collaborative model, the group was able to take an otherwise competitive landscape and lock down the market for the exclusive benefit of participating members. This allowed the members to secure a new auto-lending access channel and gain a further competitive advantage. And most recently, the roundtable has begun to wrestle with the development of collaborative models for obtaining and developing enterprise risk management programs.
Many in the industry have found that collaboration provides significant value and cost savings. But it's only successful when participants are truly committed to making it work. The credit unions participating in the roundtable have all committed to the collaborative effort, from a time, energy and monetary perspective. This commitment not only ensures that the group is able to maximize its opportunities, but provides accountability among group participants.
Working together isn't new to the credit union industry; it's our shared heritage. But finding creative ways to cooperate in today's fast-paced, volatile environment can make a big difference on credit unions' bottom lines. The benefits range from economies of scale, to negotiating power, to faster results and a ready product/service test market.
If your credit union is considering working with others to create a formal process of collaboration, remember the following tips:
Be flexible. How you set up your collaborative efforts will evolve over time, so it's important to build room for change and growth into your structure.
Build trust. Even when working with respected colleagues, trust takes time and happens primarily through an environment of transparency. Successful collaborations are equal parts give and take.
Utilize outside expertise. Collaborating pays off over time, but your group will need both structure and facilitation to push your initiatives forward. Choose a skilled external facilitator who can be impartial, create structure and be the group's "arms and legs."
Seek like-minded partners. Start with group members who have a common purpose and are looking to build the same types of efficiencies, develop similar products or solve shared problems.
Tony Ferris is a partner with ?
the Rochdale Group. ?
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