LOS ANGELES – In an industry sometimes permeated by a “this ishow we've always done it” attitude, innovation can easily fall intothe nice-to-have category. However, in today's hectic financialmarketplace, innovation has become a strategic and competitiveimperative.

This point was driven home Tuesday by two consecutive sessionsat the California and Nevada Credit Union Leagues' REACHconference.

The first was a panel discussion called IndustryInnovations which was moderated by Mollie Bell, chiefengagement officer at the Filene Research Institute. The panelistswere Sarah Canepa Bang, chief strategy officer at CO-OP SharedBranching, Eric Cotter, vice-president of Automotive Products andInnovation at CU Direct and Erik Vandermause, vice-president ofTruStage Innovation and Channels at CUNA Mutual Group.

The second session was Filene Institute's InnovationImmersion Workshop, a 90-minute version of a Filene workshopthat normally requires a full day. Andrew Downin, innovationdirector at Filene, and Chris Fraenza, Filene's impact manager, ledthe session.

“At its core, innovation is the ability to empathize with yourcustomers and understand their needs so well that you can readbeyond what they tell you their needs are, and to create divergentapproaches to meet those needs in ways that you can measure successand satisfaction,” Cotter said in his opening comments.

Along these same lines, Vandermause said that CMG definesinnovation as “solving a problem or delivering on a need for acustomer in a new way.” He added, “Everyone in your organizationshould be involved in innovation. It's not just about onedepartment.”

“Innovation is about solving a problem,” reiterated Canepa Bang.However, she was quick to point out that credit unions don'tnecessarily have the same resources as larger financialinstitutions, calling on credit unions to think creatively in orderto innovate on a budget.

“Innovation is transitioning from a buzzword to a necessity,”Downin said in opening the next session. This is due in no smallpart to the fact that many credit union competitors are at theforefront of innovation. These include both traditional andnon-traditional competitors. Downin noted Wal-Mart and its line ofBluebird financial products as a non-traditional competitor with afocus on innovation.

Downin also said innovation is actually more profitable than anumber of other popular business strategies. He showed Fileneresearch that ranked five strategies in order of profitability:

1. Innovation
2. Delivering high-quality products and services
3. Focusing on the “voice of the customer”
4. Providing quick delivery
5. Offering lower prices

Throughout the presentation, Fraenza provided insights intovarious innovations that have been developed by Filene's i3program. Among them was a program called SavvyMoney Checkup, aweb-based system that allows credit union members to measure theirfinancial health in an entirely anonymous environment. This in turnled to a broad range of other SavvyMoney products and services,many of which are detailed at www.savvymoney.com.

One final tip on innovation from Downin: “We have such anopportunity as an industry to collaborate on innovation. Takeadvantage of that.”