By any standards, this is perhaps the toughest time ever to run a credit union. Tight net interest margins, rising labor costs, ever-increasing competition, and flat membership growth all combine to create an extremely challenging environment in which to operate. It's precisely this kind of environment that proves the wisdom of the old adage: Work smarter, not harder.

Increasingly, the concept of working smarter means creating operating efficiencies that enable you to drive down the cost of doing business, whether it's the cost of labor, facilities, materials or other expenses. But that can be tricky. Take labor as an example: If you focus on service as your differentiating model, then you can't sacrifice the quality of your workforce simply to reduce your salary budget. The cost of facilities is another case in point: If you run a community-based credit union, you've probably found that in order to attract members from new areas, you need to invest in a brick and mortar presence there regardless of how many remote delivery channels you offer.

The key to working smarter is to create efficiencies that don't diminish the quality of your product or service offering and that don't hamper your ability to add, retain and serve members. For many credit unions, the answer lies in leveraging technology.

Used appropriately, technology offers opportunities to realize operating efficiencies that make your credit union more competitive. In some cases, those opportunities exist right under your nose through the technology already installed at your credit union. Nine times out of 10, you'll find that you're not using a particular solution to its fullest potential or some employees don't know the full range of functionality you've already invested in. Given the turnover rate on the typical front line and the steady stream of new functionality delivered by most core system providers, it's easy to see how this happens. And when it does, your staff ends up creating workarounds or using manual processes to accomplish tasks that your software can automate.

To avoid that problem, it pays to invest in an audit or review of your core system, with a goal of finding ways to better use the technology you already own or can add easily. Most core system providers and many other technology companies offer this service, and in my personal experience, credit unions that use it realize substantial dividends. Review your audit findings and analyze the return on investment of each recommendation, and you're sure to find a fast payback by using the functionality you have in place or making incremental investments in new efficiency boosting features.

An optical or records management system is a prime example of technology used by many credit unions but not always to the fullest. Often, credit unions fail to go beyond the initial application of scanning paper documents or storing cold data like reports. Fully leveraging this technology–by integrating it with complementary solutions–is a great way to reduce your operating costs. If you already use an optical or records management solution, look for ways to build on it to deliver nearly any form of information to members electronically, including receipts, statements, daily notices, even security alerts. You'll reduce paper and postage costs, avoid hiring new staff to handle manual tasks and free your staff to focus on more strategic projects.

Technologies Can Make Processes Seamless

New account openings are another area where technology can improve efficiency and reduce costs. Open an account in a branch and it will cost you at least $40 by industry estimates. Open it online and the cost drops to about $15. But if you decide to enter the world of online account opening, don't make the mistake of thinking that if you build it, they will come. Enticing new members to open accounts online involves more than adding a form to your Web site; it requires supporting technologies that make the process easy and seamless for members and efficient for staff. If a prospective member must answer the same question multiple times, he or she may abandon the application. If your staff has to re-key data from one system to another, you'll quickly dilute the potential efficiency gains and cost savings.

Regulatory compliance is another place to look for efficiencies that create a competitive advantage. If you only view compliance as a necessary evil, you're missing opportunities to cut costs, especially when it comes to labor. Some regulatory requirements–like anti-money laundering monitoring and case management or completing 5300 call reports–can tie up your staff for days. As the regulatory workload goes up, your head count is in danger of going up, too.

The right technology can automate those processes, often to the point that entire days of work are eliminated. Rather than tie up costly labor on tedious regulatory requirements, you can focus them on tasks that improve member service. If you calculate how many hours a given regulatory task takes to complete and the hourly rate of the associates who do the work, the numbers, and the potential payback, may surprise you.

For every process in your credit union, there's likely a technology that can help you complete it more efficiently and at a lower cost. Some are already installed and just waiting to be used more fully. Others are easy and affordable add-ons. By making smart choices about how you apply and leverage technology, you can turn today's tough times into an opportunity to strengthen your competitive position.