Regarding Sarah Snell Cooke's Editor's Column in the Sept. 14 issue. Best editorial yet.
Managing credit unions in the next 10 years will be harder than the last 75. The industry's business model has to change and become more efficient to add greater value for our members. The mature market dynamics of the financial services industry requires us to innovate for sustainability.
Think of the innovation that took place in the late 1970s and early 1980s, like real- time transactions, share drafts, CDs and IRAs, ATMs and branch expansion. That period represented historical growth for credit unions. Banks were pushing consumers out their doors, which allowed us to play catch. Most of our existing CEOs and board members were driving change during those exciting times. These strategic decisions were a result of remarkable leadership and courage to take the long view.
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So why are we collectively sitting on our hands and waiting for the margins to return?
Financial services and consumer behavior are changing. One of the largest threats and opportunities for credit unions is electronic payments and POS transactions that bypass the card industry.
The threat is not reduced interchange fee income; it is no interchange fee income. Frustrated merchants and youthful consumers will move much more quickly to another seamless payment option. There are many younger managers that are trying to tell us the world is changing. We need to listen.
If we can change the focus from next year's earnings to embracing the strategic possibilities of leading the transformation of the financial services industry, credit unions will thrive not survive.
There simply is no greater competitive advantage than the cooperative model and talented managers are frustrated we are not moving faster to capitalize on market dynamics. The youth of today want to make a difference now.
The credit union movement has not been presented with this big of an opportunity, to make a difference in the lives of our members, since our formation during the Great Depression.
Mark Twain also said, "I was seldom able to see an opportunity until it had ceased to be one."
Dwayne Naylor
Executive Vice President
Langley Federal Credit Union
Newport News, Va.
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