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To begin, let’s clarify this cold business of banking. A credit union, not unlike a bank, is a financial intermediary at its core. Specifically, it is a depository financial intermediary whose primary function is to consolidate deposits and channel the funds into lending activities. In performing this function, FIs facilitate the transformation and benefits of maturity, risk and liquidity between savers, borrowers and third parties, which enables profit and efficiency in exchange. In this sense, credit unions offer a commodity in the banking space; that is, its solutions have the mark of substantial fungibility in that they are easily substituted with competing solutions of the same type, like it or not.

Notwithstanding, a credit union’s purpose and structure are unique from other FIs. Their purpose and structure, which is that of a consumer cooperative, appeals to a higher calling than just mere profit. This calling provides a meaningful mission to participants that is invigorating, engaging and sustainable. This higher purpose, which cannot be undervalued, provides an inherit advantage to credit unions in the banking space. However, while mission and structure provide the passion and framework for fueling the activities in our industry, these alone will not sustain the movement. Transforming a banking commodity into a preferred, consumer demand today can be accomplished most effectively through digital transformation – which has digital intimacy as its goal.

Digital enablement has been occurring for decades, obviously. At the age of 17, my best friend introduced me to a drive-up machine called a cashbox, which to my amazement spit out cash. The year prior, when I sought my first car, my dad took me down to the railroad yard where he worked, and we waited in the railroader’s smoke-filled break room for a member of the train crew, who was also a credit union volunteer, to come off the train, open a small office, hand-write a simple note, make some journal entries, request signatures, unlock a real cashbox and hand over $600 in cash. Now that was a streamlined loan origination and funding process if I ever saw one. It was based on relationship, and this is the meaning of digital transformation – to humanize the experience.

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