Four Conference in Four Days

I just got back from a great trip. I attended four very different conferences in four days all in my timezone!

1) IT governance course in Vancouver

I took my first formal course as a new credit union board director. It was an IT governance introductory course offered by CU Source held in Vancouver on the first day of the Credit Union Central of Canada 2012 Canadian Conference for Credit Union Leaders (yes, that is the longest conference title ever). As information technology is now the second largest expenditure at most credit unions – human resources is typically the largest – it's becoming more and more important for board members to have a deeper understanding of what's going on with the technology in place at their credit union.

Take aways: The course was a good overview, if not a little basic. The focus was more about risk mitigation versus using technology to serve members better. I suppose this will always be the case in such a heavily regulated industry, but I couldn't help feeling that the typical, cautious wait-and-see approach contradicts the notion that credit unions are smaller and, therefore, more nimble. Because most credit unions now out source so much of their IT systems, they can't be nimble – they are at the mercy and time lines of large, expensive and slow-moving vendors that have hundreds of financial institutions to service. In Canada, we're starting to see the big banks really take the lead on implementing technology tools like mobile banking and personal financial management. On a positive note, I think a smarter, more connected board is a really good thing and I appreciated the overview.

2) Filene i3 in San Francisco

I was in invited by the Filene Research Institute to be guest at the i3 group presentations. What's i3? "Ideas, innovation and implementation. Filene i3 is a work group of innovative, insightful and energetic credit union professionals who have not yet reached the CEO level, but are in a position with substantial responsibility. This creative group reflects diversity in experiences, credit union positions, geography and credit union membership. i3ers strive to be transformational leaders in building the future of credit unions and to create new ideas, innovate and implement for the benefit of the credit union industry."

Eight i3 teams, made up of three to five credit union employees, presented their finished projects to an audience of approximately 75 people.

Take-aways: It was encouraging to see the Filene i3 model in action. The credit union industry is old and largely stuck in its ways, but here is a group of people working hard to disrupt and reinvent the credit union movement from the inside out. There were two expert panels made up of accomplished entrepreneurs, scholars and academics that provided feedback to four groups each. Each expert added insightful advice couched with fairly gentle criticism. The ideas were solid, but not necessarily ground-breaking or fully baked. This is to be expected – i3ers are volunteering time outside of their jobs and day-to-day lives.

3) FinovateSpring in San Francisco

I attended the first day of FinovateSpring. Imagine 63 companies all given seven minutes each to demo their working solution to a crowd of more than 1,200 connected critics. No PowerPoint. No faking it. Here are the words that come to mind. Huge. Intense. Fast-paced. Overwhelming. Impressive. Too much. Future. Innovation. Awesome demos and products. So-so demos and products. Zuckerberg-like, T-shirt-wearing geeks rocking their demos. A few ex-bankers trying to be cool, but instead come off slightly awkward on stage.

Take-aways: Going in, I was nervous for credit unions. I was thinking that I was going to witness enormous disruption aimed at toppling incumbents. This wasn't the case. Instead, what I saw was highly polished companies with amazing software looking for partners, investors, clients and distribution channels. These start-ups are well funded with millions sunk in development and now they are looking for a return. Most were pitching the financial institutions in the crowd to implement their white-label solutions. Here are the best of show winners as determined by audience vote (in alphabetic order):

• BehavioSec for its new security layer based on user typing/swiping patterns
• BillGuard for its card charge dispute platform, BillGuard FI
• Dwolla for its FISync service to enable banks to originate real-time payments
• iQuantifi for its new financial planning and advice tools
• MoneyDesktop for its PFM platform and integrated "deals"
• Personal Capital for its iPhone app and interbank funds transfer
• SoMoLend for its P2P lending platform

It was good to see a large contingent of credit union people there, thanks, in large part, to Filene. 

One sobering note: I was struck by the contrast between the i3 pitches and the Finovate pitches. Finovate is the big leagues. The solutions presented were fully baked and ready for market. You could tell that millions upon millions of dollars had been spent before anyone stepped on stage. The demos showed that the best technology minds in the fintech space are feverishly working at solving big problems. These firms are not regulated and are not stuck in their ways.

This is not a new wake-up call for credit unions – it's the same song I've been singing for years. But what was new for me was how in my face this reality was at Finovate. These solutions are real and they're spectactular! My hope is that credit unions get onboard and partner with the best solutions to offer their members more compelling reasons to stick around. I think Filene is well positioned to facilitate this connection between Silicon Valley and the credit union industry.

4) NCGA Marketing Matters in Portland

For my last stop on my whirlwind Westcoast tour, I was the keynote speaker at the National Cooperative Grocers Association Marketing Matters conference in Portland, Oregon. I did two talks:

1. The Young & Free Story
2. Integrated Social Media Marketing

Take-aways: I learned that there are a lot of parallels between credit unions and cooperative grocers. Shared challenges include awareness and understanding, selling member shares, economies of scale and confusion with competitors – community banks for credit unions and Whole Foods and Trader Joe's for cooperative grocery stores. And wouldn't you know it, cooperative grocers are also finding it difficult to attract Gen Y! I attended the reception on day one and it was like being in a credit union parallel universe with such similar conversations!

The highlight was someone telling me, "I can't believe you made me cry about overdraft fees." Ha!

In this International Year of Cooperatives, there seems to be a heightened realization that credit unions are cooperatives and that there is potential for cooperatives of different stripes to work together. This is a good thing.

I ended my second talk with some fun. Check it out (and pardon my shaky iPhone camera work).

Tim

Young & Free Jam

I received a Twitter direct message from Matt Hawkins today letting me know there was a mystery video in my Dropbox. Matt does a bunch of freelance video production for us and it turns out that he secretly recruited three of our Young & Free Spokesters to create a special birthday gift for Cheryl Wiens in our office.

Behold the ridiculousness of Lee Taylor in Alabama, Michelle Peterson in New Mexico and Kaylie Dame in Ontario. Nothing to do with money, financial literacy, credit unions or anything really.

Happy early Birthday wishes Cheryl! Enjoy.

Tim

Do you know who you don't want to do business with?

Every company has had an infuriated customer phone in and complain. I'm sure your credit union has had plenty. The Alamo Drafthouse Cinema in Austin, Texas received this gem of a voicemail and rather than cowtow and apologize, they posted it to YouTube last week and have racked up more than a million views.

Warning: it's totally uncensored

This is clearly a customer type that the Alamo Drafthouse Cinema would rather not do business with. This is a sign of a confident brand. Branding is as much about saying no as it is about saying yes. Obviously, this is an extreme example, but it brings up the point: Does your credit union know who it doesn't want to do business with? Not simply by mandated geography or seg, but those people that do qualify for membership, but you simply aren't interested in doing business with?

It's interesting that credit union professionals talk about growth, but rarely do they talk about what kind of growth.

Worth considering.

Tim

P.S. Could you imagine the uproar if a credit union or bank were to post a video like this? Wow!

Newsflash: Credit unions losing favor with young consumers!

This press releases from MyCUSurvey.com caught my eye this week. 

MyCUsurvey.com National Member Research Reveals Credit Unions Have Less Appeal for Young

The latest survey revealed a direct correlation between the age of credit union members and customer satisfaction. According to the findings, there is a 30 point difference in satisfaction ratings between older members (over age 65), and younger members (under age 30); older members are just more satisfied with their credit unions.

Great, so in addition to the fact that credit unions are having extreme difficulty attracting new young members, we now know that they are doing a poor job at satisfying those young members that they do have. So, what to do about it? The founder of the study, Dr. Jack Bieda, offers this advice:

“The convenience of web and mobile banking and other trends are undermining credit union member satisfaction. It’s clear that credit unions need to find a way to attract younger members and get members to visit their branches for a more personalized banking experience in order to cement the member relationship.”

I agree that credit unions need to find a way to attract younger members, but thinking that getting them to visit a branch will do the trick is exactly the opposite of what young people want. What they want is "the convenience of the web and mobile" that most credit unions simply don't have!

This advice is like telling the record stores of a decade ago that the best way to combat digital downloads is to get young people into their stores. Or advising the newspaper industry that the best way to combat Craiglist is to find a way to sell more classified print ads.

How about advising credit unions to become better at web and mobile banking?

Tim

System or movement?

Is the credit union industry a system or a movement? I think it depends on what side of the US-Canadian border you are on. I often contemplate this question, since I split my time between what I would call the Canadian credit union system and the U.S. credit union movement.

Here's a definition of "credit union" from Wikipedia.

A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at reasonable rates and providing other financial services to its members. Many credit unions exist to further community development or sustainable international development on a local level.

Worldwide, credit union systems vary significantly in terms of total system assets and average institution asset size, ranging from volunteer operations with a handful of members to institutions with several billion dollars in assets and hundreds of thousands of members. Credit unions are typically smaller than banks; for example, the average U.S. credit union has $93 million in assets, while the average U.S. bank has $1.53 billion, as of 2007.

The World Council of Credit Unions (WOCCU) defines credit unions as "not-for-profit cooperative institutions." In practice however, legal arrangements vary by jurisdiction. For example in Canada credit unions are regulated as for-profit institutions, and view their mandate as earning a reasonable profit to enhance services to members and ensure stable growth.

This difference in viewpoints reflects credit unions' unusual organizational structure, which attempts to solve the principal-agent problem by ensuring that the owners and the users of the institution are the same people. In any case, credit unions generally cannot accept donations and must be able to prosper in a competitive market economy.

It's hinted at in the article, but I can assure you from first-hand experience, that the vibe on either side of the border could not be more different.

The Canadian credit union system

I would argue that in Canada, the leaders of the credit union system view the industry as a utility. Much like plumbing or roads, the pipes are there to move money and to share resources and technology for the purposes of competing against the large national banks. There doesn't seen to be much politics or lobbying involved. Credit unions pay taxes and are not subject to the intense regulatory oversight that credit unions in the US face. For the most part, there are no fields of membership in Canada. Anybody can join any credit union in their province. Canadian credit unions cooperate on a business level, not an emotional level. It's very systematic.

The US credit union movement

In contrast, the credit unions in the U.S. are far more warm, fuzzy and political. For instance, there is simply nothing in Canada on the provincial or national level like the CUNA Government Affairs Conference—an annual gathering of the U.S. credit union movement where thousands of credit union leaders gather to visit Capitol Hill in a cooperative effort to propel the U.S. credit union movement forward.

Of course, U.S. credit unions are linked together for payments and technology, but the relationship between U.S. credit unions seems to be more linked by a common fight against banks, laws, regulations and political forces. There are so many banks in the U.S., whereas in Canada, there are less than a dozen. Because of this adversity and diversity within the marketplace, the credit union industry in the U.S. feels more like a movement—constantly fighting the good fight.

Another major difference that further emphasizes the system-movement difference is the size of credit unions. In Canada, there are only a handful of credit unions with less than $25 million in assets, whereas in the US, more than 50% of credit unions have less than $25 million in assets. In Canada, credit unions have more than 20% of the mortgage business, while in the U.S., credit unions have less than 2% of the mortgage business.

Does it matter?

As a generalization, I think that U.S. credit unions and credit union people are more in touch with the core cooperative principles and that Canadian credit unions and credit union people are perhaps a little more like bankers. And by that, I mean that, in most cases, decisions are made more by the book and less by the individual case.

I'd hazard a guess that the credit union members on either side of the border are interchangeable. Although, a Canadian is likely more able to tell you the difference between a bank and a credit union simply due to the fact that there are no community banks in Canada. This makes the difference more obvious when comparing trillion-dollar national banks to local credit unions.

Is one side of the credit union border better than the other? There are so many factors—from differences in the size of the two nations and the two economies and the very different competition that credit unions face in Canada and the U.S.—that the answer isn't black and white.

From a pure business standpoint, Canadian credit unions perform better. From the members' standpoint, I'd say that the answer is unclear.

What do you think? I'd love to hear from credit union people on both sides of the border. Is it just semantics—this system versus movement argument—or is it deeper than that?

Tim

2 Credit Unions + 2 Marketing Directors + 2 Spokespeople = A Ton of Fun!

On Saturday, October 22 I attended the University of Tennessee football game with Jessica, Alex and the Gen Y Team at ORNL Federal Credit Union, the folks that make Young & Free Tennessee a rockstar success in Knoxville. 

Since the Vols were playing Alabama, the reigning National Champions, the Young & Free Alabama team couldn’t resist rubbing it in that Alabama and the team at Listerhill Credit Union are also awesome (both on and off the football field), and so Kristen, Deanna, Nicole and Chris made the road trip for some tailgating, fiercely competitive corn-hole matches, and flip cup – a bunch of good ole southern fun packed into a fall afternoon on a perfect day for football.

Two Young & Free credit unions together in the same location is a rarity, so I took the opportunity to ask the Marketing Directors and the spokesters about their jobs working on the Young & Free program. Hope you enjoy the video!

Cheers,

Sandy

There actually IS meat on bacon!

Most of you have probably seen that Cheryl and I have thrown our collective hat in the ring to be the CU Water Cooler Symposium WildCard Speaker.

When you work in marketing and advertising, surrounded by fun co-workers and fun clients, on an incredibly fun and innovative product (Young & Free) it's hard not to let that spill over into contest entry for a wildcard speaker’s spot (as evidenced by our most recent campaign video).

But we want to clarify something—our presentation isn't going to focus on funny videos and bacon, it's going to delve into research we are doing with Gen Y'ers in regards to their use of social media platforms.

We are asking a cross section of young people across North America about:
• Which platforms they use
• What they actually use them for
• What they would never use them for
• And how they perceive businesses interjecting in those spaces

(just to name a few)

We will be compiling these results and sharing 3 practical ways that Credit Unions can take this information and implement a social media strategy in these spaces that will be relevant and get results.

So here’s what you need to know: yes, half of us are young and both of us are silly, but we're going to deliver a fun presentation that will leave the audience with some insight into how Gen Y is actually using social media and share information on how credit unions can get involved and get bottom line results.

We’re really excited to have a conversation about this, and if you are too, you can vote for us here:

http://www.cuwatercoolersymposium.com/vote/

Voting closes Friday at 2pm PT.

All the best,

Nala (and Cheryl)

Co-op Vegas?

I attended the 1 Credit Union Conference in Las Vegas last week. The venue struck me as an odd choice. I wondered what kind of first impression Vegas would give the visitors from 60 countries. This tweet from Shari Storm summed up my initial thoughts, "Listening to the regal women of Zimbabwe marvel at how little clothing the young women in Las Vegas wear." Was Las Vegas the best way to show off the western world?

Then it struck me: Vegas is the perfect example of the power of cooperation. Don't believe me? Let's run Vegas past the seven cooperative principles.

Principle #1: Inclusiveness
Everyone is welcome regardless of how much cash they are carrying. From the penny slots to $5,000 minimum bets, Vegas has something for everyone. It does not discriminate. Vegas will take money from anyone!

Principle #2: Voice
Vegas is a democratically run ecosystem, entirely controlled by consumers' wants and desires.

Principle #3: Benefit
Consumers directly participate in the financial success of Vegas by emptying their pockets on gambling, dining, entertainment and taxis. Surpluses are returned to consumers in the form of an occasional jackpot to make everyone believe it's possible to beat the odds!

Principle #4: Independence
As your plane descends, you are struck with how isolated (and illuminated) Las Vegas is.

Principle #5: Education
Financial literacy in Vegas? Heck yes. There are gambling hotline posters displayed in every casino. This service is free and available to all.

Principle #6: Cooperation
Cooperation among casinos is vital. If there was only one casino or one show in Vegas, it wouldn't work. The whole is greater than the sum of the parts.

Principle #7: Community
Every visitor to Vegas shares a common bond and shares the famous motto, "What happens in Vegas, stays in Vegas!"

All joking aside, Vegas is a great example of people and organizations working together to make something much bigger than would be possible in isolation. All of the stakeholders in Vegas pool their money and market Vegas as a whole. There is real power in this co-op marketing model that credit unions could learn from.

Tim

20 years and 20 lessons learned

In January 1990, mid way through my final year of art school, I started a business. I was 20 at the time, had zero qualifications to be a businessman and had only had one real job (if you don't count paperboy at 12 and the fry guy at McDonald's at 14). That one real job was a part-time sign painter in high school and college. I am really dating myself, but my time at art school didn't even include computers (yikes).

20 years later and half my life invested in this business, I've learned a few things.

1. Do what you love
2. Work with people and companies you respect
3. Tell the truth
4. Get really good at something
5. Never stop learning
6. Abandon what's not working
7. Learn to say no
8. Don't take it too personal
9. Strive to achieve a work-life balance
10. Give your people freedom to excel and to fail
11. Have a vision and stand for something
12. Differentiate your offering
13. Don't underestimate the power of luck
14. Learn from your mistakes
15. Don't be afraid to ask for help
16. Treat people well
17. Not everyone will believe in what you are trying to do
18. Don't steal ideas
19. Never screen back red, it just turns pink
20. Laugh often

Thanks to everyone who has enabled me to do what I love and here's hoping for another fun 20 years.

Tim

Living Young & Free featured on CBS Evening News (well, kind of)

As a follow up to last week's recap post on our "T-shirt buy" with Jason Sadler of iwearyourshirt.com, here is the story that appeared on CBS Evening News with Katie Couric!

I guess I'll patiently wait by my telephone. It should start ringing off the hook... right? This experience has been way too much fun!

Tim