With rapidly evolving technology in financial services today, there is a stronger emphasis than ever in business management and operations on the assessment and implementation of advanced systems and their interconnected components.
Of course, this growing emphasis increases the responsibility of top management to have the knowledge to ensure that the technology a company adopts will perform as expected and be secure from harm. This can be a heavy load for a credit union chief executive officer to oversee, particularly at smaller institutions with commensurately smaller information technology resources. And, what is true for the CEO is certainly true for the credit union’s volunteer Board of Directors.
As credit unions increasingly turn to fintech, having a technology expert on the Board of Directors can bring considerable value and key insights to this crucial area of need for credit unions.
Credit unions should seek out and recruit Chief Information Officers from among their membership for their Board of Directors. Sure – great idea! It’s perhaps not as difficult as you might think. People with technology backgrounds, I believe, are aware that they have a unique gift, skill or training. In addition, many such people come from armed forces backgrounds, which make them open to calls to volunteerism and service.
The Credentials of a CIO
Here’s what a CIO can bring to a credit union Board of Directors:
Experience. Someone who has risen to the level of CIO has been around for a while. They know their technology – but they also know a lot about life. A CIO on the Board of Directors can be a reliable source of counsel to a credit union’s CEO and its own CIO, as well as a mentor to inevitably mostly-young I.T. staffers at many credit unions.
Different Perspective. Credit union boards can and should include members from many walks of life. The CIO’s perspective comes with his professional title – an ability to understand hard technological issues and solutions, see trends in fintech that the credit union needs to get hip to, and help the institution anticipate future needs. And, last but not least, the CIO can understand the jargon of technology, which can be a completely foreign language to many. Understand it, speak it, and translate it for their uninitiated fellow board members!
Consulting Factor. Because technology is so complex, all organizations – no matter how big – call upon consultants regularly to help address their needs. A CIO on a CU board can help vet candidate consultants (as well as technical employees) for the institution. And, since a CIO’s role is largely one of consulting, they can often effectively act in the consultant’s role themselves.
Understanding Risk. With the adoption of new technology comes new risks to member data security and potential fraud. A CIO can bring a level of understanding of this problem that other board members may not, and can help the board fulfill its oversight role as credit unions seek to keep up with member demands for the latest technology, and ahead of the talent of fraudsters to exploit new consumer conveniences.
Project Management. In addition to consultation, the CIO’s working life is also one of soup to nuts project management. Project roadmaps for the successful, speedy and on-budget implementation of technology are almost as complex as the technology itself. Here again, the CIO can help the board fulfill its oversight role in a way that it may not otherwise be able to do.
Understanding Relationships Between Business Units. The CIO of a large organization must often oversee the implementation of technology across widely different business units – some with legacy systems almost impossible to retire, some with the latest and greatest in I.T. The CIO can be a particularly valuable resource for a credit union here, given the long history of the movement, it’s often decentralized nature and the current trend towards merging smaller institutions.
In addition, of course, I.T. is a department that services other departments. The CIO often has an understanding of an entire organization, which again can be put to the service of a credit union board of directors.
Knowing the Difference Between a Sledge Hammer and the Right Hammer. Another important management benefit that an experienced CIO can bring to the board is to assist with the purchase of hardware and software systems that are squarely matched with the primary purpose of those systems. Often a company will buy a very expensive sledge hammer (technical solution) when something much smaller will do. The CIO can help a credit union make the right technology purchasing decisions and possibly save the institutions thousands of dollars – and a lot of time.
Because credit unions by tradition are all about “people helping people,” they have a unique opportunity today to capitalize on consumer interest in doing business with companies that are doing good in their communities. The key, though, is to provide the technology that the modern consumer demands as well. The seven factors listed above – and others – make a CIO a valuable pilot helping credit unions and their volunteer boards navigate and stay relevant in today’s fintech revolution.