Compliance emerges as a key stakeholder to credit union innovation

For too long, governance, risk and compliance (GRC) functions have suffered from the unfortunate reputation as something of a speed bump to progress. It’s not difficult to understand why. Innovation is almost always accompanied by heightened exposure to risk, which means the GRC team is front and center when credit unions are evaluating new ideas. Often, they are the ones asking the toughest questions.

But that dynamic is shifting. Increasingly, credit unions are involving GRC teams earlier in the innovation process, recognizing that compliance is best not as a final checkpoint, but rather as a stakeholder in innovation itself.

This shift in involvement gives compliance an opportunity to ideate solutions earlier in the stream. And perhaps most importantly, it provides much-needed context to the broader team in charge of improvements. With a deeper understanding of how to maneuver regulatory twists and turns, GRC-enabled teams are better at finding workable and efficient paths forward.

GreenState Credit Union in Iowa is among the credit unions redefining how GRC contributes to the organization’s progress.  

“We’re intentionally shifting from compliance as exception tracking and control monitoring to compliance as experience-informed, risk-aware design,” said Amy Stevens, GreenState’s SVP of member experience.

For example, complaint management is now a distinctive channel within the 400,000-member credit union’s voice-of-the-member strategy. By blending the complaint management function with net promoter score (NPS) and overall member satisfaction (OSAT) trends, the credit union has been able to move from reacting to member issues to anticipating them, improving both service and recovery efforts.

Member onboarding is another experience for which the $11 billion cooperative is leaning on its GRC expertise. By incorporating innovative processes like risk-tiered and relationship-based decisioning, step-up authentication and post-open monitoring, trusted members are able to move through things like account opening and online applications much faster.

As GRC is welcomed into more corners of the cooperative, credit unions have several options for structuring that involvement. Among the more progressive institutions our team works with, the dotted-line, or hub-and-spoke, model has proven particularly effective. In these environments, GRC serves as a growth catalyst, with delegates embedded across different departments, like marketing, retail, lending, and HR.

Importantly, this distributed approach does not diminish compliance's traditional role. In the credit unions that have adopted a dotted-line model, GRC still bookends strategic initiatives, allowing GRC pros to voice considerations from an objective vantage. The difference is that those insights are informed by a much deeper understanding of the credit union’s overall strategic objectives and goals. Not to mention, they are delivered in partnership with the teams responsible for executing them, which is critical for a culture of collaboration.

Technology is making a more integrated approach easier to deploy. Workflow tools that automate documentation, assign responsibilities and provide updates across teams ensure that key activities within progress and innovation projects don't fall through the cracks. Rather than creating more administrative burden, these platforms provide the transparency needed for GRC and other departments to operate in lockstep.

Perhaps nowhere is that value more evident than in change management. Even in a deregulatory environment, volatility is still at play. Credit unions are finding a lot of value in tech that provides a central hub for monitoring regulatory changes, documenting decisions and coordinating action steps across stakeholders.

A growing number of credit unions are discovering two important realities as they embed GRC expertise more broadly.

First, the policies and risk assessments that appear sound on paper aren’t always reflective of the practical rhythms of serving people well, nor of launching products or competing in a fast-changing marketplace. Embedding GRC expertise closer to those activities grounds risk management in the “real world” of running a successful credit union.  

Second, working closely with different business units gives GRC professionals a lot of the credibility they need to recommend changes to “the way we’ve always done things.” The ability to continuously refine processes helps credit unions operate more efficiently.

Legislators, regulators, competitors and consumers are all forcing credit unions to evolve in real time, making faster pace-of-play a competitive advantage. Far from slowing progress, compliance is increasingly serving as a catalyst that enables credit unions to respond to a changing world with speed and surety.