How can credit unions beat banks? By not even trying to compete with them.
Three CEOs and a tech VP shared that advice and more during a breakout session Thursday morning at the Corelation User Conference at the San Diego Westin.
“If credit unions look at themselves as niche players and stick to that, we can beat the big banks seven days a week,” said panelist Andy Jaeger, president/CEO of the $347 million Credit Union of New Jersey. “When we look at the broad landscape and try to do all these things everyone else is doing, we lose our focus. Where we’ve had success is when we stay true to our mission and focus, and and not stray to far outside that where we don’t do our best. The lesson is don’t try to emulate the competition.”
Jaeger was joined on the panel by First Service Credit Union President/CEO David Bleazard, USC Credit Union CEO Gary Perez and Wescom Resources Group Vice President of IT Operations Linnie Gooch.
Bleazard agreed with Jaeger, saying he gets excited when he is presented with new technology that his credit union could offer to members. However, discipline is key when making decisions regarding whether or not to pursue it.
“Deciding what you’re not going to do is as important than what you are going to do,” he said. “It requires a lot of intestinal fortitude. If we try to be all things to all people, we’re not going to succeed.”
Collaboration was another way the panel discussed as a means of competing with banks. When big banks like Bank of America have hundreds of millions of dollars budgeted annually to research and development, it’s the only way credit unions can keep up.
However, collaboration isn’t easy, even for credit unions.
“The ability to cooperate helps but as credit unions grow, as their field of memberships grow and it forces them to compete against each other, it gets harder to cooperate,” Bleazard said. “If we can pool our resources, it creates a tremendous opportunity to innovate, but there are challenges. Especially in the C-suite with lots of 10-gallon personalities wearing a 5-gallon hat.”
“We found cooperating is hard because you lose control,” he said. “We had lots of committed idealists but nobody wanted to take the plunge.”