Has the Credit Union Movement Reached a Strategic Inflection Point?

There is no question that the past year for credit unions has seen a number of changes, challenges and opportunities. Between events like last fall’s Bank Transfer Season leading to membership swells and member business lending (MBL) legislation advancing through Congress, credit unions are growing, both in terms of numbers and assets and in terms of public awareness and market share.

Credit union leaders currently are tasked with taking the recent upheaval and attempting to extrapolate the future of credit unions. What do the current changes mean for the future of the movement?

An industry can be said to have reached a strategic inflection point when it has the choice to completely reassess its approach and its business model, to adapt alongside changing times, or to fall by the wayside and find itself headed toward irrelevance. John Lass, vice president of strategy and business development for CUNA Mutual Group, will discuss the many possible answers to this question during a presentation at the Northwest Credit Union Association (NWCUA) Leadership Symposium in Portland, Ore., on June 21 entitled, “Building the Credit Union of the Future.”

“Other people use different terms,” Lass said. “Some people use the term strategic crossroads. Recently there was a book called ‘Tipping Point,’ by Malcolm Gladwell. Other people talk about critical juncture. But in each case, the meaning is very similar. When you hit a strategic crossroad or a tipping point or a strategic inflection point, effectively what happens is that the nature of competition within a particular industry changes, and the old ways of doing business tend to fall away and give way to the new ways of doing business. For individual businesses and, in some cases, the industry as a whole, when you hit a strategic inflection point or crossroad, the decisions that you make at that point determine whether you’re going to go on and rise to new levels or success or whether the business gradually fades away and goes into decline.”

Lass explained that the intent of his presentation was to examine the issues as fully as possible and to look at the future of credit unions from all angles.

“We look at recent successes within the credit union system as we recover from the financial crisis, and we see the significant growth in membership and assets that the system achieved last year, improvement in ROA, and the general sense that we’ve weathered the storm,” Lass said. “But then we balance that against a fairly significant list of challenges facing the credit union system, which includes increasing regulatory burden, spread compression, regulatory caps on fee income, rising operating expenses to support multiple distribution channels, and others.”

Lass said that the presentation asks three questions, using case studies of industries like the music and photography industries that have gone through strategic inflection points to provide context and examples.

“What is a strategic inflection point, is the credit union system at a strategic inflection point, and what do we do to manage through it?” Lass said, describing the crux of the presentation. “And we draw upon other industries to look at comparisons, we draw upon some leading thinkers in the business world, and really the purpose of the presentation is to spark a robust discussion around those questions. Because different people could answer those questions differently, and we think it’s really up to the management and boards of each individual credit union to think about these questions and see how they would respond to them. So, the presentation’s geared to kind of be a spark or a catalyst for discussion.”

Interested in Learning More?

The June Leadership Symposium will be held on June 21 from 10 a.m. to 3:30 p.m. at the Portland Airport Sheraton Hotel. The Leadership Symposium is a free event open to all Oregon and Washington credit union CEOs, and CEOs may also invite an additional staff or board member to attend at their discretion, though according to Nancy Pullen, the NWCUA’s senior director of training and development, “exceptions to this general rule will be delightfully granted if additional staff members will benefit from, round out and add to the discussion anticipated at the symposium.”

To register for the symposium or to learn more about the full agenda, visit the NWCUA’s website.


Questions? Contact Training Programs Coordinator Yuri Jung: 206.340.4817, yjung@nwcua.org.

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