By Randy Karnes, CEO, CU*Answers

Every year I hear credit unions CEOs talk about how they need the newest products and services to remain competitive. The one thing I don’t hear is a dedication to changing the culture at the credit union to be effective. Adding new services is easy, but changing how we work and serve our members requires buy-in at the organization from the top on down. One particular area where credit unions have been slow to change their mentality is behaving more like the online retailers customers expect in their daily interactions. 

The days of the ‘if I build it, they will come’ mentality, where credit unions could simply build a new branch and watch the people walk in, are dwindling. Taking that approach for online strategies is sure to result in failure—the virtual world faces overcrowding. If you’re not a retailer and you don’t know how to get members to visit your virtual branch, you’re in trouble.

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Most credit union executives and boards still need to figure out what being an online retailer means for their credit union. Continuing down the path most are taking, they’re missing out on the opportunity to begin that culture shift now. It will take years of work; budgeting, planning, setting deadlines, and being accountable to it.

When I think of the way credit unions are approaching this now, it reminds me of the way many people approach their New Year’s resolutions. They wake up thinking, “I will be me and make this change in what I do,” but in doing so they’ve already lost—they haven’t reconciled their changing identity. They should be waking up thinking, “I will be someone else for the rest of my life.”

It’s the same for credit unions. They need to wake up to the idea that they are retailers of financial services, not a credit union that simply offers a service here or there. They must be willing to abandon, retire, and replace old investments and old identities to begin the shift to new ones. Credit unions must bravely cross that tipping point from 80% old methods to 80% new. That requires hard decisions—likely unpopular ones—that many are not willing to make.

Making those decisions and transitions is easier said than done. I’ve been trying to alert credit unions to how important this would be for the last few years. In 2012, I asked credit unions “Do you have an online strategy? …or are you simply buying toys to amuse yourself?” Did they have a centralized online strategy? A comprehensive approach? Someone in charge? I warned them that it could mean a bumpy ride over the next few years if they didn’t have answers to those questions. It's years later and they may be staring the storm in the eye; I hope they’re prepared.