CEOs Tackle Technology

Cathy Fleming, Fleming Creative - thePoint
February 17, 2005

Staying current in the changing world of technology is tough. But credit union executives don't have to go it alone when choosing and implementing new technology.

"If you're thinking about using a new technology, there's probably another credit union that's either thinking about it or has done it," says Dave Hanighen, vice president of information technology (IT) planning and architecture at Orange County Teachers Federal Credit Union, Santa Ana, California. "There's a tremendous opportunity to leverage the experience of other credit unions."

Along with Hanighen, Tom Anonson, chief technology officer at Classroom Teachers Federal Credit Union in Louisville, Kentucky, and Suellyn Disinger, vice president of information systems (IS) at $75-million-asset Ball State Federal Credit Union in Muncie, Indiana, share their ideas for dealing with technology-related challenges at their credit unions.

Q: What are your credit union's top technology issues?
Hanighen: One of our biggest challenges is being at the forefront. In addition to being aware of existing technologies, we need to evaluate emerging technologies. We might not implement them today, but we want to have them on our radar screen as we move forward.

A second challenge is staffing. We're asking people to do more than they've ever done. With technology moving at a rapid pace, it's harder to keep up. Obviously, we can't hire all the resources we need, so we've put some people in positions where they're using skill sets they never thought they'd use.

A third challenge is keeping IT aligned with the business units. It’s important to make sure we're lined up with all the business units' priorities and that we're serving their needs.

Q: How do you make sure staff can meet your most pressing technology challenges?
Hanighen: We did a skills inventory of our staff about a year ago. Some people had skill sets we weren't even aware that we had in-house. We now continually update our skills inventory so we know which skills people have.

Often we ask staff to step out of their normal realm of operation and assist in other areas. We're leveraging those resources and talents as much as possible. When a position opens up, we see if we can absorb that position with existing resources. If it's a skill set we don't have in-house, we'll hire for it.

We've asked our business units to help out in the IT area. One branch employee has a degree in IS and was interested in joining the IS team, so we transferred him internally. He's turned out to be an exceptionally good employee for us.

Morale is an issue, like in all IS departments. We've created a spirit committee. We meet once a month and plan activities such as softball games, potlucks, and a spirit rally.

Anonson: I'm a one-man IT department. I rely a lot on third-party providers for many security and technology issues. That can be a good thing because technology is changing so rapidly and it's easier for providers to keep up with it. Other times it's easier for me to make sure we're keeping up with technology. I can go directly to our CEO or board and have an answer in a matter of days and, ultimately, a solution.

Disinger: We recently contracted for a thorough audit of our network. The auditors summarized their findings and suggested ways to do things better. It was very enlightening. Now we’re making some changes on our network to make us even better.

Q: How does technology help build your business?
Hanighen: It puts us in a much better position to compete in the marketplace against banks and other financial institutions. It also gives us the opportunity to offer innovative products and services that we wouldn't have been able to offer in the past. It positions our credit union to be a leader among other credit unions.

Anonson: Everything at our credit union used to be done on a personal basis. And we still have that. But with a younger membership coming in, there's more interest in doing business electronically. Even our older members are doing more of their business with us from home. A lot of our business is done by e-mail, and we've seen our home banking numbers increase.

We still try to personalize service as best we can for each member. It’s important for members to feel like this is their credit union and that they're a big part of it. Technology can help us attract younger members. The age of our membership base is getting older, and it's critical that we bring younger members into our movement and let them know what a credit union is. Having the technology in place gives us the opportunity to attract them. One of our branches is at a university in town. Most of those members rely on our home banking product, e-mail, and other electronic services.

Disinger: Our entire security camera system is computer-based. We're trying to move into a paperless environment. These technologies are tools that help us provide better service to our members. For example, if a member comes in and doesn't remember making a particular transaction, our tellers can pull up a receipt, see the signature, and print it for that member.

Q: Does technological advancement pose any drawbacks in terms of cost?
Anonson: Cost is always an issue. And that's probably one reason we're not on the bleeding edge of technology. We've put off some technologies that were too expensive for a credit union of our size. In most cases, prices came down enough to afford them in less than a year. When we first started looking at e-statements and bill pay, they weren't feasible for a credit union of our size. Now more members are interested, and it's more feasible to implement the technology because costs have come down.

Hanighen: We do a careful cost/benefit analysis of any new technology. We don't always look for a complete payback, but we do look for either a rapid payback and/or a tremendous ability to offer members a higher service level.

Disinger: Once you take on the responsibility of an in-house system, you know there are many costs involved. You have to be willing to keep upgrading. We keep our computers for three years. I'm constantly replacing them. And software is expensive.

Q: What recommendations do you have for other credit union executives looking to improve their technology?
Anonson: When you're a small credit union and don't have an IT person and a lot of technological savvy, it's good to talk to other credit union folks. We talk to them about what they're doing, ideas they have, and pitfalls and problems they've had with technology they've implemented. When we decided to offer e-statements, the first thing we did was call several of our credit union friends and ask them about vendors they used and pitfalls they encountered. We worked those comments into our strategy for putting the technology in place.

Hanighen: Do your homework carefully and evaluate your technology. Look at it not only from a cost perspective but also at what it can do to empower you to offer better services or better products. Technology can be fun just for technology's sake. But it also has to provide a return on investment. Don't make any assumptions. Vendors will tell you everything you want to hear. Never assume what the vendor is telling you is absolutely correct. You have to do a lot of due diligence. Also don’t cut yourself short. Do the research and then give yourself the time to implement the product properly and appropriately. Oftentimes we try to push things through too rapidly in the IT world because they're badly needed. But if you give yourself the time and make the analysis, you end up having a smoother transition and implementation process.

Cathy Fleming is the owner of Fleming Creative in McFarland, WI. Contact her at 608-838-7877 or cfleming@flemingcreative.com. This story was originally published in the Shoptalk column of the June 2004 CU Magazine. It is reprinted with permission from The Point for Credit Union Research and Advice website at http://advice.cuna.org/.