Credit Union Geek

Marketing, Strategy, and The Force by Joe Winn

Tag: credit union (page 1 of 3)

Cash Out Needs Cash In

None of us want to see another lending crash. With today’s NCUA and FDIC insurance programs, money won’t be lost, but investments, collateral, and jobs are always in limbo.

How many of you know someone at a credit union which underwent a managed merger, either as the takeover entity or the one being absorbed? It accelerates a consolidation of the market, sure, but I don’t need to explain to any of you the hardships endured.

This post arises from a situation we faced during a recent partner planning meeting. The credit union had less-than ambitious goals for their auto lending growth. “Odd”, we thought. It was not until later in the meeting that we learned some background on their numbers.

Ever hear the phrase, “too much of a good thing”? This credit union was living it. They had been quite successful recently in their lending, so much so their cash reserves were depressed. The institution no longer had large sums of cash to lend and chose to devote marketing resources on growing their share account values. Turns out it isn’t an uncommon problem, as reported by CreditUnions.com

What a wild challenge! It got me thinking. How can a credit union build cash reserves which are secure for a period of time, yet provide a value to their members? While, of course, having a low cost of attainment and maintenance?

I’m no financial expert (if my schooling had finance, I don’t remember). However, before I became more involved in investing, my go-to “safe bet” was a Certificate of Deposit. One year, three years, even 5 years; it was ok, since the money was safely locked away and earning a fixed interest.

Might CDs be a cost-effective strategy for growing cash reserves? No debit card required, the cash has a guaranteed term, and the member is happy to get more than 0.00014% interest.

Granted, I grew up in a world of Ferengis hoarding gold-pressed Latinum and a Starfleet which did away with money hundreds of years in the past. Perhaps I’m Scotty talking into the computer mouse in confusion.

Disclosure: As an independent agent working with credit unions, forced mergers are usually bad for our business. If our partner is the one being absorbed, we can probably bid their alliances goodbye. However, if it’s the other way around, we may find the potential market expanded. In truth, we would much rather expand our business through organic growth and greater credit union partner success. So, credit unions, please use your best judgment on maintaining a conservative loan to shares ratio. We are but lowly partners and should never be looked to for financial management advice. Besides, I’m a geek Millenial/Gen Y. Everyone knows you can’t trust us.

Disclosure 2: Image from Star Trek: DS9. Source: http://www.adafruit.com/blog/wp-content/uploads/2013/03/quark_600.jpg

Is Your Computer Reminiscing You Into Insecurity?

The Internet is a unique place. Where else can you come in with antiques that are only a few years old? And even more, those “antiques” can put you in danger! Imagine if your car, at the end of the lease, was considered “obsolete”. So much for that ’65 muscle car! May as well get rid of it now before it explodes at a stoplight. Really, it’s only a matter of time!

Yes, the pace of digital improvement is staggering. As is the pace of obsolescence. Part of it is “planned”, where a manufacturer or developer wants you to buy their latest version, so they stop supporting the previous. Another aspect is opportunity cost. Keeping security and compatibility updates flowing for an older product requires staff time and resources. At what point does that investment become a losing proposition?

The core of our network-connected society has become the web browser. What used to be “just another program” on your computer has evolved into an operating system of its own. Suffice it to say, your trusty IE, Firefox, Safari, or Chrome (or Opera, if you’re one of the brave outliers) does an incredible amount of work behind the scenes. They are what allows us to receive notifications from websites, load full 3D games in a webpage, play back videos without additional software, and display engaging websites powered directly by the computer’s video card. If you want to see how far we’ve come, simply install an old version of Mozilla Firefox, say, 1.5 (from 2005), into your computer. Watch how slow browsing becomes, how many sites refuse to load, or do, but with horrid interfaces.

Unfortunately, with the good comes the bad. There are individuals and groups out there which want to do harm to your computer. Some for “fun”, others for profit, and still more for political motivations. As a result, your lock is always being picked. Good thing there are security teams devoted to closing these holes at every company! Security updates are the main reason why you receive regular updates on your computer…do them! Patch Tuesday, the monthly Windows Update, may include dozens of security fixes for the operating system and Internet Explorer. Each time you skip one of these, you are leaving your door unlocked for the person who knows where to look.

Which brings us to the point. I had a peek at my logs for credituniongeek.com. Between the period of November 17, 2014 and December 17th, 2014, my site was visited by potentially unsupported web browsers. 10.28% were using Internet Explorer 8, which, if you’re on XP, is no longer receiving security updates. An additional 4.67% were browsing on IE 7, an incarnation of the program which struggles to load much of the modern internet, and, as well, has unpatched security vulnerabilities. Read Microsoft’s official support policy.

I understand if your credit union has custom software running on old platforms. It’s expensive to change, and if it still serves your staff and members, why upgrade? That’s fine. But these systems cannot be connected to the public internet. Especially at a financial institution, this is asking for security breaches. Even with good procedures, it happens, all, the, time.

For the safety of your credit union, members, and staff, please update your public-facing systems.

Waiting, Done Different

There’s a value to waiting. Going in unprepared is a recipe for disaster, no matter the field. As explained in a previous post, planning ahead of time can reap great rewards, even if your task is not to guide a spacecraft into orbit around another planet.

Of course, you can wait too long. When your competition passes you by, internal goals are foregone for “perfecting”, and the stagnation of perpetual planning sets in for the long haul.

Like everything else we discuss, where is your happy medium? Great question.

Let’s take a look at one of my favorite examples: Apple.

As before, it doesn’t matter your opinion on their services, devices, or practices. We can all agree they are masters at generating buzz, interest, and profits.

And boy do they wait…and wait.

Nearly half a decade ago, phones running Android began appearing with growing screens. I don’t mean they grew as you used them (though that would be awesome…screen size based on usage patterns…patent it!), rather, they were larger than the standard 3.5” of the iPhone. Manufacturers tried it as an experiment, and customers responded. In a continual back-and-forth, screen size increased, customers adopted it, then the sizes were raised once again. Fast-forward to today, and the largest phones are, for argument’s sake, small tablets. Until the release of the iPhone 6 and 6 Plus, the iPhone gained only a small vertical increase to 4”. Why?

Well, one reason is that Apple does a revamp of the phone body every 2 years, but also they wanted to be certain the transition was real, and not just a short-term trend. Now they have two options, one in the new “mid-size” range at 4.7” and another in the “gargantuan” slate of 5.5”. Android manufacturers should be worried.

“Yeah, but that was a given, and they were just stubborn before!” You might be right, but they followed public adoption preferences quite closely, and only transitioned when a majority of users would be satisfied.

Let’s look at something less apparent. Consider it your internal planning analogue.

Ever try to read your phone’s screen in the sun while wearing polarized glasses? It’s a pain. The screen dims, loses color, goes all weird…do you make the, “look over your glasses nose scrunch”? I do.

Apple engineers noticed this as well, and set to improve it. They put the time into redesigning a panel in the screen (called a polarizer) to minimize that issue. This improvement alone tells me the device was not rushed through development.

We are in the midst of your annual planning sessions. What are you aiming to achieve for the next year? Do you have checks on progress every few weeks? Even better, do you have small victories you can check off on a regular basis? Are your goals achievable, and do all aspects of your CU have buy-in?

What’s your “polarized glasses make the screen crappy” weakness that you are correcting this year?

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