NORTH CHARLESTON, S.C.-Collaboration continues to be a key differentiator and business strategy for credit unions, but one person believes too many CUs are afraid to ask for payment when collaborating.
"Just because you believe in the collaboration environment doesn't mean that you shouldn't at least be able to recoup the cost of the collaboration," said Bonnie Ciuffo, chief information officer at South Carolina FCU and president of its CUSO, South Carolina Financial Solutions. "People realize that the model has changed."
Cuiffo, who was recently named by NAFCU as its "Professional of the Year," recalled that when she joined SC Federal 18 years ago, part of the appeal was credit unions' focus on collaboration and philanthropy. That appeal remains, but today when the 154,000-member, $1.3-billion credit union regularly assists smaller CUs in matters related to technology, HR and other fields, it isn't shy about charging for those services in instances when the smaller CU can afford it.
"In many cases in the past, credit unions have relied on more affluent CUs to help them with these things, but it does take a significant amount of time in some cases, and I don't think it's out of the collaborative spirit to ask for payment for those services," she said. "I know that's the model we believe in here, and we continue to support those (smaller) CUs. For that small credit union, we may do it pro bono."
For other CUs with a stronger financial position, SC Federal (and its CUSOs) price their services on a case-by-case basis according to that credit union's needs.
Cuiffo noted that in better economic climates, credit unions could sometimes afford to dedicate their resources to another institution for 40 or 80 hours without putting undue stress on other employees. "These days I don't have that option-there's no fluff any longer, and so I hope people realize that we're not trying to gouge them."
Rethinking Decisions
Beyond leading the way with collaborative efforts, Ciuffo has also been instrumental in bringing Management Information Services in-house at SC Federal. That effort has uncovered some surprises.
"I think people were guessing," she recalled. "They assumed because our financials looked like this that this was what our membership looked like. I started to discover, especially once I became CIO, that the perception of our member base was way off."
Ciuffo explained that decisions were being made based on who came into the CU each day, which tended to be the less affluent, transactional-based member. Based on later analysis, it turned out that SC Federal had more professional, higher-income members than they thought. "It was different than the perception, because the perception was based on who (CU staff) saw everyday." That analysis also revealed that some of the decisions the CU was making were based only on members who had things like high-dollar-value certificates and no other relationships.
The credit union hired a professional with more than two decades of experience in the banking sector to help it better understand the membership and use that knowledge to drive business decisions.
"It's now a function of everyday life here," said Ciuffo, offering as an example SC Federal's current analysis of whether to expand its business hours. It is doing a "full-blown level of analysis to determine one, if should we consider it and, two, if we have a test market, what would be the test market?"
Helping With Cost Control
In-house management information (which is part of the business performance management department, which Ciuffo helped introduce) has also helped with cost control. Ciuffo noted that the SC Federal created a new account matrix, tightening up policies to limit who can and cannot join.
In the past, anyone could open a savings account and (as long as the prospective member didn't have negative check data) nearly anyone could open a checking account. SC Federal's new account matrix changed the way they allowed members to join, and in some cases if there's nothing the CU can really do for that member, then it doesn't make sense to open a share account for them, said Ciuffo, because too many members were coming in that didn't qualify for anything beyond the most basic product offerings and weren't bringing enough to the table.
"We're not letting as many members join as we used to, but our average deposit balance has gone up, our average loan balance has gone up and charged-off shares decreased by over $200,000 for new accounts," she said. "We performed an analysis, understood the business decisions necessary and implemented those. We continue to monitor those decisions."
Ciuffo called the creation of that BPM department one of the highlights of her career at SC Federal. "I feel very confident that when we come up with our business plan and our strategies for the coming one to three years, that the decisions we make are a lot more effective because of having that area and being able to measure where we're going."
MORE@CUJOURNAL.COM
More info: www.scfederal.org
See also: "Guarantee Brings Real Result," Jan. 16, 2012
"CUSO To Help CUs Structure Employee Benefits," April 18, 2012
"For South Carolina FCU, Every Day Is Bank Transfer Day," Nov. 23, 2011
