DEARBORN, Mich.-Credit unions will be around in 2109, providing the same personal financial service that members have become accustomed to over the last 100 years, according to Mark Shobe.
But to be able to deliver that same personal touch years from now, credit unions today need to begin expanding the number of vendors they do business with and improve operational efficiencies to equal the banks, said the CEO of the $2.5-billion DFCU Financial here.
"As an industry we need to be a little less insular in our nature in order to prosper and survive," Shobe said. "We need to avail ourselves of the best third-party vendors instead of just going with those that are credit-union owned. If you look at the international economy, those that try to cut off trade with other countries don't do well."
A good example of credit unions' insular approach to business is the use of corporates for many services. "Those services can be provided by others, we just chose not to use anyone else. We need to think about things more broadly in the future," Shobe said.
To become more efficient, credit unions need to embrace benchmarking and best practices to run at the efficiency levels of commercial banks. "We will have to create a real value difference beyond our service-that is critically important," Shobe said. "In 2109, we will have to provide superior financial value day in and day out, and the best way to do that is to run on a very focused and efficient basis."
An advantage credit unions have had over the years is that they operate like "friendly stores" rather than cold, commercial banks, Shobe said. "And that will not change. But with a much greater reliance on electronic delivery channels in the years ahead, there will certainly be less demand for branches. The branch will never go away, as Charles Schwab said, consumers like a peace-of-mind location. Schwab has a branch in each of its major markets so people have a place to go to visit their money."
