The View From Your Peers:

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Have you ever wondered who among your peers offers the best and the most in e-services? Have you ever wondered what the penetration level was of the top credit unions for e-services?

We've been seeking answers to those questions, and believe we have identified what might be described as the "Top 100 Credit Unions in E- services." We've broken out those credit unions by seven different asset ranges, conducted more than 60 insightful interviews, examined NCUA's compilation of 18 e-services, and even looked at the penetration of e-services, including which credit unions have the highest penetration of members using their services.

In the process of conducting our research we've also gleaned some intriguing insights into the thought processes of credit unions and the tactics and strategies they've pursued. Among them:

1) In many cases CEOs were initially skeptical about e-services projects. But once they began to see the results these once unconvinced CEOs were singing the praises of offering e-services to their members.

2) We found in the top credit unions there is a profound commitment to offer additional services to their members; the cost of doing so was seen as a challenge to overcome, not an excuse for inaction. In other words, they were going to find a way to fund it.

3) The ability to be competitive and to offer a wide variety of services to their members was a very important component of the strategic plans of the Top 100 Credit Unions one of the Top 100 said, "You know we were just doing our job, and wow, ended up on the Top 100 list." It is no mistake they are listed here. They chose to be among of the best providers of e-services, and made strategic choices executed to perfection.

A Surprising Finding

We also happened upon another important and surprising finding in the study, and that was that there are SOME credit unions in the U.S. that are not providing any e-services; none, zero, nada. In our opinion, these credit unions are doomed.

If these credit unions do not provide e-services soon, they will be gone. Why? We believe there are a number of reasons, including:

Many credit unions report that they are getting more online transactions than they are getting in walk-in traffic at their best branch. The law of efficiency will kill the non-e-service credit unions. If you don't offer it to your members you will lose efficiency. The employee-to-member ratios will be on the high end of the scale compared to their peers.

CEOs asked for this report's data in a number of innovative ways. No. 1, they were interested in the top credit unions, but some CEOs were interested in the complete list spanning all levels of e-service adoption, so they could see the potential merger partners of tomorrow. Some CEOs wanted to see who wasn't offering the services so they could build merger relationships. These credit union leaders have a different vision of the future, and they know credit unions that don't offer e-services aren't likely to grow and prosper. The viewpoints of those CEOs changed the way we look at the future of credit unions. It changed the way we see the data. There will be more mergers, and it won't be driven by a lack of financial strength, but from a lack of service strength. Many of the mergers of tomorrow will be driven by a lack of services, electronic and otherwise, and not from financial risk.

Members Demand The Service

Almost all the credit unions reported that their members demand online services. Those who are providing online service are credit unions that are growing. A CU is either green and growing or ripe and rotting.

Contrary to expectations, it was often not that expensive to offer the e-services. Some credit unions did conversions to new core data processing systems and found that it was less expensive to offer the e- services than to not offer the e-services.

Among the credit unions at the top of the list, all said they had a great board of directors. This was a key finding in our research that was not expected. It became clear that in the Top 100 credit unions the boards were proponents of growth and of offering a wide variety of services to their members. These credit unions are not the average performers; they were the tops of their e-game. And they were lead by the board of directors, or by a CEO that had a vision that they offered to the board. It became clear the CEOs in the Top 100 credit unions had the skills to sell the vision even if the board didn't buy it at first.

The purpose of our research was not to similarly identify what might be described as the "Bottom 100" credit unions. But it would be fascinating, in our view, to talk to some of these "leaders." We have not formally talked to the CEOs of the "Bottom 100," but would love to. We want to learn how much the CEO knows about technology, or how much they will allow themselves to not know, and how often they are willing to ask for help. It would be informative to assess the relationship they have with their boards. Perhaps they get along, but for all the wrong reasons. It would be great to see if the CEOs of the bottom 100 credit unions are leaders or have they perhaps informally retired and are waiting for their party (maybe in three to four years?) The damage that could be done to their credit union in the meantime could be significant.

All the CEOs said that an e-services initiative was not as difficult to implement as they thought it might be. There was a learning curve, and they believe they will always remain on that learning curve. But it is not as difficult as they initially thought. It can be done, and the credit union can accomplish the goals they set for themselves. Pat Rutledge of Hines Credit Union in Mississippi put it this way: "It's not that easy, but it's not hard either."

Rory Rowland and Tim Lerew are both technology consultants and frequent speakers to credit unions. They have recently co-authored the book, "The Top 100 Credit Unions," which seeks to identify the Top 100 credit unions in offering e-services. For more information: Contact Rory Rowland at (816) 478-3249.

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