Why One Small CU Went To Lengths To Achieve ISO 9000 Certification
After 15-months of rigorous review, Great Lakes Credit Union became the first financial institution in the nation to receive ISO 9001:2000 certification, a prestigious title typically awarded to top performers in the manufacturing industry.
Though more grueling and requiring more effort than any yearly audit the credit union has ever undergone, this process was well worth the effort, said GLCU CEO David Seeger.
"In the financial services industry, so much is focused on the annual audit as of a certain date in time," Seeger said. "The ISO serves as a basis for continuous improvement that routinely monitors performance against a given standard and does not focus on the results of just one day."
ISO (International Organization for Standardization) is a network of the national standards institutes of 146 countries working in partnership with international organizations, governments, industry, businesses and consumer representatives and focused on quality management. For consumers, it's widely known logo represents assurance about the design, performance, safety, quality and reliability of the products and services they buy and use.
Seeger said in a community populated with manufacturing plants that equate the ISO 9001-2000 certification with quality, it made sense for his credit union to prove it was up to par.
"In the book of good to great, we're a good company," Seeger said of GLCU, which has $25-million in assets and 6,000 members. "We would like to be a great one."
While his credit union is considered small to mid-sized in terms of assets, he said, "We think big." GLCU has four branch locations, two in supermarkets that are open seven days a week.
"We also have virtual branching, different from home banking, as it allows you to conduct transactions on your Palm Pilot in an airport. We are very technologically advanced and trying to look into the future."
When Seeger started at GLCU 14 years ago, he said the main competitors were commercial banks. These days, it's other credit unions.
Through this process, he said, he expected to tighten up the operation, hold everyone accountable and give the credit union some foresight about what it could be doing to improve service to members.
Going into it, he said, he knew the odds were not good. "I've been told that two-thirds of the companies that try don't actually make it. And even we had a couple of discouraging days."
Seeger said he expects the certification will have a substantial impact on his organization in terms of monitoring the business, improving efficiency, reducing errors and procurement of an internal auditing management system which helps ensure desired customer service levels.
"In the beginning, a lot of people were asking, 'How is this really going to help us?'" Seeger said, admitting there was a lot of grumbling about all thework involved. "But, now we walk the talk. We have the methodology in place and we can honestly say we have a quality program in place."
Besides the $12,000 cost to undergo the voluntary review that involved close, in-house scrutiny from ISO representatives, there were massive amounts of paperwork required. And, because the ISO did not have standards in place for financial institutions, GLCU had to work from the ground up.
"We had to set up a program where we would document everything," he said. That included job descriptions for every single employee and how the performance of each was measured. It also required the creation of accountability methods for work performance, member satisfaction and a solid system to measure rate of return on all marketing efforts.
"For example, when you send out a marketing piece, they want to know how you know it was effective," Seeger explained. "Who actually took advantage of it? What was the rate of return on your investment?"
He said the credit union added software programs to help track the target audience and its response to particular promotions.
To assess member satisfaction, he said, it sent out periodic questionnaires asking specific questions about the level of service they received, the friendliness and promptness of the staff and whether they learned about different products and services.
The responses were then measured against the CU's quality expectations and recorded for ISO review. For example, he said, GLCU set a policy that all member concerns or complaints would be handled within 48 hours. For ISO purposes, that meant that each incident had to be accurately recorded from beginning to end, he said.
Seeger said to aid in tracking, the credit union's staff divided duties into three categories or "individual companies"-retail, lending and accounting. Each had a manager overseeing the processes while Seeger maintained the responsibility of overseeing the entire operation. "I had an ongoing checklist to make sure all the objectives were met," he said. "We wanted to record how quickly loans were turned around and how often they met the target date for signatures. Did we actually do it 95% of the time or 98% of the time?"
Seeger said he feels that his CU's accomplishment is just the beginning and may very well be the catalyst for other financials to incorporate a continuous quality improvement program as part of their standard operations policy.
For GLCU, the process is not over. Seeger said the staff will continue to monitor and document its processes for annual ISO certification.
"With this certification, we can now say that we are different from the rest," he said. "It gives us some notoriety." He said marketing materials in the 2005 would include the CU's new title.