How Prepared Is Your Credit Union to Serve the i-Member?

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How prepared are you for the "i-Member?"

The unveiling by Apple Computer of its much-anticipated iPad has led to considerable speculation about the niche it will fill and in particular its effect on the newspaper, magazine and book publishing industries.

But if you've dismissed the device because you identify with the PC in those PC vs. Mac commercials and further find Mac loyalists to be just plain annoying in their proselytizing, you're making a mistake.

What Apple unveiled at the Consumer Electronics Show in Las Vegas wasn't a nifty device, it was your future when it comes to member interaction. The iPad won't even begin shipping for another two months, so it's too early to tell how readily it will be adopted. But that's essentially irrelevant. In the inverse of the old axiom, when it comes to consumer technology the tree doesn't roll far from the Apple.

The Apple PC user interface. The iPod. The iPhone. All created either a precedent or created a category that previously didn't even exist; now everyone else is scrambling to catch up. A decade ago who imagined a matchbook sized device storing their entire music (and video) library? Now who doesn't have an iPod? Five years from now everybody's kid will have an iPad or a similar device, with some predicting they will be as flexible as an actual paper notebook.

In the 1950s the staple of every World's Fair or "House of the Future" was the video-telephone. Futurists envisioned home-based, portable television-sized devices in which you could actually see the person on the other end of the phone. Before Steve Jobs officially introduced the iPad, there was speculation that the company would instead unveil an updated iPhone that would leverage 4-G technology to make live video interaction a reality. No one ever envisioned that such technology would be found in the "palm of the future."

Similarly, you may never have envisioned that many of your "members of the (near) future" will interact with their credit union-when they need to speak with a human being - purely via a video link. It's not going to be sufficient to "meet" with a teller or loan officer with the same security camera-like, black-and-white screen used by many remote tellers systems, both in-branch and at the drive-through. As credit unions moved members to phone centers, reps had to be taught a different set of skills. Now they are going to need to bolster those skills again, learning to look at the camera when speaking to maintain eye contact (while trying not to grimace at the way some members are going to appear on the other end of that link). No member cares what a phone service rep is wearing; but it will matter - at least from the waist up - for "video center" reps.

The tablet Mac may never achieve the same widespread fame as those other tablets that came down from the mountain, but the i-Pad and the technologies that will follow are going to be the so-called "game changer," and for credit unions, a positive change if embraced.

Many banks will no doubt pour R&D dollars into creating virtual customer service reps - avatars - to further cut their head count. (Think it's aggravating now to repeat and repeat again your account number into one of those airline voice recognition systems? Imagine a smiling avatar perpetually smiling and fake-apologizing and telling you he/she/it didn't understand.) Credit unions that remember it's a people-helping-people business, regardless of how those people interact, will be the ones that benefit the most in the i-Future.

• If you haven't been paying attention to events in the Virginia state legislature, you should be, as it could be a model for legislation coming soon to a statehouse near you.

A bill has been proposed in both the Virginia House and Senate that would allow banks and credit unions to more easily merge. If you think the bill and its backers have the interests of credit unions at heart, then this is apparently your first day on the job at the CU. Virginia league CEO Rick Pillow last week called the legislation a "one-way street," a reference to the language in which the trade-off for allowing a bank to more readily consume a CU is to also make it easier for a bank to convert its charter to that of a credit union.

You'd be well-advised not to hold your breath when it comes to the latter; the only person lonlier than the Maytag repairman is the person manning the Bank-To-CU Conversion Hotline. The current tally for the number of commercial banks that have become credit unions currently stands at zilch - which seems kind of odd given the decades of rhetoric by bankers over all the "advantages" credit unions have.

Even if the bills die, don't dismiss what they represent. With CUs pushing nearly a trillion-dollars in assets, and with banks in need of capital despite having lower capital requirements than CUs, all that business is a mighty attractive target for executives trained to think first about their own interests and those of shareholders.

More than a decade ago Australia made it easier for banks to call on CU members to "demutualize" the institution in exchange for a premium on their shares. The result has been that many a CU charter has ended up down under. Will the same happen in Virginia? It's not likely to anytime soon. Then again, who imagined something like the iPad even 10 years ago?

Frank J. Diekmann is publisher of Credit Union Journal and can be reached at


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