Credit unions today find themselves facing unprecedented challenges, but also new ways to expand and reach new markets. They face changing (and tighter) regulations from US lawmakers as well as threats from major banks, they are struggling to expand their membership to younger demographics, and they must tread carefully as they find new revenue streams in an era of low interest rates, while new technologies in mobile banking are making it easier for them to reach new members.
It’s more important than ever for credit union boards to have important documents and new information at their fingertips, as well as tools that allow them to discuss reports and vote on issues in between meetings. They must also find a way to protect sensitive data, such as member information and investment reports, from cyber criminals. One of the most effective tools for improving both data distribution and security is the board portal, such as Aprio Boardroom, the leading solution among credit unions. This technology makes it easier for directors to engage and prepare for meetings to face some of the most urgent challenges facing CUs today.
#1 Changing Regulations
Since the 2008 financial crisis, the regulations around financial institutions, including credit unions that had little to do with the subprime mortgage crisis, have become increasingly burdensome. Directors must keep abreast of changing and increasingly stringent regulations before coming to a consensus on any decision, and they can be hindered by a lack of easy access to new information on legislation. One of the benefits of using a board portal like Aprio is its digital library of links to resources like legislation, which can also be incorporated into agenda events. Major banks have also been applying more pressure on lawmakers to repeal not-for-profit credit unions’ tax-exempt status, and there is a great deal of uncertainty in the current political climate. Boards need to be more responsive than ever before and a portal that allows them to review high priority documents updated instantly and even vote digitally will help them respond to volatility.
#2 Millennial Markets
One area where credit unions continue to struggle is membership among the Millennial demographic, poised to become the largest demographic in the workforce in a matter of years. By and large, the industry cannot outpace radical FinTech innovations that seem most likely to draw Millennials, credit unions need to keep up with new banking technology to compete.
#3 Adopting New Technology
Online and mobile banking mean that CUs can compete in larger markets without the burden of opening new physical locations, but adopting new technology such as image capture check deposits is a complicated process. Board members must discuss risks and evaluate vendors, especially as only a few vendors supply the same technology to a large number of financial institutions.
#4 New Lines of Business
Despite a small recent hike, US interest rates remain at historically low levels, which means that many financial institutions, including credit unions, are investigating alternative revenue sources outside of ordinary lending. Whether it’s insurance products, commercial lending, or new investment strategies, there are new risks to every new line of business that have to be assessed in the boardroom.
As credit unions face an uncertain future, technology for non-consumer-facing tasks like Aprio professional board software are more important than ever to keep directors up-to-date and engage them beyond meetings. Faster and more secure information distribution methods are a must-have for CUs today, and the industry at large has been an early adopter of board portals. If your organization hasn’t made the switch, it’s time to start doing a better job engaging directors in order to stay competitive.