MADISON, Wis. (4/30/09)--Credit unions may be pressed to consider a shift in their operations at a time of turbulence in the financial services industry. The most recent Filene Research Institute report suggests an entirely new model of operation may ultimately emerge. One component of such a shift could be greater collaboration. In “A Road Map for Credit Union Back-Office Collaboration,” Filene examines the potential for a shared back-office utility that would be owned, operated, and governed by several credit unions.
Author Michael Taylor, SchellingPoint LLC, developed a road map for large-scale back-office credit union collaboration. Taylor interviewed more than 150 senior executives in small, medium and large credit unions, and consultants, vendors, and credit union trade association executives. His road map has three steps:
* Make the business case: Areas such as compliance, card services, and bulk purchases are prime candidates for collaboration; * Design the collaboration: Consider the various collaborative business model elements, including the right organizational structure and models to scale a collaborative venture; and * Conduct the collaboration: Some interviewees are already engaged in a collaborative credit union venture. The most common issues to arise are partner competency concerns, metrics and measures of success, the fostering and maintaining of partner relationships, and specific technology barriers and enablers.
“This report gives credit unions a tool with which to document the success and failure of existing collaborative ventures through effective case study development,” said Filene Chief Research Officer George Hofheimer. “It also helps them develop business metrics that tie their collaborative efforts to improvement of the member experience and cost savings. And it helps them increase the role of operational excellence. A balance between member service and efficiency needs to be struck, and collaboration may hold the key,” Hofheimer added. He suggested that initial collaborative efforts focus on processes that can be standardized to help multiple credit unions achieve a common, shared goal. The first step of any collaboration, he said, begins with a small step. “This study suggests that large-scale collaboration may be one of the actions necessary to assure long-term survival,” he added. For more information, use the link.