June 27th, 2022
Tennessee Credit Union League Chief Innovation Officer Kim Bohannon (left) and ValleyStar Credit Union Chief Marketing Communication Officer Becky Freemal.
Shared services allow small credit unions to focus on member engagement.
Small credit unions survive on their personal relationships with members. But back-office support, while essential to the survival of any financial institution, can be resource intensive and diminish member engagement opportunities for credit unions with limited assets, especially in an age where technology and compliance require both high-cost and dedicated expertise.
Fortunately, the credit union system offers solutions to back-office challenges through outsourcing and collaboration. Among the solution providers is Aux, a 55-owner credit union service organization (CUSO) offering back-office services including accounting, compliance, and data analytics.
“Our mantra is to help small and medium-size credit unions avoid what they often think is the only option—merge to survive,” says Alan Bergstrom, vice president of marketing and business development at Aux, a CUNA associate business member at the associate level. “We don’t believe that’s the right direction for every credit union. We want to give them an alternative to be able to survive and thrive. The credit union movement is much stronger with more credit unions here to serve consumers.”
Bergstrom notes that the collaborative model of the CUSO structure makes Aux’s services accessible for virtually every credit union.
“Because it’s a shared service, we can provide our expertise at a much lower rate than if a credit union had to hire its own staff,” he says.
Culture, too, is important to a credit union’s ability to optimize the member experience. Aux blends its expertise with partner credit unions’ staff, says Bridgette Mayon, Aux business development associate.
“We know every credit union is unique,” Mayon says. “We work hand-in-hand with our clients. Culture includes their staffing and their processing, but also their membership base. We know that certain members have special needs at credit unions. That’s part of the culture, too.”
Another technology- and resource-intensive tool is data analytics. Turning member account and demographic information into actionable insights, and developing that expertise in house, has been a steep hill for even some of the largest credit unions to climb.
In 2020, Aux developed a data analytics solution in partnership with TIBCO, a data analytics solutions provider offered through the shared services model.
“Data analytics is so important in today’s operating environment, but it requires expertise and resources,” Mayon says. “We’ve built our solution from the ground up. We brought in a subject matter expert who connected with credit union owners in establishing their data needs and driving strategy.”