Credit union board members are not only responsible for the financial security of their institution, but also the proper safeguarding of member sensitive information. Proper safeguards ensure a credit union's ability to serve its membership, tasks that are accomplished through the adoption of technology as member behavior changes. The best way to ensure your board of directors understands the importance of technology is to remind them of this responsibility and build the business case to make the decisions easier. Here are 3 reasons why your board should consider technology upgrades to be a major priority as you plan for 2017:
1. Cost. Technology is not cheap. The upfront costs of changing and updating core systems can seem insurmountable when looking at the short term. It is important to not be shortsighted, instead look at the costs vs. risks for the future growth and sustainability of your CU. In order to expand product offerings, engage your existing membership and acquire new members, you must be able to pivot and adopt new technologies as they emerge. For example, enhancement of your mobile banking app, internet banking portal, and e-signature capabilities are investments into making your members' lives easier. If you are offering member services that are hitting the mark you will not only increase member satisfaction, you will also achieve credit union efficiency.
2. Business Case with Key Performance Indicators. The business case is intended to convince your board of the merits of an upgrade or core conversion. It is a key part of your project documentation and sets out to explain why the project is necessary. It will take some time to compile, but time that is well worth taking. Therefore, it is crucial to do the research and determine the KPI's your core conversion will look to improve, including:
- Return on Assets
- Net worth Ratio
- Efficiency Ratio
- Loan to Share Ratio
- Loan Originations
- Members per Employee
3. Security. The landscape of business in the 21st century has dramatically changed due to technology. And for every new advancement that makes our lives easier, there are people who want to exploit it. Cybersecurity (protecting your member data) is more important now than ever before. If your credit union technology is outdated, your member data could be at risk. Without properly managing technology, board members and directors often misunderstand their culpability and responsibility to safely chaperon their financial institution into the future. Cybersecurity attacks only need one weakness to exploit your network. Educate your board about protecting your credit union data and how technology upgrades, or investment in updating your credit union core system software may be necessary.
