• Jon Ungerland

Why Your Core Business Strategy Can’t Succeed Unless Synthesized with your Core Technology Strategy

Updated: Oct 3, 2019

In 2018, DaLand CUSO launched an industry-wide mission to partner with credit unions and cultivate credit union relevance through a revolutionarily simple approach to credit union technology. We call it Core-Optimized Digital Experience, or “C.O.D.E.” The basic premise is that data is the most valuable commodity in contemporary commercial and community economic enterprises; and, as a result, all credit unions should be strategically focused on data ownership, stewardship, and control by prioritizing the power of your core technology – the literal core of your data center of gravity and the core behind your modern, digital, business strategy.

Perhaps you’re thinking to yourself, “That’s how it is now at my credit union; we keep everything on the core.” Hardly. For example, stop and think about one of the most predictable silos in credit union operations and technology ‘strategies’ – online/mobile banking. How much data is stored on your home banking platform that never touches your core? Just this week, we witnessed this very problem at a client site. This practical example and its related ripple effects are well worth a closer look.

This credit union is swinging for fences, aiming to drive in multiple runs by converting their core and online banking systems at the same time. The idea/intent: offer a relatively painless enrollment process for their new online banking at the same time as associated changes are already impacting operations as a result of the core conversion. To pull this off, it’s imperative that the credit union has current, accurate, centralizedinformation about each member to streamline re-enrollment and prevent inundating calls to the contact center/branches at precisely the point when those operational teams will be focused on turning up the engines to full throttle and moving the USS Credit Union forward with the new core.

Simple, right? Wrong.

The credit union realized (via a series of core-centric concerned conversations with us) that relevant and required data is currently stored stored in three or four different databases and, worse yet, the data in each database is not kept in synch and does not match.They also explained that their current digital banking solution doesn’t update their core when members login to provide demographic or other personal data updates. So, thanks to the typical diabolical trinity of external platforms, siloed data, and bolt-on operational solutions, when it comes time to launch this new, modern, enhanced, and sophisticated digital banking solution, many members will have to call in or personally visit a branch to update their personal information to allow them to complete enrollment.

Not exactly the ideal way to launch a new digital platform or to start a planned digital transformation; but a tragic reality of the sins of the past and lacking cohesion between core business and core technology strategy! And, sadly, a story we see all too often when credit unions attempt to chart paths to future relevance but immediately discover they’re dragging the dead weight of numerous historical and technological ‘anchors’ behind their shiny new ship and the core which shouldbe functioning as the power-plant to drive the USS Credit Union forward into the ‘blue ocean’ strategies!

To be clear, the new technology isn’t the problem. This credit union made very good choices for its new core and digital banking partners/solutions. The problem wasn’t the technology selection; it was the complete lack of an effective business and data strategy to support the technology strategy. We’re not necessarily blaming the credit union, either. After all, bolting on disparate platforms as a means to keep up with technological innovation has become the de facto strategy of our industry over the past 30 years; it’s an idea most of us inherited, and thus it’s the ‘strategic’ norm. This is the technology ‘strategy’ model that’s been foisted on credit unions by vendors and platform providers for decades. It is, however, also the troublesome and unsustainable technology model that C.O.D.E. seeks to fix; thus positioning credit unions in greater control of their own data, delivered digital experiences, and ultimately their destinies as relevant players in the local economy.

The unfortunate reality, at least for this latest practical example of a credit union project, is this lame enrollment process is going to be each member’s first impression of the CU’s new, whizbang technology; and will be the member’s first impression of the new strategy the CU has been communicating for months. Will the members get over this unfortunate sour experience stemming from fragmented historical strategies and decisions? Eventually. Will some get frustrated and leave? Probably. Could it have been avoided altogether by simply synthesizing core business and core technology strategy? Absolutely!

If you’re wondering why we think C.O.D.E is so important, it’s because this is just onereal-world example. By now you’ve read dozens of articles about how data is the essential ingredient to future relevance. If you don’t develop an effective, realistic, comprehensive, core-centric data strategy right now, your credit union may not have a future. That’s why we created C.O.D.E; and that’s why we hope to continue serving credit unions towards realization of the radical simplicity of the core-centric philosophy!

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