By Robert McGarvey
A two word question recently asked by a credit union board member puts in a starkly bright light the challenge many, many face: “What’s fintech?”
No need to embarrass this board member who will remain anonymous. In fact this director may deserve some applause for knowing what he didn’t know.
But a 2018 reality for many credit unions is that they need to confront a big question: do we have the right board to survive and thrive in the 21st century?
The answer in just about all cases is that, no, you don’t have the right board. Parts may be exactly right but almost certainly there are changes that must be made as every credit union confronts the imperative to digitally transform.
Smart boards – and smart credit union CEOs – are already tackling this issue.
You’ll remember that in 2011 NCUA threw down the challenge that directors have to demonstrate a measure of financial literacy. There was grumbling about that but, really, it’s essential and important.
Just maybe there now should be a requirement that board members have a measure of technology literacy. Not enough to write code. But enough to pay a bill in a mobile banking app, deposit a check with mRDC, and send a p2p payment to a relative. Financial services are migrating to the mobile phone and the institutions that plan to be around will have leaders who understand and use technology.
Your board has a distance to cover?
Join the club.
But know that some are taking steps to get there and they will share what they know.
At South Bay Credit Union in California, board chair Chris Otey said that a focus has been on creating a board that’s ready for today’s challenges and, said Otey, there are two ways to do this.
First: commit to ongoing education of the board. At South Bay, most board members will do an educational conference each year. CUES, CUNA, and many state leagues offer good educational programming that can help directors adapt to the 21st century.
Is that asking too much of volunteers?Sarah Snell Cooke – former editor in chief of Credit Union Times and now a consultant in Maryland – said she fully supports increased educational requirements for board members. She added: “Not just a webinar or one conference. Some feel like that’s asking a lot from volunteers, and it is but if you’re not prepared to do the job to the best of your ability, don’t sign up.”
Jennifer Kurttila Zanassi, CEO of Western Heritage Credit Union, said: “My board has attended the certification at CUNA for board members. After the class, they came back so much more involved and energized.” She added: “I’m truly blessed with a great board.”
But don’t stop with conferences. Make tech education a continuing focus. At South Bay Credit Union, for instance, Otey ups the educational ante by personally leading a short – perhaps 10 minute – tech focused segment at each meeting. His goal is to update directors on tech developments, emerging threats, and innovative steps other credit unions are taking. Said Otey: “Every credit union should have an employee or board member regularly update the board on tech. It’s become essential.”
The second step: “we have actively recruited new board members,” said Otey. Recently, for instance, he persuaded a 28 year-old member with good tech fluency to join the board. Such approaches aren’t always successful, Otey acknowledged. But he sees this as a necessary part of keeping a board strong.
In a similar vein, Cooke said she “recommends a board assessment, preferably by a third party, but those can be politically touchy and expensive. Honest self-assessment can be useful as well. The chairman should collate and review the self-reported strengths and weaknesses to determine subject matter areas that need a boost when it comes time to recruit new board members.”
That’s now a necessity. Recruit to fill needs. Said Otey: “You can’t wait for new board members to find you. You have to go out and find them.”
Bottomline: “Your board can’t look and behave the way it did in 1987,” said Otey. Succeeding in the 21st century will take a 21st century board and the only way to get there is to start making changes now.