Community Banks & Credit Unions: Staying Local in a World That’s Going Global
By J. James O’Malley, Andersen Alumnus and Managing Director at Comhar Partners (originally published on HRMAC.ORG)
The Financial Brand put it: permanently working from home will rock Banks and Credit Unions. While many businesses in the financial services industry have been able to seamlessly make this transition to remote, local Banks and Credit unions, in particular, have a unique set of challenges to manage when recruiting, and onboarding employees while catering to the needs of their stay-at-home members.
Community Banks and Credit Unions (CUs) were built around local communities; they are more focused on personal relationships and service rather than volume and size like other large banks. So how can these institutions offer local, high touch member experiences while shifting to a remote model?
At Comhar Partners, we have a strong Financial Services Practice, so we’ve worked with many institutions in this arena, and here’s what we’ve discovered about the challenges—and solutions—faced during this transition.
Big banks were built for a shift to digital—they have size, reach, brand recognition, and budgets to recruit globally. However, just because CUs weren’t built on a global scale, doesn’t mean they’re not offering digital and virtual member experiences—and hiring employees that can implement that local, high-touch experience from a distance.
Alliant Credit Union is a $10b+ asset Credit Union with two branches—and is almost entirely digital. Alliant is member-owned and headquartered in Chicago, Illinois. Alliant provides exclusive benefits to employees, retirees, and members of qualifying organizations and their family members. Comhar Partners has worked extensively with Alliant Credit Union to recruit top talent that can successfully manage their digitalization. For example, our professionals at Comhar Partners have placed Alliant’s Senior Vice President of Operations & Technology and Vice President of Information Technology.
Maximize the shift: Whether you want to hire local or cast a wider net, hiring a recruiting firm ensures that you find the people who can offer the personalized experience your brand offers without being in-person. What’s more, many search firms have been executing remote hiring for many years, so they can help you navigate this new process with ease and effectiveness.
Despite their local focus, CUs are well-suited for this new world. Their small size makes them agile, and, as we saw at the start of COVID, many of them adjusted very quickly to changing member interactions and safety protocols.
Now, looking ahead, it’s important to consider what comes next, like onboarding new employees as they begin to hire remotely. Onboarding can present its own challenges—but none of them are impossible to overcome. The key is to start small. As Art Davidson, Managing Director at Comhar Partners explains:
“Looking short-term, this may mean considering the budget necessary for offering a temporary home-office set-up for new hires. When considering long-term changes, now would be the time to invest in developing a fully digital onboarding process that can be repeated again and again.”
Maximize the shift: If the shift to remote will be permanent, or even semi-permanent, start creating an on-demand video portal for candidates to access at home. These should be paired with new materials for digital expectations, streamlined workflows, and more. These resources will continue to be valuable for in-house employees as well—managers can do less of the onboarding and let employees guide themselves.
Privacy Concerns and Cybersecurity
Credit Unions are built on community trust. A 2019 Pymnts survey found that 65 percent of CU customers chose their financial institution because they trusted them. That’s why one of the most challenging aspects of this shift is maintaining privacy with remote employees and members. As the Pymnts team explains:
“Failing to prevent a data breach is a surefire way to lose that trust, however. Credit unions possess vast troves of personal information such as credit card data and Social Security numbers that could devastate members if leaked. Those affected by such incidents are likely to switch to another credit union or even abandon the industry entirely.”
What’s more, CUs, banks, and other financial services institutions have to answer questions like:
- Is there enough security for our mobile app?
- Do we need to invest more in cybersecurity?
- How are we collecting and protecting our members’ data?
- How do we manage the privacy of documents?
Between February and March 2020, cyberattacks on financial institutions rose by 38 percent making cybersecurity a critical element of focus for all financial institutions shifting to a remote model.
Maximize the shift: Now is a great time to work with a data-security consultant, whether through a third-party vendor or new hire. In a world that’s actively shifting to digital, before and after COVID, having these privacy and cybersecurity elements in place will allow financial institutions to continually expand.
Shifting to remote comes with its own set of technology challenges and for financial institutions, this has been a consistent theme. As Scott Clark, Managing Director of Comhar Partners, explains, “More CUs and banks are recruiting Chief Information Security Officers, and many are also moving to partner with financial technology (fintech) companies as well.”
In fact, in Cornerstone Advisors’ 2020 report, 76 percent of CUs said fintech partnerships would be important to their business strategies in 2020. Yet the percentage of banks and CUs that have deployed AI and machine learning tools is in the single digits, according to the same report.
Expanding technology capabilities takes time, money, and resources, but looking forward, the right partnerships—both in-house and out-of-house—will set financial institutions up for long-term health and viability. The key right now, however, is to act fast to keep pace with employee and member needs.
Maximize the shift: Don’t wait to roll-out tech changes. Delta Community Credit Union was working to expand their work-from-home capabilities to support up to 750 remote employees through a new virtual private network (VPN), and they explained to Credit Union Times: “What we expected would be about a four-month project, we decided to roll out over just a few days.”
Shifting from the Office to Home
CUs have many considerations to make as they move from a local business model to one that supports employees who work-from-home, members that need greater digital access, and new tech infrastructure to support privacy regulations that are ever-changing. However, this shift isn’t impossible; on the contrary, CUs have been leading the way in technology implementation before COVID and we anticipate they’ll continue to do so well after.
About the Author: J. James O’Malley, Cofounder & Managing Director at Comhar Partners, www.comharpartner.com; has been developing HR and talent acquisition solutions for corporate CFO’s, audit, tax, advisory and global consulting firms (including Huron Consulting Group, Arthur Andersen, Deloitte and Lante) since the mid-90s. Jim has seen firsthand why leaders are frustrated by and don’t “get” recruiting. He can be reached at:firstname.lastname@example.org