Once your credit union recognizes the importance of using digital technologies to enhance member experience, how can you use the notion of a digital core to better prepare for digital disruption? What are the digital core attributes you should strive for?
- Agility: This refers to your credit union’s ability to move rapidly and flexibly in order to make adjustments in a continuously disruptive ecosystem. In fact, the constant disruption and innovation in digital businesses often result in new models for work and how work gets done. Job descriptions, tasks, skills, and requirements also tend to be highly fluid. Credit unions should recognize this and develop an approach to minimize the impact of a constantly changing competitive environment.
- Collaboration: Collaboration in today’s work environments involves a mix of virtual and physical employee participation where teams cooperate for a common overarching cause. The ability to collaborate is becoming more important as a key attribute as digital technologies increase member and employee expectations. For instance, members expect digital interactions to be both rich and consistent across every touchpoint they encounter, regardless of the channel, while employees expect a more engaged and fluid work environment. While these goals may seem straightforward, meeting these needs often requires multiple team members to work together and communicateregularly. Collaboration is essential to aligning goals across technology, people, and processes, and to delivering superior member and employee experiences. Therefore, leaders should design work processes so that intentional collaboration takes place.
- Distributed organizational structure: Credit unions traditionally possess a position-based structure in which the most important decisions take place 100 percent with senior management. In this top-down hierarchy, little focus is placed on nontraditional but new types of stakeholders, such as influential members or other residents of the digital ecosystem. As credit unions become more digital, an ongoing shift in decision rights often occurs. Valuable information is increasingly shared with a broader set of traditional and nontraditional stakeholders and new processes/workflows emerge. This changes power and influence, both inside and outside the credit union. As a result, layers of structure may be less necessary.
- Appetite for risk: Credit unions are limited in their risk-taking ability by regulation, especially in the post-2008 environment. As such, building a digital credit union can be a sticky situation. However, given the increased competition from nimble fintech players and nonfinancial technology companies, credit unions will need to make bold decisions to become digital leaders. Moreover, with the increase in digital adoption and use of multiple devices, information access is being democratized. This technology proliferation also raises concerns around new types of risks, such as cyberattacks and data privacy issues. Credit unions will need to increase investment in these areas to be more flexible in managing their risk and security boundaries, likely by continually planning and monitoring activities, identifying large exposures, and focusing their action plans. They are also likely to benefit from increased collaboration across functional areas to address risks and security issues and working with large scale organizations such as CO-OP.