Credit Unions

Moderated by Scott Simpson, president of the Utah Credit Union Association

July 9, 2013

One of the hardest things technologically for us is always trying to stay ahead of the curve, because the far point of that curve variates so much and so dramatically that you don’t know. The iPad or your phone—two months later it’s antiquated and outdated. What have you got for me next? That’s a couple of the hardest obstacles for us.

LUND: When you look at the millions, in our case, of transactions and inquiries that our members do on a regular basis, you couldn’t build enough buildings or hire enough people to answer all the questions and do all the inquiries that the members do on their own. It’s like they’re looking every day at their balances and moving money. It’s really an interesting phenomenon. And many of those same people still come into our branch, but they also like the technology.

LONDON: Mobile devices are becoming the preferred computer. And it’s becoming, more and more, consumers’ definition of what a bank or a branch or a credit union is. Just as we’ve seen things transformed throughout our careers in different ways, this mobile banking aspect of it is probably what’s going to drive this next group down.

I agree, they still come into the branch, but I just keep wondering what are they coming in for? What is going to be their need? When all of a sudden everything they do, from deposit capture to a loan, can be done online, what is the need for that branch going forward? What is the need for that person-to-person interaction? It’s going to be a change, more than anything else, from transactional to service or sales interactions.

WAHLEN: There was a question several years ago: What will technology do to improve efficiency? And it is really proving to be a big driver of economic growth. Technology is driving efficiency models within our credit unions that is really growing the economy in our market.

ADAMSON: I’ve been in the business for 15 years. And about the first year after I was in it, we got home banking, and “Wow, look at all the transactions we don’t have to do!” We just rolled out some new products. And the whole time we’re rolling it out thinking, “This is great. The members will self serve themselves.”

But along with that comes all the support. Now I know we’re losing some frontline hours, but we’re having to build some back office systems to support these programs.

NORTON: I have a question about that. Because if you look at the law firm setting, technology has had a very big impact on our support staffs. So the number of paralegals, the number of secretaries, the number of people that support the lawyers have shrunk dramatically in the last 10 years.

Do you think that technology has caused you to hire more employees? Is it a net increase or a net decrease?

ADAMSON: A net decrease.

WAHLEN: It’s a major net decrease. And we can multitask now in ways that we never could 10 years ago. It has improved efficiency dramatically in our area as well.

GOURDIN: We foresee in our strategic planning that in the future we won’t have any staff solely for frontline transactions. The frontline transactions will still exist, but we’re going to have it more specialized in that back office service. They’re performing those frontline transactions that we need to happen as opposed to having that lower-paid staff. So while our salaries may increase for an employee, the overall number of employees we have will stay the same as we grow.

In the course of the last two years, how have your business strategies changed as a result of technology, the consumer world?

NIELSEN: We’ve been investing a great deal into technology, making sure that we can keep up with something that’s going a thousand miles an hour down the road. And making sure that we have the right systems in place so we can not only keep up, but really be first. If you don’t, you’re going to be left behind. So we’re investing a great deal in putting infrastructures in place and taking away the structure of the business in order to really confront the new reality.

How has that affected your brick and mortar plans?

NIELSEN: I’ve heard brick and mortar is dead because of technology. I heard that 20 years ago, too. The reality is brick and mortar has not gone away. Fact is, people just use more touch points more often. The people that use the mobile device, they’ll come into the branch. We have a section of the membership that will only use the branch—they very seldom use the technology. But eventually they’re coming around, too.

PAYNE: Sterling is right, the brick and mortar is not going away. But what’s happening is that brick and mortar is becoming a higher-value transaction. On average, when people come into the brick and mortar it’s either because they have a problem they need help with—and we’ve got an opportunity to fix something and really shine—or they’re coming in for something, a loan, that’s not as easy or they’re not as confident doing online. So when they do come in, we’ve got an opportunity to make more of an impact with a member.

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