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.
Recruiting Challenges
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.
Onboarding Changes
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.
Technology Updates
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:jomalley@comharpartners.com