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As credit unions emerge from the pandemic, their leaders are tackling familiar challenges that have grown more acute—and also dealing with a few new pain points. In these survey results, Canadian credit union leaders share their views on everything from the spike in cybersecurity threats to the war for talent to the always-on challenge of customer experience.

Status quo or levelling up?

Spotlight on Canadian credit unions

Sam Khoury
National Financial Services Leader

Credit unions have always excelled by doing more with less. Coming out of the pandemic, leaders in the industry have a rare opportunity to turn this moment into a watershed by increasing member engagement and getting strategic about digital transformation.

Top priorities

1.    Recruiting/retaining top talent

2.    Investing in technology

Top challenges

1.    Optimizing customer experience

2.    Expanding customer/member base

3.    Cross-channel member service

Top IT challenges

1.    Rising IT costs

2.    Cybersecurity and data privacy risks

Strategies for next three years

1.    Mergers and acquisitions

2.    Auxiliary system implementation 

3.    Robotic process automation

The big picture

While leaders recognize the value that the latest technologies offer, many struggle to implement them. Four out of five respondents cited lack of resourcing as the most significant roadblock to implement the latest technologies, and almost half (50%) said a lack of internal expertise prevents them from deploying them effectively.

Overcoming roadblocks to digital maturity

Management will need to stay focused. Seventy-five percent of companies that align their digital transformation with business objectives see a return on investment, according to the BDO Midmarket Outlook Report. This stands in contrast to zero for those who haven’t aligned their plans and 44% for those who responded neutrally on the subject.

That may be part of the reason that the credit union leaders we surveyed are still ramping up their digital transformation. A full 60% say their organizations are in the process of developing a digital transformation strategy, and less than one-fifth (17%) are currently implementing one. Yet digital maturity is clearly on the move: only 3% of respondents reported no plans at all for digital transformation.

Digital transformation contains a big bucket of tools and technologies, but credit union leaders are tailoring the tools they choose to the strategies they use. 

The most popular technologies among our respondents are popular by a large margin: data analytics (deployed by 40%) and cloud computing (by 34%). Enterprise resource planning software, the next most popular tool, stands at 14% deployment. 

Even more interesting is the number of technologies that first-adopter organizations plan to deploy in the next year. Credit union leaders see the digital maturity gap—and are taking steps to raise their game.

Finding the time and resources
to stay compliant

Risk management and compliance are foundational to credit union success—particularly as leaders increase their digital presence and manage cybersecurity. And leaders are staying vigilant, with almost three-quarters saying they updated their risk assessment in the past year.

They also reported that they invest in a wide variety of risk assessments.

Where credit unions struggle is identical to their experience with digital deployment: finding time and resources to do the work.

To respond, they are supplementing their internal teams by leaning on external providers. In our survey results, a full 85% of credit union leaders reported using externally developed anti-money laundering training (71% web-based, 14% in-person). And more than two-thirds (69%) said an external provider conducted their most recent anti-money laundering review, at least in part (46% cited only just a third party; 23% reported a hybrid internal-external arrangement).

Credit unions are also increasingly bringing in technology to power their risk management and compliance. Fraud detection, regulatory reporting, and transaction monitoring top the list, but the list of use cases continues to grow.

Setting up for success with structures
and operations

Beyond specific technologies to protect and grow their credit unions, leaders are assessing the processes and structures that support their operations. When asked what area of the business offers the most potential for performance improvement, nearly half of respondents (43%) cited more efficient processes and systems.

In fact, less than one-third (29%) are confident to a large or very large extent that their company’s organizational structure and infrastructure are set up to enable efficient operations.

Sam Khoury
National Financial Services Leader
skhoury@bdo.ca

Methodology

This report reflects the responses of a select group of credit union decisionmakers. The survey was conducted by Leger Marketing in the fall of 2021 both online and by phone. A total of 35 senior executives, senior managers, and managers in Canadian credit unions shared their views.

Status quo or levelling up?

Spotlight on Canadian credit unions

As credit unions emerge from the pandemic, their leaders are tackling familiar challenges that have grown more acute—and also dealing with a few new pain points. In these survey results, Canadian credit union leaders share their views on everything from the spike in cybersecurity threats to the war for talent to the always-on challenge of customer experience.

SCROLL

Strategies for next three years

1.    Mergers and acquisitions

2.    Auxiliary system implementation 

3.    Robotic process automation

Top IT challenges

1.    Rising IT costs

2.    Cybersecurity and data privacy risks

Top challenges

1.    Optimizing customer experience

2.    Expanding customer/member base

3.    Cross-channel member service

Top priorities

1.    Recruiting/retaining top talent

2.    Investing in technology

The big picture

Sam Khoury
National Financial Services Leader

Credit unions have always excelled by doing more with less. Coming out of the pandemic, leaders in the industry have a rare opportunity to turn this moment into a watershed by increasing member engagement and getting strategic about digital transformation.

Overcoming roadblocks to digital maturity

While leaders recognize the value that the latest technologies offer, many struggle to implement them. Four out of five respondents cited lack of resourcing as the most significant roadblock to implement the latest technologies, and almost half (50%) said a lack of internal expertise prevents them from deploying them effectively.

That may be part of the reason that the credit union leaders we surveyed are still ramping up their digital transformation. A full 60% say their organizations are in the process of developing a digital transformation strategy, and less than one-fifth (17%) are currently implementing one. Yet digital maturity is clearly on the move: only 3% of respondents reported no plans at all for digital transformation.

Digital transformation contains a big bucket of tools and technologies, but credit union leaders are tailoring the tools they choose to the strategies they use. 

The most popular technologies among our respondents are popular by a large margin: data analytics (deployed by 40%) and cloud computing (by 34%). Enterprise resource planning software, the next most popular tool, stands at 14% deployment. 

Even more interesting is the number of technologies that first-adopter organizations plan to deploy in the next year. Credit union leaders see the digital maturity gap—and are taking steps to raise their game.

Management will need to stay focused. Seventy-five percent of companies that align their digital transformation with business objectives see a return on investment, according to the BDO Midmarket Outlook Report. This stands in contrast to zero for those who haven’t aligned their plans and 44% for those who responded neutrally on the subject.

Finding the time and resources to stay compliant

Risk management and compliance are foundational to credit union success—particularly as leaders increase their digital presence and manage cybersecurity. And leaders are staying vigilant, with almost three-quarters saying they updated their risk assessment in the past year.

They also reported that they invest in a wide variety of risk assessments.

Where credit unions struggle is identical to their experience with digital deployment: finding time and resources to do the work.

To respond, they are supplementing their internal teams by leaning on external providers. In our survey results, a full 85% of credit union leaders reported using externally developed anti-money laundering training (71% web-based, 14% in-person). And more than two-thirds (69%) said an external provider conducted their most recent anti-money laundering review, at least in part (46% cited only just a third party; 23% reported a hybrid internal-external arrangement).

Credit unions are also increasingly bringing in technology to power their risk management and compliance. Fraud detection, regulatory reporting, and transaction monitoring top the list, but the list of use cases continues to grow.

Beyond specific technologies to protect and grow their credit unions, leaders are assessing the processes and structures that support their operations. When asked what area of the business offers the most potential for performance improvement, nearly half of respondents (43%) cited more efficient processes and systems.

In fact, less than one-third (29%) are confident to a large or very large extent that their company’s organizational structure and infrastructure are set up to enable efficient operations.

Setting up for success with structures and operations

Sam Khoury
National Financial Services Leader
skhoury@bdo.ca

This report reflects the responses of a select group of credit union decisionmakers. The survey was conducted by Leger Marketing in the fall of 2021 both online and by phone. A total of 35 senior executives, senior managers, and managers in Canadian credit unions shared their views.

Methodology

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