Every day, technology affords businesses and individuals ways of doing things that are faster, better and easier. Board directors are also aware of how much their credit union’s members and employees are positively impacted by technology. Credit union boards are responsible for the short- and long-term goals of their institutions. In forming their goals, they need to account for societal and economic changes, as well as the impact of technology. Board directors also have to be prepared that technology can bring threats as well as opportunities.
Analyzing Data for Use in Strategic Planning
According to the recent McKinsey Global Survey, corporations have identified nine areas of potential business disruptions. Boards must analyze how each of these disruptors can affect their credit union business and its customers. The disruptions include:
- Changing customer behavior and preferences
- Disruptive business models
- Regulatory changes
- Political risks
- Geopolitical risks
- Diversity of organization’s leadership
- Activist investors
Two of the biggest areas on the disruption list where board directors need to be particularly concerned are changing customer behavior and preferences and cybersecurity. Board directors should also be concerned with digitization because making improvements in this area may be the answer to reconciling issues with the other two areas.
Analyzing Data on Changes in Consumer Behavior
One of the many changes that technology brings to credit unions is changes in their members’ behavior. According to the Credit Union Times, the market power is starting to shift from organizations to consumers. This means that for boards to be effective, they need to look at the effects and trends that are causing their members’ behavior to change. The McKinsey survey indicated that 64% of boards included changing customer behavior or preferences on their board agendas.
Data helps boards understand issues like the benchmark ages where consumers tend to have a shift in their thinking about personal finance. Reports educate board directors about such things as generational trends and mindsets and how their members approach their spending habits and lives.
In their decision-making, boards need to be aware that technology continually pushes information in front of their customers. Ads and other propaganda influence their spending habits, banking choices and other financial decisions.
Banks and credit unions have long focused their time and attention on the baby boomer generation, and now it’s time to shift their attention to the millennial generation and the generations that follow it.
Analyzing Data on Cybersecurity and Related Issues
Cybersecurity has become a major topic for boards as one data breach after another is exposed. The McKinsey survey showed that 37% of boards regularly included cybersecurity as a topic for discussion on their board agendas. The internet, mobile devices and the complexities involved with how electronic devices and software programs are interconnected must create concerns for boards as to how they can best deal with risks related to these issues, as well as other risks.
In addition to cybersecurity risks, boards of credit unions face a multitude of other risk factors, including:
- Credit risk
- Market risk
- Operational risk
- Liquidity risk
- Reputational risk
- Business risk
- Systemic risk
Board portal software systems such as BoardEffect offer an online platform where board directors can analyze and collaborate around risks and other pertinent board issues in a confidential, secure space.
Board Portals Offer Useful Features for Efficiency
Credit union boards need a secure online space to manage board business where there is no concern about breaches or leaks, and board portals offer that.
One of the best features of board portals is how they promote efficiency. Board portals allow board directors to receive reports and other information before board meetings. Having ready materials allows board directors to get clarification about agenda items before meetings start, which helps to streamline voting processes.
Another clear-cut advantage for credit union board directors to use board portals is that it gives them the benefit of mobility. This is an exceptionally helpful feature for credit unions that have multiple locations and many out-of-state locations.
Board Portals Provide High Levels of Security
Board governance is complex and demanding for both small and large credit unions. Information security is important for any size credit union.
BoardEffect supports best practices within every cycle of board activity and protects those practices with a state-of-the-art approach to security and services, because they understand the importance of keeping confidential information safe. BoardEffect uses a double-authentication process with a user ID, password and code, so even if an electronic device gets lost or stolen, sensitive board information can’t be stolen.
Run-of-the-mill file-sharing apps weren’t designed with the level of security in mind that board directors need to share sensitive documents. Board portals use tight security across the platform, which protects documents as board directors share and exchange them online. Board directors have the ability to share documents online in real time, creating the ability for instant communication.
Board Portals Create Value Through Efficiency and Cost Savings
Board portals are a green-friendly solution that reduces the labor and material costs for reproducing board books. Some financial institutions reported that they saved $1,100 per board meeting after switching to a board management software system. An analysis by Bank Director magazine affirms the savings of board portals, as they reported that boards of banks and credit unions could save up to $10,000 a year by using a board portal, which calculates their annual savings at 24% per year.
Board portals are user-friendly and highly intuitive, which means new board directors can get up to speed with their duties and responsibilities as quickly as possible. With BoardEffect, credit union boards also get the benefit of 24/7 customer service every day of the year.
In summarizing the benefits of a board portal, Stuart Levine, CEO for Stuart Levine & Associates, says, “As technology upends business ecosystems, diligence in incorporating the changes into your thinking, planning, and culture will prepare you to face the future. Deepening knowledge of your members’ changing needs is a competitive advantage.”