The digital age has changed the way we read, listen to music and do business. And the effects of our digital lives are having an enormous impact on the credit union system. “Are we at a tipping point?”
That question was at the center of a powerful presentation Monday, at CUNA's 2012 America’s Credit Union Conference in San Diego. John Lass, CUNA Mutual Group senior vice president, strategy and business development, presented a thought leader session titled, “Building the Credit Union of the Future.”
"The credit union system could be in the midst of a ‘strategic inflection point’ due to rapid changes in the competitive landscape, digital technology, and customer channel preferences,” said Lass. A strategic inflection point is a major shift in an industry’s competitive dynamic, and "a period when we have to take a close look at the way we’ve been doing business for so many years,” he said.
Lass offered examples from the movie, music, and publishing industries to explain strategic inflection points in more detail. For instance, after Apple launched iTunes in 2003, the music industry rapidly evolved into the digital age and, since then, 2,700 record stores have closed.
“iTunes is a vivid example of the music industry caught off guard by the digital movement and as a result, the CD and record industries have been hit with devastating losses.”
Other examples he cited included Netflix versus Blockbuster, Kindle versus bookstores, and the rapid decline of Kodak due to the explosion of digital camera sales.
“The key point here is that digital and mobile technologies all played roles in these industry tipping points,” said Lass. “The credit union system now faces the challenges, but also the opportunities of incorporating digital convenience into the cooperative model.
“Unlike the music industry, the cooperative model provides credit unions with powerful competitive advantages.” Lass continued. “There are some tremendously successful examples of credit unions embracing ‘do-it-yourself’ banking, and it’s paying off for their institutions and their customers.
“The challenge for our industry is to adapt to the new competitive dynamic without sacrificing our powerful core values and attributes.”