‘Top-Level Thinking, Bottom-Line Success’

CUNA conference helps CFOs ‘build a better bean to count.’

June 14, 2011

On May 15, more than 400 senior finance professionals came together in San Diego for the 17th Annual CUNA CFO Council Conference.

It was the largest, most successful conference in the council’s history, in part because of the improved economic conditions, the draw of San Diego, and the content-rich agenda.

There were many timely topics presented at the conference. Here are some highlights.

Pre-conference workshops

The conference started Sunday afternoon with two exceptional pre-conference workshops: “Building a Better Bean to Count: Innovation Best Practices” from Filene Research Institute Chief Innovation Officer Denise Gabel, and “Using the Interest Rate Risk Model to Build Effective Balance Sheet Strategies” by Tom Bowers, vice president of client services at ZM Financial Systems.

Gabel discussed what innovation truly means in the financial services industry. She worked to change participants’ perception of innovation, and explained how to manage innovation in credit unions. She gave real-world examples to help credit unions stand out, have fun, and become more profitable.

Tom Bowers taught CFOs how to progress their analytics beyond pure compliance reporting to proactive design of the risk/reward tradeoff. He also examined the building blocks of a robust risk culture, as well as key rate duration, a tool that characterizes a credit union’s economic value “gap.”

Conference highlights

Walter Bond, former NBA player and current business owner and motivational speaker, started the conference by discussing the most effective ways to lead and how to be likeable.

Bond highlighted the importance of connecting, not just communicating. In a society and business environment that’s moving so fast, his message was vital for all CFOs to hear.

One of the most widely anticipated sessions of the conference was “Interchange: Now What?” Chris Joy and Norm Patrick from PSCU Financial Services presented the challenges that lie ahead for credit unions regarding the pending interchange rule.

They talked about possible outcomes of the rule, and various strategies to assess, monitor, and manage the debit card portfolio.

Joy and Patrick suggested assigning ownership for the portfolio and handling the card program like any other business unit, complete with a profit and loss statement.

They said managing the portfolio—tracking the number of cards issued and percent activated, directing card activity to more profitable channels, knowing what the most popular and profitable purchases are, etc.—may result in more income after the interchange rule goes into effect.

Next: More great speakers

Other great speakers:

• David Hilton, D. Hilton Associates Inc. outlined what it will take for CFOs to make it to the very top. He addressed what CFOs should and shouldn’t do in an interview, and how CFOs should prepare to become the CEO.

With a significant number of CEOs retiring in the next five years, CFOs need to be ready to lead. This session went a long way in planting the seed of preparation.

• Mario Shiliashki, MasterCard Worldwide, discussed “Innovative Payment Solutions” and the need to be relevant in technology. With the move to mobile payment technologies, EMV cards, and the digital transformation of business, credit unions must invest in technology and stay ahead of the curve.

Credit unions have the opportunity to use technology to know our members' spending behaviors. This will allow credit unions to target-market, offer targeted rewards programs, and improve member loyalty.

• Clifton Gunderson presented a mini workshop on merger accounting, including a step-by-step guide to completing due diligence, conducting a valuation of the acquired credit union, and the changes to the accounting rules.

• Lisa Renner, CU Holding Co., detailed the importance of collaboration and how it can drive the bottom line and improve value for members. She says the credit union model is at a crossroads, and in order to make it to the next level, credit unions must collaborate! She presented several examples currently in the industry, and then challenged attendees to think of ways their credit unions could collaborate.

• Bill Cheney, CUNA president/CEO, presented an update on the industry, including key regulatory and legislative issues.

• Tina Gibson, president of So Savant, led a breakout session on the principles of leadership. This engaging and interactive session was well received as Tina reminded CFOs of the power of strong leadership. She says time doesn’t change the principles of leadership.

• Ryan Hayhurts, The Baker Group LP, discussed “Investment Strategies for 2011 and Beyond.” This packed session was something all CFOs wanted to listen to.

With market rates at historic lows, coupled with historically low loan growth, the investment portfolio has become an increasingly important part of credit unions’ balance sheets. Ryan explained how to increase portfolio yield while minimizing interest rate risk.

Next: Out of the ordinary

Out of the ordinary

The CUNA CFO Council Conference did some things a little differently this year. We invited a local MBA student to write a white paper on a credit union topic of her choosing.

In return, the student—Anne Legg, vice president of marketing at Cabrillo Credit Union—received credit at her university, as well as a speaking opportunity at the conference. Legg wrote her MBA thesis on the sustainability of the credit union business model.

CUNA Economists Mike Schenk and Steve Rick conducted an engaging and thought-provoking “Finance Face-off.” Mike and Steve presented various views of the overall macro-economy, and then discussed what it will mean for credit unions in 2011 and 2012.

Both Mike and Steve believe the yield curve will flatten in 2012 as the Federal Reserve raises short-term interest rates.The consequence for credit unions: lower spreads.

Many CFOs presented case studies on a variety of topics, including “Best Practices in Tracking and Reporting TDRs,” “Best Practices from Multi-Disciplined CFOs,” and “Performance Excellence Program: Firsthand from a Baldrige Credit Union.”

The conference concluded with two engaging and thought-provoking general sessions: “Leadership Strategies for a New Era,” presented by Mark Sievewright, president of Fiserv’s Credit Union Division, and “Rich Thinking,” presented by author/speaker Tim Richardson.

Mark discussed the transformation underway in the U.S. financial services industry and how credit unions can capitalize on it. Many of the barriers credit unions face are internal, including the resistance to change.

Tim gave an entertaining speech on the need for change. How one responds to the change in their environment will determine either the organization’s demise or destiny. Tim challenged all attendees to leave their comfort zone, promote creative thinking in their organizations, and encourage innovation.

As a saying goes, “information without action is useless.” It’s imperative for CFOs to take action on topics they found to be relevant for their personal growth—and that of their credit unions.

BRANDON MICHAELS is CFO of Mazuma Credit Union, Kansas City, Mo., and vice chair of the CUNA CFO Council Executive Committee. Contact him at 816-361-4194.