Small credit unions survive on their personal relationships with members. But back-office support, while essential to the survival of any financial institution, can be resource intensive and diminish member engagement opportunities for credit unions with limited assets, especially in an age where technology and compliance require both high-cost and dedicated expertise.
Fortunately, the credit union system offers solutions to back-office challenges through outsourcing and collaboration. Among the solution providers is Aux, a 55-owner credit union service organization (CUSO) offering back-office services including accounting, compliance, and data analytics.
“Our mantra is to help small and medium-size credit unions avoid what they often think is the only option—merge to survive,” says Alan Bergstrom, vice president of marketing and business development at Aux, a CUNA associate business member at the associate level. “We don't believe that's the right direction for every credit union. We want to give them an alternative to be able to survive and thrive. The credit union movement is much stronger with more credit unions here to serve consumers.”
Bergstrom notes that the collaborative model of the CUSO structure makes Aux’s services accessible for virtually every credit union.
“Because it’s a shared service, we can provide our expertise at a much lower rate than if a credit union had to hire its own staff,” he says.
Culture, too, is important to a credit union’s ability to optimize the member experience. Aux blends its expertise with partner credit unions’ staff, says Bridgette Mayon, Aux business development associate.
“We know every credit union is unique,” Mayon says. “We work hand-in-hand with our clients. Culture includes their staffing and their processing, but also their membership base. We know that certain members have special needs at credit unions. That’s part of the culture, too.”
Another technology- and resource-intensive tool is data analytics. Turning member account and demographic information into actionable insights, and developing that expertise in house, has been a steep hill for even some of the largest credit unions to climb.
In 2020, Aux developed a data analytics solution in partnership with TIBCO, a data analytics solutions provider offered through the shared services model.
“Data analytics is so important in today’s operating environment, but it requires expertise and resources,” Mayon says. “We’ve built our solution from the ground up. We brought in a subject matter expert who connected with credit union owners in establishing their data needs and driving strategy.”
Among Kim Bohannon’s responsibilities as chief innovation officer at the Tennessee Credit Union League is overseeing a compliance hotline. Her background includes 10 years of compliance experience with credit unions.
“Like a lot of folks with trade associations, I’ve got multiple responsibilities, whether it’s compliance, managing events, or communications,” Bohannon says. “So, we supplement our compliance program with Aux.”
The league supports its compliance hotline by phone and email, Bohannon says. “I want to treat our member credit unions just how they treat their members,” she says. “They need answers right away. But some answers require in-depth research. If I’m otherwise occupied or if I can’t provide an answer right away, I’m confident in handing that question to Aux.”
Bohannan appreciates that Aux consultants are familiar with credit union operations.
“They’ve all worked in credit unions,” she says. “Sometimes you need a practical explanation. They are able to provide that. That’s so important in compliance.”
ValleyStar Credit Union in Martinsville, Va., uses Aux for services including marketing compliance.
“Advertising, billboards, magazine ads, digital—everything has to be in compliance,” says Becky Freemal, chief marketing communication officer at the $575 million asset credit union. “If we push a new credit card program, we have to update the disclosures. We’ll send them an e-mail with the updates and ask them if it works. They help us make the changes. It’s important that we get messaging out but we have to do it in a compliant way.”
Freemal views third-party suppliers as part of her marketing team.
“You need a diversity of skillsets and thought,” she says. “Aux is more than a second set of eyes. They improve our communication with members and help us provide better products and services.”