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Collaboration in Practice: 11 Credit Union Case Studies

Credit unions must collaborate in order to thrive. This report shares stories of cooperative efforts that are helping credit unions face today’s market challenges. Their successes—and struggles—should inspire and inform your own partnerships and initiatives.

Executive Summary

We’ve already solved the easy problems. A 10-year boom-and-bust cycle, coupled with historically low interest rates, has forced most of the easy-to-cut costs out of credit unions. Low loan demand during the recession and cutthroat competition coming out of it have made traditional lending difficult. The demand for up-to-date technology gnaws constantly at strategic planners.

Into this mix steps collaboration. It’s one of the first solutions offered by roomfuls of credit union leaders: “If we would just collaborate, we could ...” Insert your own answer: gain market share, drive down expenses, become consumers’ favored financial institution. Each goal comes with a grain of truth. We can do these things, but it’s more fun to envision the payoff than to plan for the many intermediate steps. This report maps out those intermediate steps.

What Is the Research About?

Filene has addressed the issue of collaboration in three reports since 2007. In each of these we discussed the value of collaboration, listed concerns that seemed to explain why more of it wasn’t occurring in our industry, and shared research, models, and success stories from credit unions across the country.

Here we interview leaders from 11 separate credit union collaboration efforts. In addition to their case studies, we synthesize their experiences into a checklist that both long-time collaborators and first-time cooperators can use.

What Are the Credit Union Implications?

Credit unions face a host of significant challenges. These include fierce competition, a broken business model, low member growth, and increasing consolidation. It is clear that new modes of problem solving and innovation are needed to address these challenges.

  • Technology can help drive collaboration. Advances in data sharing, social media, and online tools have vastly expanded the opportunities for and effectiveness of collaboration.
  • Credit union boards need to become more comfortable with strategic risk. Understand that some calculated risks—like collaboration—are actually safer than risk avoidance.
  • Credit union leaders haven’t been convinced of the value of collaboration. To date there’s been limited documentation of effective—even ineffective— collaboration and few metrics that tie collaboration to improved member service. Because credit unions sometimes focus on member benefit at the cost of operational efficiency, this link is imperative.

It’s been four years since Filene published A Road Map for Credit Union Back-Office Collaboration, and we’d love to point to a groundswell of collaborative efforts since that time. But effective collaboration is hard. It requires participants to work outside their comfort zones and almost always involves compromise. It takes time.

That said, Filene believes collaboration is vital to the future of credit unions. The credit union system needs to embrace it in order to survive. Credit unions of all sizes are using collaboration right now to address a variety of challenges. Some are collaborating on large projects, others on small. But they’re all benefiting from working together not only to share ideas but to set goals and make them happen.