Written by Mark Fischer – Palm Beach Florida.
AACUL Winter Conference, 11/14/13
There are definitive moments in any career when it is easy to say that, “there was before, and there was after.” I find myself in one such moment now. Today, I present at the annual AACUL conference (The American Association of Credit Union Leagues). For just over a year, Inspire Commerce has secretly been working with Credit Union Strategic Partners, the services branch of the Mountain West Credit Union Association, to create something awesome for the Credit Union Industry. The big reveal to every services organization in the US is today.
The credit union industry is faced (as are all banking institutions) with some HUGE hurdles in the coming years. It is projected that the industry as a whole will see a 35% consolidation in the next 5 years. If this was a flu epidemic, then 35% of the human population would be departing the planet with the rest taking over their land. This is serious. Every business day in the US, a Credit Union goes out of business. As I will be saying in my presentation… The CD is dead, The fax machine is dead, VHS is dead, and the Canary is dead… it’s time to save the coal mine and everyone working in it!
There are over 7000 Credit Unions as i write this, and each runs independently in all manners, negotiating terms with vendors, building technology, etc. The diversity is amazing, because with diversity comes stability which is GREAT for our economy. At the same time, with 7000+ individual heads, there is little to no framework for optimization. There is more money in Credit Unions in the US than any single bank, yet Credit Unions are stuck at a 7% market share with no real tools to survive the technological evolution of this decade. The one thing they need, in our opinion, is a serious mobile strategy. Not just mobile banking, as they are actually doing fairly well there. They need to own electronic payments. Simple, elegant, effective, and cheap. This is a scary lateral step for them. They own issuing debit cards today, but electronic payments is a little bit of a step out of their comfort zone. They also need to move front and center as the “heroes of local.” They were born this way, but few people know the back story.
Why Credit Unions?
I think the group of Credit Unions that put together http://makeyourmoneymatter.org in partnership with PSCU (http://www.pscu.com ) did an AWESOME job of telling the story in this website. Credit Unions are committed to community first, profit second (and technically they are non-profits so profit only so long as it helps the community grow). This is SO different than the Wall Street mentality that frustrates so many Americans.
Before there were B Corporations…
As a B Corporation founder, and someone who spends much of my time helping push the B Corporation movement forward, I can say with my whole heart, the coolest finance kids on the block are Credit Unions. They created a framework in the 1800’s that is the equivalent of a solution based Occupy Movement. They worked to take money out of the central banking system, and placed it in non-profits who’s commitment is to the community first. This notion was nothing less than revolutionary. Today, Inspire Commerce and my family keep our money in Credit Unions. We want to see our capital in the bank benefit our community in the form of loans for community development. We do a ton of work with Wells Fargo as our sponsor bank, and we love them. There are things large international banks do that Credit Unions simply can’t do today. But the game of electronic payments is one Credit Unions can’t avoid if they want to survive.
As B Corporations…
We need to support Credit Unions. I can say that their successes to date nourish my soul. They did something radical over 150 years ago that lives on today. I know in meeting with inspirational companies like GoLite, New Belgium Brewing, Ben and Jerry’s, Patagonia, Etsy, Kleen Kanteen, Best Organics, Namaste Solar, First Affirmative, and the list goes on 859 more times (and growing daily).. that we know we need to become the change we seek. I can say with my whole heart that the B Corporation movement has helped create more meaning in the world. And while we should feel incredible about this… launching in 2007 and now being in 26 countries… we should also take a moment to thank Credit Unions. They started this in 1852 and have a century and a half of wisdom from juggling the community first call.
I hope that we can give Credit Unions the help that they deserve. When I’m with the leadership in the community here, I feel like I’ve stepped into a world of wisdom. They can’t afford to be radical… they are financial institutions. They need to be conservative. At the same time, what they did and do every day is radical. They help make your money matter in a world where most people are legally required to make your money profit for their share holders. So here is to credit unions, and a successful introduction of CU.PAY to the industry! We’ll share more about it as the project leaves our incubator to take flight in the world.