Staying Ahead of the Pack

How does your credit union plan for the future? Do you actively watch and interpret the shifts in our industry, society and economy? Do you incorporate any of this into your strategic planning? Without visiting a fortune teller, how can you forecast upcoming trends?

Predicting the Future

Over the past two years, MEMBERS Development Company, a network of nearly 70 leading credit unions, has been working on doing just that. The process is one that can help any credit union better prepare for the future.  

Step one is to identify early indicators of possible future trends or “signals.” For example, specialty retailers selling goods not available elsewhere in a given community, like hobby shops or specialty booksellers, might have noticed that fewer customers were coming to their brick-and-mortar locations in the early 2000s.

The next step is to determine what is driving the change. To stick with the analogy, the drivers might have been changes in consumers’ interests (the shift in people’s interest from collectibles to video games), the advent of competing superstores, the rise of online shopping or even a combination of these three and others.

Finally, imagine a possible future state, or scenario, that could arise from these shifting dynamics. From the trends in the previous paragraph, the scenario that was realized 15 years later in the form of Amazon was that customers were using their mobile phones to order any physical good they could imagine and have it delivered to their doors within 48 hours.

Planning for 2030 

To help plan for the possible scenarios of the financial industry’s future, MDC worked with the Institute for the Future, Palo Alto, California, to develop a set of plausible scenarios for our industry that show us the kind of world credit unions may be operating in by 2030. 

The four scenarios produced considered input from IFTF’s consortium of futurists, experts within the credit union industry from MDC’s ownership, and additional third-party experts. The futures they describe consider the impact of new technologies, potential economic changes, shifts in social norms and more. In addition, each scenario is paired with a set of signals and indicators to help determine which situations may be developing in real time as we proceed through the next decade. Now MDC credit unions can use these scenarios (in video and written form), along with a workbook of tools created by IFTF, in their planning processes for years to come. 

Armed with these powerful tools, MDC is forming signals-tracking teams from among subject-matter experts within its ownership. These trackers will meet regularly to keep tabs on the established signals, refine them further and develop new signals as our future evolves and the horizons become less hazy. Through this cooperative effort, our network of credit unions will now be able to work together off a common playbook, collaborating over time to refine the scenarios we’ve developed and leading the way for credit unions through 2030 and beyond.

Identifying Shifting Trends

Every credit union can use these same ideas to create better, more proactive strategic plans and to become more adaptive when indicators show that a change in planning is needed. Or, better yet, they can work together to form their own industry-wide signals-tracking teams to pay attention to indicators and identify the primary cause of possible future shifts.

Here at MDC, our signals teams will be paying attention to both these large shifts and looking for smaller clues to help us learn in which direction they may be moving.

Some of the key drivers of change explored throughout our scenarios include:

• Maturation of millennials as the primary labor source and main consumers within the economy
• Availability of more “big data” on consumers from non-traditional sources
• Trends in wealth inequality
• Disruptions caused by fintechs and their long-term effects on the consumer finance industry
• Changes in attitudes towards America’s institutions (banks, media, government, etc.)
• Growth in the field of predictive analytics

Using the insights from these signal trackers across our network will ensure MDC credit unions keep up with changes and implement new ways of doing business with a focus on continued relevancy. We are also developing a set of tools to help them properly gauge the plausibility of changes, as well as to evaluate how to smoothly transition from current procedures to the way they will need to do things in the future to remain successful.

Cooperating for Progress

Cooperation and collaboration are written into credit unions’ very charters. Through networks like MDC and other collective efforts, credit unions can combine resources to fund ambitious projects. By working together and sharing funds, time and expertise, credit unions can be as successful as they choose to be. At MDC, we encourage all credit unions to draw their focus to the rapidly oncoming future, and work together to ensure our industry thrives well into the exciting times ahead.

Jeff Kline is CEO for MEMBERS Development Company, an interactive network of industry leaders serving as a catalyst to accelerate growth in the credit union industry by identifying and connecting disruptors in financial services. MDC’s owners pool resources to enable relevant research, develop innovative products and services, create valuable vendor relationships, share knowledge, provide economies of scale, and keep a consistent focus on the horizon.