Podcast ¦ Talking Credit Unions: Edition 38 Outcome-driven innovation in credit unions

Key Take Aways

• Digital transformation in credit unions is gaining momentum in the UK and Ireland, driven by the need for innovation and improved member services.
• Organisational success in technology adoption requires a strong emphasis on outcomes-focused initiatives, particularly in managing change effectively.
• Building a culture of innovation involves leadership that promotes agility, safe experimentation, and rapid learning from failures.
• Leadership should enable teams to act with autonomy (“speed boats”) and provide “air cover” to foster a safe environment for innovation.
• A clear vision of what ‘good’ looks like in one year helps align teams and guides strategic decision-making.
• Embracing the concept of ‘strong views, weakly held’ facilitates healthy debate and dynamic prioritisation within innovation processes.
• Pragmatic use of technology—focusing on problem-solving rather than technology for its own sake—is key for effective innovation.
• Regulatory environments do not necessarily impede innovation; rather, understanding and working within regulatory bounds can enable responsible advancement.
• Incremental, low-risk testing with minimal impact allows credit unions to experiment with new solutions and build confidence over time.
• Cross-sector collaborations, including partnerships with fintechs, present significant opportunities for mutual growth and innovation in credit unions.
• Emphasising the importance of meeting members where they are is crucial for relevance, whether members are tech-savvy or traditional users.
• A mindset that views failure as part of learning—embracing trial and error—is vital for building organisational resilience in innovation efforts.

Key Statistics

• Success rates of AI adoption are reportedly only about 5%, linked to a lack of outcome orientation.
• Within a large organisation, 47 concurrent technology and regulatory projects were identified as a cause of change fatigue, highlighting the need for prioritisation.
• Approximately 6 million users on Monzo, exemplifying significant scale achieved through iterative, trial and error approaches.

Key Discussion Points

• The importance of outcome-oriented success metrics in driving technological and innovative change.
• Cultivating an innovation culture through leadership that encourages safe experimentation and accepts failure as part of growth.
• Practical approaches to embedding risk management into innovation, including breaking down impact and probability, and categorising risks as good or bad.
• The role of leadership clarity, including the “red wine test,” in ensuring everyone aligned on strategic goals.
• Avoiding the trap of solutions for technology’s sake; starting with member needs and problems as a foundation for innovation.
• The value of small, incremental trials in reducing risk and building team confidence in new initiatives.
• Adapting to rapid change, especially for credit unions, by simplifying decision-making processes and shortening feedback loops.
• The potential for the credit union sector to serve as a testbed for fintech innovation due to close decision-maker alignment and community focus.
• How collaboration among credit unions and with third-party providers can amplify collective buying power and technological capabilities.
• The regulatory landscape is adaptable; regulators are proactively removing barriers and supporting responsible innovation.
• Necessity of leadership that actively communicates purpose, leverages incentives, and manages organisational change with strong governance.
• The importance of fostering partnerships with fintechs to embed innovative solutions and deepen community impact.

Podcast Description

This podcast explores the evolving role of innovation within the credit union sector, emphasising the importance of leadership, culture, and collaboration. Featuring insights from fintech professionals and examples from recent conferences, it highlights strategies for embedding change, managing risk, and leveraging technology responsibly. The discussion focuses on practical steps for credit unions to thrive in a competitive, digitally driven environment, including the significance of meeting members where they are, testing ideas incrementally, and building resilient, outcome-oriented organisations. It aims to inspire credit union leaders to capitalise on the sector’s unique opportunities for innovation and community impact.