Bringing Vendors Together to Drive Credit Union Success
With credit unions managing an average of 182 vendors per week, ensuring alignment between all partners can be a daunting task. But what if getting all your vendors in the same room could unlock new opportunities for strategic growth?
In this episode of Grow Your Credit Union, Joshua Barclay and guest co-host Mike McWethy, EVP of Texans Credit Union welcome on Tansley Stearns, President and CEO of Community Financial Credit Union to talk about the value of getting all vendors into one room to align on strategy.
Plus:
Are credit union boards equipped to meet strategic goals, and how should board recruitment be reimagined?
What challenges do credit unions face with member onboarding, and how can they improve the process?
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FULL TRANSCRIPT
Intro
Joshua Barclay: Hello, credit union community. Here are your topics for today's show. First, we'll tackle the headache of managing hundreds of vendors and show you how to get them all aligned with one clear strategic goal. Next, we're breaking down how to rethink your board member recruitment process to ensure you're building the most skilled and visionary boardroom.
And finally, we're talking about a major pain point: member onboarding. We'll break down why it's failing at so many credit unions and what you can do to turn it around.
Welcome to Grow Your Credit Union. This is the podcast where credit union leaders gather, learn, and grow. I am your host, Joshua Barclay, and today I'm joined by a special guest co-host. It's his third time on the show — I'm talking about the EVP at Texan's Credit Union, my man, Mike McWethy. Mike, welcome back.
Mike McWethy: Howdy, y'all. I am excited to be here. Thanks for having me back.
Joshua Barclay: Great to have you back, Mike. Before we begin today's show, I want to first mention our fantastic sponsor, Investify. They are the only self-directed investing platform that allows members to buy, sell, and trade directly from their checking account within their online banking portal. I'll be talking more about Investify later in the show.
Mike, I want to start things off. I just came back from a family reunion. I was in Illinois with my cousins playing basketball, and something dawned on me: I'm getting old. I'm a 38-year-old man, and I can't do what I used to be able to do on the court. I was a high school basketball player in Connecticut, pretty decent player.
My cousins put on some hip hop. I got really pumped up. In my head, I thought I could still do all the things that I used to be able to do. And it turns out, Mike, that it was pretty ugly out there. Curious to know, did you play sports growing up? What sports did you play?
Mike McWethy: I played baseball and football. You gotta play football in Texas — it's a requirement. But yeah, I hear you, man. I can't play any sport the way I used to. I was just in your neck of the woods, hiking in Utah, and I think the elevation got higher because for some reason, I was out of breath much sooner than I used to be. So I feel ya.
Joshua Barclay: Yeah, I don’t even want to go there. I'm gonna exit out of this conversation, but I want to let my cousins know one thing: Morgan, Carter, I used to be better than you guys.
Alright, let's kick off the show. Our guest today is the president and CEO of Community Financial Credit Union, Tansley Stearns. Welcome to Grow Your Credit Union.
Tansley Stearns: Thank you so much for having me. It's such an honor to speak with y'all.
Segment 1
Joshua Barclay: Vendor relationships — you've got plenty of them, whether you love them or not. In fact, the average organization has 182 vendors connecting to its system every week, according to vendor.com. The challenge? Getting all those vendors aligned to meet your strategic goals.
Tansley, you took your vendor management to an entirely new level. You got all of your vendors in one room and aligned strategies, laying out the tech roadmap. Could you tell us, once you had all your vendors in one room, how did you conduct that meeting?
Tansley Stearns: So first of all, I really think this is an important idea, and I want to give credit where credit’s due, which is Mike Valentine from BCU. He was the first person I knew of doing this, and I actually heard this idea from Chuck Fagan at Valera. He and I were talking about how important our partners are — that’s the way we like to talk about the partners we work with.
We use that language very purposely because it isn’t just about a transaction for us. It’s really about how we build a long-term relationship with those that are in service to our members.
When I had this dream of becoming a credit union CEO over 20 years ago, one of the commitments I made to myself as I observed these partnerships over time was to ensure that they weren’t getting in the way of delivering the experience we provide to members.
We know we can’t do this work on our own. It’s done better in partnership, and that takes alignment because there are so many of them. So the idea here was that we invited a host of these vendors to come together. We got together and shared very openly our strategy — we actually put it on a napkin because we believe that creating strategy is complicated, but communicating it should be simple.
Our leadership team was there to share what we were up to, and then George Hofheimer facilitated a conversation with us and those partners to understand where we're headed and how they might come together.
We synthesized that information, and we’re actually planning to do another session next year with another credit union, so there will be even more collaboration. We’re really thrilled about the outcome of that. It’s not just about this one moment in time, it’s about how we build on that from that first session, and I’m really excited to see where it leads.
Joshua Barclay: Mike, I don’t know if you’ve brought all your vendors into one room, which is very cool, but talk to me about managing vendors because credit unions — it’s a game of either you build it or you buy it. Credit unions aren’t doing a ton of building, and that’s no disrespect to credit unions; they’re doing a lot of buying. So how are you managing your vendor relationships at Texas Credit Union?
Mike McWethy: Yeah, it’s unimaginable to consider doing that with so many vendors, but I have heard of credit unions doing it, and I definitely applaud that — especially if you have the right vendor that wants to modify their mode of operation in order to help your organization with what you need.
So I think interpersonal relationships with them are critical, and I definitely applaud that strategy. Even I’ve learned from mistakes in the past — you have vendors that will tell you one thing, and then you come to find out their operations do not align with the way you want to present an experience to your member.
It’s really hard to try and understand whether or not that organization, both philosophically and from a capacity standpoint, can fulfill what they’re selling you. So we have tried to take extra time in understanding and getting to know each of our relationships at a deeper level, especially our critical vendor relationships, and understanding their roadmaps.
A lot of times, we try to volunteer different leaders to be on different advisory boards or at least be involved as much as possible for some of our strategic relationships. Just trying to find a way to dialogue more, make sure that we send people to each of the vendor shows or conferences that they have, and develop core relationships with those vendors that are critical to us.
Then, we slow down and take extra time to understand the roadmap for each vendor relationship we’re considering. That hasn’t been perfect; we’ve had many flaws over the years, but we’ve realized we have to take it much more seriously than we did in the past.
Joshua Barclay: A previous guest on the show, Dan Daggett, said one of the critical mistakes we make in this industry is getting too buddy-buddy with vendors, where it becomes more of a personal relationship. Then we ignore the fact that, from a professional standpoint, these vendors are not performing the way they should.
So, Tansley, I’m wondering how you hold your vendors responsible?
Tansley Stearns: I see this a little differently. I think two things can be true at once. I’m a believer that these are partnerships, and that is founded on trust, shared values, and building a connection — and that matters. I don’t think that precludes us from ensuring that there’s responsibility and accountability.
I think that relationship can actually allow for harder conversations. So for us, it’s about understanding the boundaries, parameters, and expectations.
For example, when we think about it — it’s been not quite a year since we’ve gone to Lumen as our digital banking provider. That transition was exceptionally smooth. We talked a lot about our expectations as we made that transition to ensure there’s a roadmap, that they’re pushing us to continue iterating and evolving our technology, that there’s a relationship with two-way conversations, and that we stay connected throughout the relationship.
I think having ownership internally, so that we understand who our senior leaders are that own those important partnerships, and addressing problems early and often, are crucial.
Having that relationship can be foundational for ensuring accountability is carried forward.
Joshua Barclay: One of the things Becky Reed, our common co-host, has talked about is ROI. She feels that vendors should be a little more forthright about the ROI they’re providing for a credit union.
I could see the flip side of that — someone saying, "Yeah, but if you’re a credit union, you should probably know what that ROI is yourself."
Tansley, just to close this segment out, do you think vendors should be more forthright with reporting on the value they are delivering to your credit union?
Tansley Stearns: I don’t see our partners being secretive about their performance metrics. I think we’re pretty clear about what matters to them. Again, I would agree with you that it’s most important we understand what’s going to drive value for our members — that’s the thing I can hold us accountable for.
I don’t think it’s my responsibility to understand what their business drivers are, necessarily. Although, again, with good partnerships, having clarity and transparency around that is certainly helpful.
At the end of the day, what we’re responsible for is ensuring value back to our members. I think most of our partners know that is also important to them because they will be more successful if we are more successful.
Segment 2
Joshua Barclay: A hot topic that keeps coming up on the show over and over again: are credit union board members really qualified to meet the strategic goals of the credit unions they serve?
Tansley, you said, and I quote, “The way we recruit board members needs to be reimagined.” What did you mean by that?
Tansley Stearns: It’s really common to hear credit union leaders and board members say, “It’s impossible to get volunteers. Nobody’s going to want to do that.”
During my time at Filene, I had the opportunity to spend a lot of time in credit union boardrooms. There was a lot of interest around how to attract the next generation of board members, and the common thing I heard was, “That next generation has a very busy life. They’re not going to want to commit the time.”
I think we have to reimagine the way we invite people to be part of our organizations.
I have talked for a long time about the fact that I think we need to tell our story to get more members, drive growth, and ensure we are no longer the best-kept secret in North America.
The same is true when you think about recruiting board members.
We recently brought on four new board members — one was a boomerang, and three were newer to the organization. When we talked to them about why they were interested in service, it was about the interesting things we’re doing. They learned about that through our storytelling and the thought leadership we are providing to our communities.
I think we must take storytelling seriously — it has true value.
We often think about marketing and storytelling as a nice-to-have, especially during tough economic times, when it’s the first thing to cut. But I really want to invite us to think about storytelling as a true business driver. The way we can position the work of credit unions is so important, so well-aligned with the next generation.
When you think about people growing their careers, who are interested in service to their communities — credit unions' values are closely aligned.
If they know what we’re up to and see that value, I think many more people will be interested in raising their hands than you might guess.
Joshua Barclay: Mike, my very first event in the credit union space, I was listening to some vendors at their booth, and they said, “It’s an off day today. It’s all board members.”
And I thought to myself, wait a minute — what do you mean an off day? Isn’t this a good thing? It’s all board members.
Then they proceeded to tell me, “Nah, they just come and take swag. They’re not interested in the tech. They don’t really care. We’re going to tune out for the day.”
And it made me think, wow, are boards this disengaged from what’s happening on the ground floor?
So, Mike, when you talk about recruitment for the board, is that something you’re actively doing right now? How do we get the right people in the right seats in these boardrooms?
Mike McWethy: Yeah, the volunteer board makeup is a superpower — something we’re proud of, but it can also be an Achilles heel in some ways, right?
There’s some truth, but it depends on the organization. I’ve definitely had board members fall asleep while I’m talking. I couldn’t imagine it had anything to do with the excitement of my presentation, but there are board members — I’ve seen it all. From those who are literally too elderly to hear or understand what’s happening but won’t leave the board, to the far extreme where they’re micromanaging what’s happening in the branch.
It’s the full spectrum. I can’t paint all of them with the same broad brush.
For us, we’ve taken it seriously and come to the conclusion — or at least our board has — that in many cases in the credit union industry, the board is charged with being a representation of the membership. But if the average age of your membership is 50 years old and has an average credit score, the board makeup is often not that. The average age is typically much higher, with a different socioeconomic status.
There are a lot of differences. I think it’s helpful if a board comes to that conclusion and decides to act on it.
One thing our board has done is really try to recruit younger individuals. Many of them have been involved with larger organizations that have upcoming or younger executive programs. We try to recruit those individuals through one-off conversations and help them tell the story, as Tansley said, and it’s worked.
We have an advisory board member that is under 30 years old. He is constantly guiding us on things that resonate with him, like our mobile app and marketing channels. His insights help guide the board, and many times, it sparks a productive dialogue. Once you start down that road, it becomes clear the value proposition they can bring.
Joshua Barclay: I want to double-click on something you said about age. This isn’t about ageism — I’ve mentioned this on other shows — but just diversity, whether it’s race, gender, or age/
Tansley, how important is it to start getting board members that are more varied and diverse for more diversity of thought right now?
The content I see most often shared in the credit union space revolves around reaching younger membership.
You said “Achilles heel,” Mike, but reaching younger members... I forget the average age of credit union members, but it’s not young. So, Tansley, how important is it to start getting younger, more diverse boards in place?
Tansley Stearns: It’s really interesting. We sponsor one of Filene’s Centers of Excellence on Leadership and Governance, and they have a lot of good research on this topic. One of the things our board is using is thinking about a matrixed approach to talent on the board.
It’s very important to have board members with strong financial acumen. But when you think about belonging on a board and within the organization — which I believe starts with the board — it’s about bringing diverse perspectives, representing not only the members you serve today but also potential members you may serve in the future.
How do you help a complex organization from a governing perspective?
I think considering the backgrounds of people with human capital experience, those who understand the demographics you serve today, and the challenges in your communities, is crucial.
Thinking about diversity beyond just what’s visible, but holistically in the boardroom, what do you really need?
Understanding what people bring today and what you want to attract can help you think about recruiting and succession planning.
The NCUA is paying close attention to this now. We know it’s important internally, and it’s just as important for the board as well.
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Segment 3
Joshua Barclay: To onboard or not to onboard? That’s not really a question. Everyone would agree that member onboarding should be table stakes in 2024, and yet the statistics on this are gruesome. According to The Financial Brand’s Digital Banking Report, a shocking 45% of banks and credit unions do not have a formal onboarding program in place.
Mike, I’m going to start this segment off with you. What challenges are you facing when it comes to onboarding members post-account opening?
Mike McWethy: There are a lot of studies out there with some appalling information about the industry when it comes to onboarding a member, like how active they are, their profitability over time, or how sticky the relationship is. Reading some of those studies prompted us to do a deeper dive into what we were experiencing, and it was jolting to see the percentage of memberships that opened their account online, only to still have an account 90 days later.
I would have assumed it would be 100%, but that’s not the case. When you start talking about it costing $200 or $300 on average to acquire a new membership, and then you realize many abandon the account after a year — it becomes painful to look at.
For us, we can't just be upset about it — we have to do something. So, we’ve partnered with a lot of different vendors to create experiences for onboarding faster. You have their attention right at that moment, so what is that onboarding process? How many products can you make them aware of, without shoving them down their throat? And how do you simplify that process to help them self-educate and acquire those products if they're interested?
We’ve also leaned into trying to humanize the experience. We’ve created a department full of relationship advisors whose only job is to call on new members to teach them. Basically, they put a human voice and face to the relationship, especially for those who open their accounts online, and help them understand that we are a group of individuals who care about them.
It's early on, but the numbers are proving to be effective. Those individuals who get a call to walk through what we're about and how we might help them are much stickier. They’re not closing their accounts, they have more products, they apply for more products, and they give us some insights.
It’s really going well. Early indicators are it’s effective. We’ll need to do more, but that’s one thing we’ve done.
Joshua Barclay: Yeah. One thing that I’m shocked about — I’m not going to call my credit union out, I love them — but there was no onboarding. In fact, I’m actually quite shocked at how little communication there was with me after I started the relationship.
Tansley, can you please help me understand why this is so challenging? Because, to me, someone from the outside might think, “How hard can this be, to just maintain the relationship and tell me what you have to offer?”
Tansley Stearns: I think some of this comes down to the way we think about our work, and it starts even before onboarding. When I started here at Community Financial, we had over 50 student-run branches across the state of Michigan. It’s one of the reasons I came here. I was so enthusiastic to meet the superintendents, and one of the things our team members asked me before I went in was, “Please, whatever you do, just make sure you don’t tell them that we’re ever going to sell anything to the students because they will hate that, and they won’t want us to come back.”
What was so interesting to me in those conversations was that every one of those superintendents — first of all, they’re educators, so they were thrilled about us coming in. The state of Michigan has made a commitment to financial literacy, so they love the partnership.
And every single one of them said to me, “Tansley, we know these kids will learn better if they’re actually using a product or service. You’re making a commitment to us, so of course, we expect you to talk about your products and services.”
We were the first credit union to partner with Greenlight. Now, we have not just financial literacy, because knowledge matters — but we all know knowledge doesn’t necessarily translate to behavior change. What really works is the marriage of those two.
So, to your question, part of the issue is that we’re so humble as an industry. We’re such good people and we don’t ever want to make anybody mad, and I think sometimes that leads to behaviors that aren’t in the best interest of our members. Because I think your story is so relevant — people do want to know what we offer.
Another thing I’d add is that it starts even before onboarding. When I started here, it took about an hour to open a new member account, less than a year ago. We’ve been doing a much better job of telling our story and letting the world know how we can help them. Now you get someone interested, and then it takes an hour to open that account? You’re going to have a real challenge with onboarding because they’re just wanting to go, right? That’s a long time.
So, we partnered with Mantel, and now it takes five minutes to open that new member account. I think that gives you a better chance with onboarding, because you’ve told a great story, you’ve got someone interested, and there’s a value proposition.
I think one of the gaps in our service space is that the way people see us still has room for improvement. When you ask people what they think of a credit union or what they offer, they often say we’re not as technologically advanced. So, if you can make that first experience include strong technology, you’ve got a better shot with onboarding.
Joshua Barclay: I really love what you just said about how you shortened the account-opening process because it’s true. I know cross-selling is a dirty word — we talked about that in a previous episode. I don’t know what you want to call it for the sake of this conversation, but if I call the contact center and I have an issue, and it takes that individual 40 minutes to resolve my issue, I don’t want to hear about any expansion of products or services.
But as you mentioned, if you can get me through these steps faster, I’m all ears to whatever you recommend.
I have a follow-up question for you, Tansley, which is: does this onboarding problem have a little bit to do with credit unions’ distaste for selling and the word “sales,” or does that have nothing to do with this?
Tansley Stearns: I don’t know that I can comment on other credit unions, but for us, what we know to be true is that the products and services we have and the way we approach membership provide value. I know for sure we are the very best choice for consumers — credit unions just are.
Financial cooperatives were designed to be a better option. So, when we offer something to a member that they need, we are improving their financial situation and helping them achieve their dreams. I never want us to be shy about that, and we work really hard to make sure we share that story.
Joshua Barclay: Mike, anything else you want to add about onboarding?
Mike McWethy: The speed matters, right? Consumers' expectations are set by fintechs and big banks. I got my cool Apple credit card with four clicks on my phone — that’s consumer expectation.
So, if we’re touting that we have the best value or relationship, we’ve got to partner with different vendors or fintechs to make sure we’re onboarding members quickly and effectively.
Everybody’s busy, and after you lose that moment, they’re not likely to circle back. They’re not going to look at your emails, they’re not going to answer the phone — you have that moment in time to start a new relationship, and that impression matters.
So, I hope the credit union industry really starts advancing in this one particular avenue. I think it’ll be really beneficial for the industry.
Closing
Joshua Barclay: That brings us to the end of the show. Tansley, I want to start with you. Any final thoughts about anything we discussed today?
Tansley Stearns: I think the theme across all these topics is opportunity, and I see so much of it for credit unions. We’re in a unique economic time. No matter what you believe politically, you’re hearing all kinds of politicians talk about how expensive it is for people to live right now. And guess what? Credit unions are a solution to that problem.
My ask of anyone listening is this: please tell our story, shout it from the rooftops, and be a little less humble. Because financial cooperatives can answer the questions everyday Americans have. And if we can help people find their dreams, we can change the world.
Joshua Barclay: Love it. And if anyone’s listening and thinking, “Wow, Tansley is dropping hot fire on the mic — I want to get in touch with her,” what’s the best way for someone to reach you?
Tansley Stearns: You can find me on LinkedIn — Tansley Stearns, president and CEO of Community Financial. Thrilled to connect with you, and it’s an honor to share a bit of our story today.
Joshua Barclay: Mike, what are your final thoughts on our conversation today?
Mike McWethy: I loved it. I’d say my favorite part was when Tansley, who lives up in Michigan, said “y’all” at the beginning of the podcast. Me being from Texas, I knew we were starting off with a great relationship right there.
But in all seriousness, I really do believe the credit union industry will benefit from some of the initiatives we talked about. We have a lot of needs — from board members to vendor management to the technologies we use — and we all need to make a concerted effort to improve and accelerate those functions.
Joshua Barclay: And how can listeners get ahold of you, Mike?
Mike McWethy: Mike underscore McWethy at texanscu.org.
Joshua Barclay: Awesome. I want to thank Tansley, I want to thank you, Mike, and I want to thank our sponsor, Investify. And I want to give a special thanks to our listeners for continuing to support and listen to another episode of Grow Your Credit Union.
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Thank you for listening, and we’ll see you next time. Take care. Bye-bye.