NAFCU Panel Report

Recently, our CEO Chris Sachse was invited to sit on a panel for the National Association of Federally-Insured Credit Unions (NAFCU) and discuss how credit unions can talk to their boards about the cloud. He was joined by Mark Schwartz, enterprise strategist for Amazon Web Services (AWS), and Mark Schuiling, CTO of Wildfire Credit Union. 

Although the COVID-19 pandemic accelerated the need for credit unions to adopt secure cloud strategies, the credit union industry still lags behind fintech organizations and big banks in digital transformation.

Attendees confirmed this in a poll that revealed just 13 percent had a digital transformation plan in place, 40 percent weren’t sure of their digital transformation strategy, and 20 percent were still in the discovery phase. 

According to Schuiling, Wildfire Credit Union’s digital transformation journey is ongoing and will be for several years to come. The organization is working to become a more digital-first credit union with cutting-edge technology that will make it more agile.

He shared, “We want a more customer-centric model that focuses completely on the member and their ability to utilize all the digital services available to serve them. Since our move to the cloud, we are now able to provide [what] members want when they want as efficiently as possible.”

The cloud provides an opportunity for the IT team to focus more on member service innovation and less on maintaining archaic hardware or building new hardware to support the next innovative idea. 

Top 3 Benefits of the Cloud

When asked for 3 reasons credit unions should be in the cloud, Sachse shared:

1. Flexibility

There is no way to know what tech will exist in the future or what members will want, but the cloud allows organizations to be flexible and adapt to ever-changing technology needs without significant, costly hardware overhauls. 

2. Robustness

Based on the size of most credit unions—both monetarily and by user count—the level of IT complexity is far greater than other industries and requires a more robust infrastructure.

3. Resiliency

We are faced with challenges every day that are out of our control—hurricanes, wildfires, snowstorms, pandemics—and credit unions must be able to respond to these events. 

Top 3 Objections to the Cloud 

Unfortunately, credit union leadership and boards of directors are hesitant to embrace a cloud-supported digital transformation strategy, primarily due to misconceptions and lack of education. 

Sachse shared the top 3 objections to the cloud:

1. Security and Compliance

Most leaders do not understand what the cloud is and don’t realize their member data is already in the cloud through third-party vendors. Organizations need education on the shared security model, which gives them control over the data in the cloud.

Schwartz shared, “Organizations actually have more control in the cloud with capabilities to drive transparency, from automated policy enforcement and auditing to permission controls to protect data and privacy. There are large organizations in the cloud—such as the CIA, Department of Homeland Security, large banks, and healthcare organizations with robust security requirements—and all organizations benefit from their application.”

Schuiling adds, “The cloud allows you to look at the data and know how it's being stored and secured, and ways to mitigate potential risk. You can develop risk profiles and controls and determine if you might need encryption or limited access in certain areas. The depth of details available can offer comfort to boards and leadership.” 

2. Staffing

A big concern for many organizations is having the right staff in place. Many existing IT staff members may not fully understand how to work in the cloud, whereas vendor partners can identify training resources and support your organization throughout its journey. 

3. Costs

Costs can vary based on the utilization of the cloud platform. A partner can ensure your organization is taking advantage of all the capabilities offered to maximize your investment. More importantly, the cloud allows organizations to scale up and down as needed. 

According to Schuiling, “The cloud provides a flexible infrastructure, so if you miss targets for right-sizing, you can scale up or down.”

Schwartz adds, “New things are always risky, and you never know how members will respond. But the cloud is agile, allowing organizations to work incrementally to see how an innovation works, get feedback, and alter the course if needed.”

With education, due diligence, and a strong partner, credit unions can be confident in driving their digital transformation to provide members with innovative and secure experiences. 

For more information about digital transformation, cloud adoption, and cybersecurity, download our Typewriter Transformation Case Study.