Buy the Cow, OR Just the Milk!

by Ron Daly 

Let's pretend for just a moment that you run a credit union (and you might). Your credit union can offer checking and savings and loans, but has no online banking, no student lending program, and a weak collection strategy. "Just doing" these programs isn't in the cards, given your membership size and available capital, but doing without them will surely cost you future members and won't let you compete with the mega-bank down the street. What do you do? 

If "use a CUSO" didn't cross your mind, you're sadly not alone. 

In a recent article from CU Journal, Tom Davis, CEO of the National Association of CUSOs (NACUSO), expressed his frustration with credit unions' unwillingness to invest in CUSOs. 

From the article: 

"Why think about joining a multi-owned CUSO in the first place?" Davis asked rhetorically. "Because it will help sustain the credit union. It will drive value to the credit union's members. It spreads risk among multiple credit unions. It adds expertise. We need to point out the advantages, specifically driving value back to the members, which is why we are here. Putting my NACUSO hat on, that is what we are all about...we provide applied learning experiences on the value of collaboration."

Tom has some great reasons for investing in a CUSO and collaboration. The article is worth the read. But here's a question that hasn't been asked yet, and I'm going to be bold and put this out there: 

Why not just BUY from a CUSO? 

I can appreciate why a credit union would buy into a CUSO so they'd have a stake in its success, add value to the CU, and obtain owner pricing. But if what you need is a service and what that CUSO is providing is the exact service you need, just buy the product from the CUSO! You don't always need to invest in the CUSO to become a part of it, you just need to use their products and services. 

I put my CUSO (DigitalMailer) out there as an example. We're the 2nd largest eStatement provider in the industry, our email engine is designed to help you maximize your online marketing ROI, and we're used by 180 credit unions nationwide. When it's down to two, if you have the choice between an industry outsider or someone with ten years experience in financial services, why choose the former? 

 Put simply: When it comes to CUSOs, you can buy the cow and get the milk or you can just buy the milk. All things being equal, when considering a vendor, we encourage you to buy CUSO. 

As always, your comments are appreciated. 

Comments

[David Deckelmann]

I would second your comments Ron, but I am frankly surprised, by some of the resistance we get from our industry when starting new CUSOs. Change is difficult for some and established relationships are hard to break even if you have better pricing etc. It has happened to us more than a few times, where our CUSO services are a better price, and with faster turn around times, but we are relatively unknown and so are not able to get the business. Even being 100% credit union owned does not make the change easy for some.