Changes keep on coming at State Employees’ Credit Union, the $50 billion institution whose board hired a new CEO from Maryland two years ago with a mandate to shift some key strategies.
This week, the Raleigh-based credit union said it hired NCR to “modernize the digital banking experience” for the 2.7 million-member organization. The Atlanta-based company works with more than 600 financial institutions on digital stuff. It plans to focus on “enhanced account management, financial fitness, payment and security measures,” according to a press release.
SECU said the contract value is confidential and it won’t affect employment. The credit union hasn’t hired NCR previously.
The credit union historically has mostly relied on its own technology staff, which tops 500 people, to operate and improve its digital platform. That strategy kept costs down as the credit union showed consistent growth for decades, becoming the second-largest U.S. credit union.
CEO Jim Hayes, who was hired in mid-2021, has criticized SECU’s underlying computer system as outdated. “As our members’ needs evolve, we want to provide servicing options that offer more seamless, personalized experiences from the branch to the ATM to a mobile device,” he said in the release.
The credit union spent about $30 million on professional and outside services last year, compared with about $16 million in 2021. Net income totaled $626 million in 2022, compared with $557 million a year earlier.
More than a third of surveyed SECU members have said the institution could do more to improve its online and mobile platforms, says Josh Bomba, chief information technology officer.
Hiring NCR joins a variety of other changes kicked off recently by SECU:
- Its first statewide television advertising campaign.
- Use of credit scores to enable risk-based lending, which provides better terms to those with stronger financial histories. SECU historically levied the same loan rates to all members.
- Preparing to make small-business loans, mainly to existing credit union members.
- Elimination of its tax-preparation service, which served 100,000 members but disrupted some branch workers from other duties.
- Hire an “election facilitator” to allow for online voting for directors. Previously, voting was mostly restricted to attendees of the annual meeting held in Greensboro every October.
These and other changes have received steady criticism from Jim Blaine, who was SECIU’s CEO from 1979-2016. In a blog that he says attracted more than 250,000 page views in its first month, Blaine has issued nearly daily commentary urging SECU members to oppose the changes by contacting the group’s board.
SECU wants more members to vote in its director elections, including those who can’t attend the meeting in person, which is why it hired a facilitator for the first time, Chief Operating Officer Leigh Brady says. The credit union hasn’t had a nominee from outside of those picked by its nominating committee in more than a decade, she says.
That may change this year because of Blaine’s activism, with a potential slate of dissident candidates. Publicly traded companies often hire election facilitators when facing opposition.
Blaine is also harshly critical of House Bill 410, which proposes changes in regulation of state-chartered credit unions. SECU favors the bill, Brady says, with backers contending its main purpose is to promote credit union expansions in the state’s rural areas, where commercial banks have closed many offices over the past decade.
Blaine and N.C. Bankers Association President Peter Gwaltney say the bill is a major rewrite that will enable credit unions to add members without traditional common bonds and promote more business lending. Blaine says the bill will prompt many members of small N.C. credit unions to opt for the more-convenient SECU, which operates offices in every N.C. county. Both doubt whether credit unions will add offices in the rural areas, which they say remain well served by for-profit lenders.
Brady says SECU has no desire to harm its smaller peers, adding that the organization isn’t set up to support an “open field of membership.”
After passage by the House, the bill is pending in the Senate.