Southbridge Credit Union CEO wants to expand members' horizons
April 3, 2017
SHOP TALK
Southbridge credit union wants to expand members' horizons
PHOTO/BRAD KANE
Kate Alexander President & CEO
Southbridge Credit Union
In May, Kate Alexander began working at Southbridge Credit Union, after getting laid off from Framingham office supply retailer Staples. By the end of the year, she had taken over the CEO's role and was promoted to the position permanently in March. As part of her desire to create a more sustainable, community-centric organization – increasing its $175 million in assets currently under management – she is ramping up efforts to provide more services to the credit union's members.
What is your immediate goal as CEO?
One of the short-term goals we have is to become our members' primary financial institution. What we have noticed is we have a piece of the relationship, and our desire is to have the whole relationship.
Whether we are the top-of-wallet debit card, if they have a need for a new car, or if they are having a baby and want to open up a savings account, we want to be there for every milestone. We want them to think of us first, not just the place where they got their first savings account back with their parents in the 1970s. We want everybody to know we have big-bank capabilities at a small credit union.
How many members only use Southbridge for one service?
About 40 percent of our members have just a savings account with us, and of those, the predominant number have balances under $25. The math on that isn't good. We need to make sure we have more than a savings relationship with them.
We are looking to become their primary financial institution, and that is both with deposit products and loans.
Why does the math on account-only members need to improve?
It is actually expensive to manage accounts, so we are not offsetting our own expenses by just maintaining a savings account for them.
What products provide better margins for the credit union?
Higher margin products include loans, because we earn interest on our loans.
If you are at 40 percent now, where would you like to be?
Realistically, I would like to get that number down to 10 percent.
What are your other goals?
The other short-term goal is to make sure we are acquiring new members, meaning people new to this area, whether it is Sturbridge, Charlton, Auburn, Southbridge. These communities are growing with folks moving in, and we want to acquire them into our membership base to sustain our growth.
What are the benefits of being a smaller credit union?
What I like about small banking, in particular, is you can kind of get your hands into everything: events, marketing, analytics, the management of fees and new products. You get to know your customers – or in our case at the credit union, our members – where at a large bank or large corporation, you don't get that chance.
You see the people out in the community, and you don't ever really shut down. I can be on the soccer field or the basketball court and still have on my banker hat. You have a continuous tie to the community.
Why did you become CEO?
When I started here, I knew there were some things I could do to make a difference from a cultural perspective, from marketing, to bringing in new products and services. I represented a demographic the credit union wasn't necessarily in touch with – the working mom, the young family – so I knew I could offer advice on attracting and retaining members.
What changes needed to be made?
Updating products and services, branding, a new go-to market strategy, cultural changes to make sure we are member-centric instead of being worried about balancing the needs of compliance and finance.
How do you stay true to the credit union's legacy?
We were founded by community members. We are owned by our members, so the money they invest here gets redistributed throughout the community. That is the part we want to stay true to; we want to be core to this community. If this community is going through troubled times, we want to make sure we are attentive to the needs of the residents and the businesses. There is still part of the population that is underbanked, and those are small businesses with unique needs and consumers who need personalized services.
This interview was conducted and edited for length and clarity by Brad Kane, WBJ editor.
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