“On Tuesday May 11 in San Francisco, FinovateSpring 2010 showcased the most cutting-edge financial and banking technology innovations to Silicon Valley and the world.”

The videos from FinovateSpring2010 are now up on the Finovate site. Please check out some of the other 36 companies that demoed substantial new products and/or features. But first, here’s the Continuity Control demo:

Since we posted the initial Finovate feedback, Control has been recognized as being among the:

Most Helpful,

one of the most helpful of the products demoed at Finovate “What if somebody had told you three years ago about “an app store for financial compliance tools”? You’d have encouraged them to check both their diction and their predictions. But with “app” in common usage, Continuity Control actually lets you take an a la carte approach to compliance software.”

Most Interesting,

one of the Five Most Interesting Companies at Finovate “Financial institution compliance services.  Seems like a no-brainer in light of pending financial reform and everything other crisis-reform cycle that has taken place in the financial services sector over the past decade or so.  A solid presentation and what appears to be a solid management team.”

and Most Promising Financial Technology Companies

and, Celent selected Continuity Control as one of  Finovate’s most promising companies to watch in 2010.

Let’s face it, today, credit unions are faced with significant challenges such as driving growth, raising core deposits, member retention, expanding membership and ever increasing competition. Adding to these ongoing challenges is the ever-present and ever-increasing burden that regulatory compliance places on credit unions. At Continuity Control, we refer to this burden in the aggregate as the “Compliance Tax™”, and it is a cost that continues to grow with no end in sight.

This burden is leaving credit unions with the pressing question of “how to manage it all?” as the act of adhering to compliance continues to be more complicated and costly. Managing compliance not only costs in terms of dollars spent but manpower and other resources that have to be dedicated to the process. All of which takes away from serving the credit union’s membership.

This is where technology can be of help and in the end free up the resources that can then be dedicated to serving your members. Technology sits in the background and in the case of Control™, promotes more efficient management of the compliance process. It allows credit unions to have more visibility into the process and make better decisions, leading to better outcomes. In an age of doing “more with less”, technology can play a vital role in enhancing the process by automating tasks that in the past have been inefficient, tedious and manual.

The automation and streamlining that technology can provide is key to not only reducing costs but to better managing risk and compliance. With the proper technology in place the extra work that comes with the manual methods is now eliminated, reducing the work associated with compliance, and therefore reducing the burden and cost of compliance (i.e., the Compliance Tax).

As technology solutions have evolved, the role of making technology work has also evolved. Solutions exist today that enable the user to chose what specific area of compliance to address. These “user friendly” solutions are easy to get, easy to use and with available reporting features — easy to monitor. The main benefit here is that users can be up and running quickly with minimal data to enter and little or no training, and as a result can be productive from the start.

Using technology to manage the process moves risk mapping and auditing from people to software. It eliminates having an individual pushing the process along by automatically distributing the policies, sending reminders, ensuring consistency throughout the credit union and tracking everyone’s progress. The end result is that leveraging technology eases the burden and allows the credit union to focus on what they do best – serving the member.

To learn more about how the cost of compliance is affecting your credit union, I invite you to check out our free Compliance Tax calculator and white paper at www.compliancetax.com.

With the financial turmoil of recent years, the divide between too-big-to-fail and community banks and credit unions has emerged.  This divide is an important one for the recovery of the economy.  This is due to the role community financial institutions play in the US economy by providing the funding sources to our Main Street businesses.  Taking up the rally cry has been the Huffington Post with the Move Your Money campaign.  These efforts provide a valuable service to the industry by creating a central site for people to find local banks and credit unions and move away from the too-big-to-fail crowd proactively.  This move not only provides safety to the depositors, but also brings vitality and growth to these institutions to carry on the business lending functions that are critical to our economy.  It is only with the growth of assets that these community financial institutions can remain a viable part of our prosperous future.  But there’s another thorn in the paw of the community financial industry that needs to be addressed.

The other side of the ledger for community banks and credit unions is on the cost side of the equation.  Over the past decade, and especially in recent years, the complexity and costs of compliance have accelerated rapidly.  From additional regulations to increased enforcement, compliance costs have grown far faster then the organizations they regulate.  So while it is critical for assets growth to occur, if the cost of compliance is growing at a faster rate then it won’t leave the community banks and credit unions in a better position.  Compliance costs can really be seen as a tax, meaning burden, on the industry.  Due to the dramatic impact of scale, smaller institutions are hit at a much higher rate.  This is because they lack the scale to have dedicated roles for each area area to get the benefits of specialization.  The compliance tax is regressive.

In looking at the parts of the compliance tax it becomes clear that it is a “death of a thousand cuts”.  With so many checks, controls, validations, audits, policies and procedures, it’s no wonder it’s growing harder to keep up.  Much of the complexity has come on so slowly and incrementally that it’s reminiscent of the frog and the boiling water.  If you put a frog into a pot of boiling water, it jumps out.  If, however, you put it into cold water and slowly raise the temperature it will boil to death.  It is to this point that a recent Gartner Group paper declared that smaller financial institutions would be priced out of the market in the next 5 years.  The Callahan report shows the decline of efficiency ratios in credit unions from 78% to 92% from 2004 to 2008.  With this information it’s not hard to see why the Gartner analysis is spot on if nothing changes.  But this is not meant to be a sad story, rather one of great promise because we think things can change.

An alliance is forming to help the industry combat the Compliance Tax and in doing so help the industry remain the bedrock that it is.  The center of this movement is at www.ComplianceTax.com and its primary fixture is the ComplianceTax calculator.  This calculator is there to help banks and credit unions see that the water is, or is about to be, boiling.  The calculator is free to use and the site links to Continuity Control’s free platform for bankers to ask, answer and share findings around how they are attacking the compliance tax.  We as an industry can each pledge to take action against the Compliance Tax by making our compliance operations simpler, more consistent and more visible.  To this end, the Compliance Tax Alliance is taking 3 critical steps,

• ComplianceTax.com To provide a place to come together and focus our collective efforts.
• Free Compliance forums on Continuity Control To provide a place for us to share and work together so that we need not reinvent the wheel 16,000 times for each of us.
• Free policy repository on Continuity Control To provide free policies and procedures under open licensing so that community financial institutions may freely use, modify and share the work.

Through the two forces of growth enabled by the Move Your Money movement and cost reduction born by innovation from sharing, the community financial industry can retain it’s defining position in the US economy.

We’re excited to offer CUTweetTrack, a collective of all the credit unions using Twitter, their own private group on Community.

Social media is a hot topic in the Financial Industry right now. Roger Conant saw a need and created a solution with his profile @CUTweetTrack on Twitter. There he follows all the credit unions, leagues, and credit union social media initiatives (typically aimed at drawing the GenY crowd to the credit union movement) that are using Twitter. He has compiled over 330 Twitter profiles in the credit union industry.

His profile has two benefits. First, for the general public, it’s the place to go to find out if your credit union is using Twitter. The second benefit is for the credit unions themselves. Roger quickly noticed that credit union Twitter methodology was quite varied among the different profiles. He knew that credit unions pride themselves on collaboration and set about creating a spot where they could discuss the tools, benefits, different strategies and best practices for the Twitter platform.

The next step in the CUTweetTrack project was to create a blog. Roger enlisted the help of his friend and colleague James Robert Lay and the creative team at PTP NEW MEDIA to create the CUTweetTrack blog, the credit union resource for Twitter to help credit unions connect, communicate and listen. The first post, on June 14, 2009, was a great interview with Peter Hodges of BellCo Credit Union in Colorado.

The last step to making CUTweetTrack the truly collaborative project that Roger envisioned, was to find a community platform where the credit union staff could feel free to discuss anything and everything about Twitter and social media in a private forum. This is where Continuity stepped in and offered our Community. We are happy to provide a free, secure environment where credit unions can have discussions, share documents (for remix and reuse under Creative Commons licensing) and connect to each other.

If your credit union is one of the many that CUTweetTrack follows on Twitter, please feel free to join Community. Joining is a simple process requiring only your name and email, plus a username and password that you generate yourself. Once you’ve joined, you’ll want to go to the Group Directory and join the CUTweeetTrack group in the Social Media category. Some of the conversations already started are:

• What to Tweet?
• Quantifying Success
• and Supporting Special Campaigns

Since these polls are very simple to set up and only require a couple of seconds to respond to, we’ll be making this an ongoing project. Once a month we’ll post a new question to the Twitter community at large and we hope that the results of these polls will be informative to financial institutions. If you have any suggestions for future polls, please post them in the comments section, we’d love to hear from you!

Also, we’d like to let you know that our whitepaper, Crowdsourcing for Community Bankers, is now available completely free, no registration required. It’s available both in pdf format and as a printable article in the whitepaper section of the Continuity Control website.