For several years now, the credit union movement has been getting stronger by the quarter.

Sure, the number of credit unions has declined, but the survivors have become stronger and more relevant by every reasonable measure share, loan, and member growth, ROA, and average relationship, to name a few.

Even as the movement grows, however, credit unions are adopting divergent strategies to move forward. One of those strategies we at Callahan & Associates call bank lite. That’s basically an operation that looks and feels like a bank,only with slightly better rates, fees, and member-friendly vibe.

In some ways, credit unions were the original disruptors, providing credit and liquidity to Americans during of the darkest periods of our history.

Obviously, there’s nothing wrong with that. These are some of the movement’s successful credit unions, and they provide real member value.

The other direction we see credit unions taking includes going back to their roots. They’re inspired by the original reason they were formed, which typically involved a small group of people building a cooperative solution to their financial challenges.

People helping people, right? That’s a clich by now, but it still resonates with credit unions that are working to understand what it is consumers need from their financial institutions. They’re leveraging their position to help theirmember-owners solve those challenges.

Disruption: The Jobs To Be Done

It seems you can’t read anything about the future of financial services without hearing the term disruption. Callahan has been investing a lot of effort in leadership team development, Professor Clayton Christensen’s ground-breakingwork, and HBX, the Harvard Business School’s online learning initiative. According to Christensen, a key element of disruption is what he calls jobs to be done, which is a mechanism to understand the process by which consumershire or fire a product.

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An HBR article titled The Jobs To Be Done Theory of Innovation uses the efforts of McDonald’s to sell more milkshakes as an example. For credit unions, that milkshake could be creating a small-dollar loan that uses relationships as a big part of underwriting criteria. Another might be debit rewards programs. Or perhaps incentive-based savings plans.

There are numerous examples, but the idea remains the same: Mission-based credit unions are going back to really thinking about what consumers need today, what jobs members need to get done in their lives, and how the credit union can pivot or evolveto help them do just that.

In some ways, credit unions were the original disruptors, providing credit and liquidity to Americans during one of the darkest periods of our history, the Great Depression. The movement was able to disrupt the traditional banking sector by acting, asChristensen would put it, as both a low end and new market disruptor.

A New Disruptor Emerges

The emergence of the fintech industry is raising fears of a new disruptor. Already one regulator the OCC is considering granting special purpose national bank charters to these high-tech money movers.

Looking at the evolving competitive environment, those credit unions with a bank lite mentality will be at greater risk than those on a mission-based path. That’s because the latter are the credit unions that operate with the kind of definitionsof success or expectations of performance that can evolve the most quickly to meet changing member needs.

They’re the ones who are most surely responding to the jobs that members need to get done.

So, as Callahan looks forward to 2017, we’re excited to see how the lowered regulatory burden will enhance the ability of the nation’s member-owned financial cooperatives to re-energize and grow their mission-based focus.

We certainly recommend that path as perhaps the best way to be the disruptor, not the disrupted.