Evolving with the Times

Momentum Credit Union’s president and CEO, Malcolm Stoffman, explores the changing shape of the industry

“Credit unions need that next generation. By investing in technology, hiring younger people, and aligning our values with the values of the younger generation, we hope to be successful in our goal.” —Malcolm Stoffman, President & CEO

Defined as “the force gained by motion or by a series of events,” momentum is an apt name for a new business formed from two distinct, strong financial institutions with a combined 72-year history. Founded in 2010 by the amalgamation of Hamilton Community Credit Union and Twin Oak Credit Union, Momentum Credit Union Limited is forging a path in Ontario by tackling technology, staying true to its values, and developing strategic plans to attract a robust member base. We caught up with president and CEO Malcolm Stoffman to get Momentum’s game plan for growth.

Advantage: Tell us how two credit unions formed one.
Malcolm Stoffman: Over the past several years, the trend has been for credit unions to consolidate. Playing to this trend, the choice to form Momentum was a move made to take advantage of the strengths of two very successful, stable institutions. Hamilton Community Credit Union was very well capitalized. Twin Oak Credit Union had a successful sales culture and hearty membership. Together, the two create a bigger, better, stronger credit union.

Why the trend toward consolidation?
The economic crisis left many credit unions in unfortunate financial situations due to unanticipated loan losses. As a result, regulators now watch processes and operations much more carefully and closely. The regulatory environment—and the challenges that come along with it, due to more stringent regulations and reporting requirements—also has complicated operations. For example, we used to report our financials quarterly; now we report monthly as well as annually, so consolidation can aid credit unions in gaining efficiencies in the face of these new requirements.

What challenges did you face with your consolidation?
Let’s just say 2011 was intense. The auditing and regulatory oversight issues were a major undertaking—we went through nine different audits in the first year. Before the crisis, credit unions weren’t used to losing money on loans, and, as a result, there is much more emphasis on capital and liquidity now.

Tell me a little about your path to CEO of Momentum.
It was all hard work and good luck. My career started out in financial-services marketing in Toronto. My wife and I decided to move to Hamilton in 2001, to be closer to family, and I landed in the marketing department of a local credit union. From there, I worked my way up to my current role, where my main duties are overseeing the executive team and strategic planning process, managing board relationships, and working with regulators. I truly believe the credit union field offers a great number of opportunities for younger leaders, and I am fortunate to have benefited from these opportunities.

What changes has Momentum made to its offerings since 2010?
Leveraging existing and new technologies was among the first and most important steps we took. First, we upgraded our core and online banking system to incorporate the latest leading-edge solutions. We began engaging with social media via a Facebook page and blog to keep members informed and up-to-date on promotions and services. We also upgraded telephone banking and added mobile banking. Later this year, we will be adding more mobile banking applications, as well as SMS—or text—banking.

Why all the investments in technology?
We recognize the world is changing. While I am still a strong believer in brick-and-mortar buildings, going forward, it won’t be the same for this field. For us, branches will be smaller, as there is less need for members to engage personally with staff. Also, as two companies—with two different banking systems—formed one, we needed to engage the same technologies, systems, and processes to operate most efficiently.

So what’s your next move?
Attracting new members. Our first focus will be on small business with up to 100 employees. We want to draw not only their day-to-day accounts but also assist them with lending needs. We also want to look at ways to attract a younger demographic—families and singles just starting out.

Why young adults as a target?
Credit unions need that next generation. By investing in technology, hiring younger people, and aligning our values with the values of the younger generation, we hope to be successful in our goal.

What are Momentum’s values?
Credit unions, in general, are not solely about profit. Though profit is important, we also are about looking out for our members’ best interests. As a result of our long history, Momentum knows our members well and has continued to provide good products, good services, and good advice. We’re very comfortable with our direction, and feel we are building a better, stronger credit union that will continue to serve our members well, now and into the future.