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The Voice of Canadian Credit Unions November 2015

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Hackers thrive on stolen information Is your credit union protected?

The high stakes of a data breach

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November 2015Vol. 74, No. 6.1

Inside + Online

The opinions expressed in articles in Enterprise are the authors’ and not necessarily those of Enterprise or Central 1 Credit Union. In addition, the inclusion of an advertisement does not imply an endorsement of the product or service by Enterprise or Central 1 Credit Union. Enterprise will not knowingly carry false or misleading advertising. Enterprise reserves the right to refuse any advertisement. Both Enterprise magazine and Central 1 Credit Union disclaim any and all warranties, whether expressed or implied, including (without limitation) any implied warranties of merchantability or fitness for a particular purpose and neither Enterprise nor Central 1 Credit Union will accept any responsibility for the reader’s use of the information and / or opinions presented in Enterprise or any loss arising therefrom. The contents of Enterprise are covered by copyright and all rights are reserved. No material in this publication may be reproduced in any form without permission.

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Editor-in-Chief Janet Gyenes

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Concierge

Industry news, stats, facts and moreBy Janet Gyenes


06

09

14Hackers thrive on stolen information. Is your credit union protected?

By Mark Bourrie

Editor’s Note

Getting personal

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Read Enterprise online, from news stories and in-depth features to back issues, and more

Giving a boost to small business28Entrepreneurs have a lot at stake when they launch a start-up

By Sheldon Gordon

Marketing Matters

Diving into dataBy Sarah Brown

Shortcut

Small biz is big in Canada By Janet Gyenes

Work Life

Is sideways the new up?By David Reilley

Interview

The 100-mile- diet heroBy Adrian Brijbassi

The quest for quality childcare

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37

38

35

20Preschool co-ops are hard to organize, but successful ones nurture community

By Alexandra Samur

enterprise-magazine.comNovember 2015 5

Erin Welch

Getting personalWe’ve all read enough recent stories in the media to know that paranoia about who might be peering into our personal lives is warranted. Is it a “hacktivist” group? The Canadian government? What info are they looking at – and why? Our cover feature, “The high stakes of a data breach” (p. 14) explores how credit unions can protect members’ privacy in this cat-and-mouse game of outwitting the spies among us.

It’s easy to see big businesses – including big banks – as anonymous, unless they have a media-friendly or polarizing leader. The people responsible for pulling the ropes in the machine are often hidden behind closed doors. Not in small businesses, which are often run by families or like-minded individuals, like the owners interviewed in our feature, “Giving a boost to small business” (p. 28).

Here, the people running the machine, so-to-speak, are up front and very visible. Their needs are unique and credit unions play a real role in getting hands-on to understand them. Some credit union staff even make “house calls” so the people running their businesses can focus on their work, without having to make a trip to a credit union. That personal attention has lured many former bank clients to CUs. Jeff Johnson of Winnipeg-based Johnson Waste Management Ltd. sums it up simply, when talking about Dave Lester, his senior account manager at Cambria Credit Union: “Dave knows us and we know Dave.”

That same sentiment is likely felt by farmers and purveyors on Vancouver Island who are members of the Tofino Ucluelet Culinary Guild (TUCG). The organization got off the ground thanks to its tireless coordinator, Bobby Lax, along with the financial backing of B.C.’s Coastal Community Credit Union. Read “The 100-mile-diet hero” (p. 12) to learn more about how seasonal and organic foods are making the journey from farm to fork on the Pacific coast of British Columbia.

As we close another year of Enterprise and prepare for 2016, please share your thoughts about these features, as well as stories you’d like to see in our pages. I’d love to hear from you. In the meantime, enjoy the read and be sure to check out our website, which is continuing to grow — www.enterprise-magazine.com — and follow us on Twitter @Enterprise_CU.

Janet Gyenes, [email protected]

Editor’s Note

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The estimated average salary increase for credit unions (3.0%) in 2016, compared to the national average of 2.4%. Other sector leaders include leisure/hospitality (3%) and insurance (2.9%). Source: Hay Group

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By Janet Gyenes

Industry news, stats, facts + more

In Quotes

I would say we should always be extraordinarily cautious when we see governments trying to set up a new secret police within their own countries

NSA whistleblower Edward Snowden, referring to Bill C-51 legislation when addressing Toronto students early this year at Upper Canada College during a live broadcast entitled “Privacy vs. Security: A Discussion of Personal Privacy in the Digital Age”

Global

Lighting up rural TexasSeventy-five years ago farmers and other rural dwellers in Texas would have been quite literally living in the dark once the sun dipped beneath the horizon. Their urban counterparts, however, had been cooking and doing schoolwork by the bright evening light since the 1930s, thanks to electricity that surged through big cities such as Dallas, Austin, Houston and San Antonio, among others. Coal-oil lamps allowed life to go on in the unwired rural regions that large, private power companies would serve. Bringing electricity in wasn’t profitable, after all. In 1935, the Rural Electrification Administration was established to support farmers and ranchers in their endeavour to turn the lights on in rural regions. It allowed them to borrow federal funds, which they used to create local, consumer-owned electric cooperatives. Bartlett Electric Cooperative was the first in America to brighten the dark nights for its members in 1935. Five years later, more than 567 cooperatives were providing electricity to 1.5 million customers. The number has continued to grow: today more than 900 electric co-ops serve 40 million people in 47 states.

Source: Texas Electric Cooperatives


Concierge

Time Machine

B.C. Credit Unionist, February, 1960 The forerunner to Enterprise magazine was the B.C. Credit Unionist, which was first published in 1941. An article in the February 1960 issue, entitled “Monkey shines pay off,” shows that security was already an issue for financial institutions, especially in Asia, where counterfeit coins were rampant. The solution: hiring monkeys (trained for up to two years!) to ferret out fakes based on weight, colour and strength. These were identified by a “bite test,” since counterfeit coins mark more easily. As the story goes, “A well-trained monkey is said to be worth up to $5,000 to a bank. In one day a Bangkok money sleuth detected 56 false coins.”

Mergers

Manitoba merger fails for the second timeIt was déjà vu all over again. For the second time since April, members of Manitoba’s Access Credit Union and Assiniboine Credit Union were called on to cast their ballots in support of teaming up. Once again, the merger was defeated, with just 32.8 per cent of Access members voting in favour of amalgamation, far short of the 66.67 per cent threshold. As a result, Assiniboine’s merger vote scheduled for September 21 was cancelled. In the original vote, support from its members was 95 per cent.

Awards

Canada’s CUs win record-breaking nine awardsFor the 11th year running, Canada’s Credit Unions earned the coveted Customer Service Excellence honour in Ipsos’ 2015 Best Banking Awards, edging out all other financial institutions. Canada’s Credit Unions (an aggregate of individual CUs across Canada) were the sole winner in three categories and shared honours with other financial institutions in six categories, bringing its total to a record-breaking nine awards, based on the results of more than 45,000 completed surveys:

1. Customer Service Excellence: Credit Unions

2. Values My Business: Credit Unions

3. Branch Service Excellence: Credit Unions

4. Products & Services Excellence: Credit Unions, Tangerine, President’s Choice Financial

5. Financial Planning & Advice: Credit Unions, BMO Bank of Montreal, CIBC

6. ATM Banking Excellence: Credit Unions, Desjardins, National Bank

7. Online Banking Excellence: Credit Unions, Desjardins, National Bank, Tangerine

8. Automated Telephone Banking Excellence: Credit Unions, BMO Bank of Montreal, Desjardins, National Bank

9. Live Agent Telephone Banking Excellence: Credit Unions, Desjardins

Though disappointed with the results, Access Chair Darryl Loewen reinforced his support for the process of giving members a say on the future of their credit union. “While as a board we firmly believed the merger would make two strong credit unions stronger in the face of rapidly changing financial sector, our members felt otherwise,” said Loewen.

Together, the two credit unions would have become Manitoba’s largest credit union by assets, branches and members.

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Read about privacy and security in “The high stakes of a data breach” (p. 14).

Overheard on Twitter

World Council of CUs@WOCCU Sep 23

#Millennials support brands that stand for more than the bottom line, & this is where #creditunions fit beautifully http://ht.ly/SyfN8

S Chandra Herbert @SChandraHerbert Oct 1

it makes no sense that credit unions like @Vancity which invest in local communities would pay higher taxes than big banks.


Learn more about the Concentra story here concentrafinancial.ca/Story

”Over the past ten years, credit unions have built Concentra into the leading

national wholesale and trust company. We sincerely thank you for your support

and look forward to being your trusted partner for many years to come.”

Ken Kosolofski, President & CEO, Concentra

Ten years ago, Concentra was formed by the cooperative movement working together. It was created to support and strengthen the credit unions of Canada; to meet their increasingly sophisticated financial needs – and those of their members.

Today, Concentra is a strong, stable, national financial institution, focused on helping credit unions optimize financial performance, diversify risk and meet member needs to boost their competitiveness. Our market share is expanding, and our business is thriving. Most importantly, our credit union clients are achieving success with our wholesale and trust solutions. That’s the reason we are in business.

We share a vision for a robust and thriving credit union system in Canada. And for that reason, we will continue to find new ways and new opportunities to support its growth and sustainability. We are committed to credit union success.

We look forward to you being a part of the next chapter in the Concentra story.

How one foodie turned his love of local produce into a $15,000 prize By Adrian Brijbassi | Photo by Eugenie Freichs

When Bobby Lax stood on stage in a crowded theatre facing a panel of three judges deciding the winner of a lucrative prize for emerging businesses, he knew there was only one way to best make his presentation. He needed the judges to taste it.

Bobby is the food coordinator for the Tofino Ucluelet Culinary Guild (TUCG), which is dedicated to sourcing organic and seasonal products for communities on the Pacific coast of British Columbia. Under Bobby’s guidance, the TUCG has shown what a difference local flavours can make. In May, he was one of three finalists nominated for the Social Enterprise Catalyst (seCatalyst) award, an honour from the Nanaimo Chamber of Commerce given annually to a business that brings benefits and opportunities to the city.

“We were lucky this year on Vancouver Island because it was a very early strawberry season. The day before I was presenting, I called one of the producers I work with and she had just picked a

The 100-mile-diet hero

bunch of fresh strawberries. I was able to get my hands on some and pass them around to the judges,” says Bobby, who got the berries from Katie Farm in Duncan, B.C. “They were able to taste what a strawberry picked right from the farm is like and know how much better and sweeter it is compared to what you get in the grocery store.”

The three fortunate judges were clearly satisfied and impressed. They awarded Bobby the competition’s grand prize, which included a $15,000 cheque to help fund the TUCG. It is a distinction that also underscores how the TUCG – which was created to improve the quality of food available in Tofino and Ucluelet – has benefitted a range of communities. Nanaimo, which hosted the social enterprise catalyst award in May, is a three-hour drive ride east of Tofino.

The TUCG was started in 2010 when a group of chefs from Tofino hired Bobby to find a solution for the lack of regular shipments of

Interview


food from Vancouver Island’s farms to the Pacific coast. Even though they are only a few hours by car away, the island’s farmers didn’t have the resources or infrastructure to compete with multinational corporations, who have the means to frequently deliver large volumes of food to locations large and small.

“When we started the culinary guild, we knew we were going to need someone to coordinate it and we knew it had to be someone young, energetic and really, really hungry to do something new and unique,” says Lisa Ahier, the chef and owner of SoBo, a well-regarded restaurant in Tofino and Bobby’s former place of employment. “This would never have happened. It would have never succeeded at all if it weren’t for Bobby. It took somebody with Bobby’s integrity and passion, because it’s a ton of hard work.”

What Bobby initiated at the TUCG, with the support of the Coastal Community Credit Union (79,000 members, $1.8 billion in assets), is a food delivery program that includes online ordering, weekly pickup and same-day delivery of the best quality fruits, vegetables and meats available on Vancouver Island.

On Fridays, Bobby receives notifications from farmers who detail what quantity of products they have for the coming week. On Saturdays, he compiles the list from the more than two dozen farm suppliers he works with and then sends a notification to the approximately 130 TUCG members, including individuals, families and businesses. By Monday, the members have placed their orders. On Wednesdays, Bobby’s drivers head out to a pick-up

point central to the three Vancouver Island farming communities. The farmers gather to drop off the items that have been ordered. The truck drivers load up and haul the goods back to Tofino, where members arrive to pick them up. It’s an efficient process that has improved the standard of food in Tofino as well as the reputation of its restaurants.

In 2014, Bobby’s efforts helped the farmers, including several in the Nanaimo area, collect $300,000 through orders from the TUCG. That’s an increase from $80,000 in 2010, the program’s first year. With the cash prize from the Social Enterprise Catalyst award, the TUCG will build a 1,000-square-foot warehouse to help with food storage.

“We’ve given farmers somewhere else besides their local farmers’ market to sell their goods and I think that’s where we are making a difference,” says Bobby, who moved to Tofino in 2006 after finishing a degree in business and philosophy from the University of Guelph in Ontario.

He credits Lisa with introducing him to the region’s farming communities and informing him of their challenges. Bobby endeared himself to her when he was just 20 years old and on the hunt for a job. She remembers him walking through SoBo’s door and declaring hers was the only restaurant for which he could work. She gave him a one-day tryout as a dishwasher but wasn’t impressed. Yet he refused to go when he heard no. “He said to me, ‘You don’t understand, I need to work for you. I really, really need to work here. You’re the only person in this town who is working with farmers so closely,’” Lisa recalls. His conviction persuaded her. Bobby wound up spending more than four years in the SoBo kitchen.

“I think he and I both knew that a professional chef was not really his calling, but he had so much heart, so much passion for food and where it came from. I remember whenever I would get a shipment in from a farmer, he would run up to me and say he wanted to touch it, he wanted to see it,” she says. “It was such a special thing for him and it is all from the heart.”

Along with helping restaurants serve better dishes and assisting farmers in developing new markets, Bobby also spends time educating children on the importance of local food.

“It’s about giving people flavour memories,” he says. “When you taste a strawberry picked from the farm that day you are going to blown away by the flavour. You’re also going to be OK with paying a little bit more for it if you have to.”

In May, Bobby won the Social Enterprise Catalyst (seCatalyst) award, an honour from the Nanaimo Chamber of Commerce given annually to a business that brings benefits and opportunities to the city

Bobby also spends time educating children on the importance of local food


The high stakes of a data breachHackers thrive on stolen information. Is your credit union protected?By Mark Bourrie

Last August, husbands and wives took to the Internet to check up on their spouses. People looked for the names of friends, enemies, co-workers and celebrities. Some 33 million client files from the cheaters’ hookup site Ashley Madison lit up the Web, dumped there by hackers who said they were disgusted by the site’s business model. The company had assured clients that their data was safe. It wasn’t.

The Ashley Madison hacking has turned out to be a nightmare, not only for the website and its clients, but also for the thousands of innocent people whose emails were ripped off by real Ashley Madison customers: the company did not require email addresses to be verified. Within days, according to Toronto police, at least two people whose names were in the data dump killed themselves. Several class action lawsuits, including one for $750 million, were filed against Ashley Madison and related companies.

The consequences of a data breachFinancial services institutions, of course, function using a much different kind of personal information – but it’s meant to be just as private. Imagine the consequences if a data breach happened to a credit union. A leak in the system would be traumatic for everyone, but data protection is particularly important to the younger generation of potential members that the credit union movement needs in order to remain viable. They expect instant communication on different platforms such as tablets and smartphones. Yet they’re also keenly aware of the recent Ashley Madison disaster.

The 2013 data breach at retail giant Target, when thousands of credit card numbers were hacked, also heightened concerns about the safety of private financial intelligence. The information rupture cost Target $10 million to settle a class-action lawsuit,

iStock


plus a lot of consumer goodwill. And according to the American Bankers Association, Target had to reissue 6.8 million credit and debit cards out of concern for fraud, costing financial institutions more than USD$60 million – resources that could have been reinvested in the community and in better technology, products and services for customers.

Not just criminalsCriminals aren’t the only ones who are hackers. Intelligence and law enforcement agencies also scour the Internet looking for any data that can be useful to governments. In the U.K., Prime Minister David Cameron said intelligence agencies need to have back doors to encrypted data management systems. In Canada, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) wants to know about any suspicious activity by clients of Canadian financial institutions.

There’s been enormous pressure on telecoms to hand over information to security agencies and they’ve given up emails, texts and live calls” — Dr. Ann Cavoukian

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As well, in August 2015, members of the Canadian Association of Chiefs of Police told the federal government that they wanted far easier access to Canadians’ online records, including warrantless searches of Internet subscriber data. And a new $2 billion building recently opened in Ottawa to house Communications Security Establishment Canada (CSEC), the federal government’s code-breakers and signals interceptors. There’s no reason to expect CSEC or other spy agencies will leave us alone, just because they’re ours.

Since 2005, The Globe and Mail reported recently, “CSEC has been systematically mining the metadata of Canadians’ electronic communications – phone calls, emails, text messages, Internet visits, and collecting thereby, information that can be used to develop comprehensive profiles of the habits and social networks of targeted individuals and groups.” Privacy: a valuable commodityDr. Ann Cavoukian, executive director of the Privacy and Big Data Institute at Toronto’s Ryerson University, says protection of data is becoming a big issue for consumers. Cavoukian served three terms as Ontario’s Information and Privacy Commissioner and is the author of The Privacy Payoff: How Successful Businesses Build Customer Trust. She says privacy is a valuable commodity in a world where the perceived threat of terror is

growing and governments are pushing for more access to very private information.

“There’s been enormous pressure on telecoms to hand over information to security agencies and they’ve given up emails, texts and live calls. Telus took this all the way to the Supreme Court and won,” she says, referring to a 2013 decision that Canadians’ digital communications should get the same privacy protection as voice conversations during police investigations. “For financial institutions, there are probably similar pressures [from] government to give information [or keys to encryption]. Next to health information, our financial data is the most personal information that we have. The data says so much about us. We don’t want to share it with anyone, including the government.”

Protection – to a pointCanadians do enjoy some protection from potentially intrusive government groups. All Canadian financial institutions – and anyone else who uses personal information for commercial purposes – must follow the rules of the Personal Information Protection and Electronic Documents Act (PIPEDA), which was passed in 2001. At the time, Canada was trying to work out a free trade agreement with the European Union (EU), which takes privacy very seriously. Ottawa needed information and privacy laws that conformed to the EU’s rigorous standards.

Canadian governments and cyber security

According to Public Safety Canada (PSC), the nation’s governments at every level are relying on the Internet to store information, collect tax payments and more. The federal government alone offers more than 130 services online, including tax returns, employment insurance forms and student loan applications.

PSC acknowledges cyber-attacks, defined as “the unintentional or unauthorized access, use, manipulation, interruption or destruction of electronic information and/or the electronic and physical infrastructure used to process, communicate and/or store that information,” mean this information can be leaked. Every year, the department states, “we detect more attackers than the year before. And every year, those seeking to infiltrate, exploit or attack our cyber systems are more sophisticated and better resourced than the year before. They are investing in their capabilities. We must respond by investing more in ours.”

Criminals who gain access to a computer can steal or alter the information they find – and may introduce viruses or other pernicious malware that can infect and destroy intricate systems and data banks. This leads, in many cases, to identity theft. One study conducted at McMaster University found that 1.7 million Canadians were victims of identity theft in 2008 – a stat from relatively early days of Internet banking. The annual cost of identity theft in Canada has been estimated at nearly $1.9 billion.

PSC argues, however, that foreign governments and other agents are the biggest threat to cyber security, as they seek to get access to information that can benefit them and jeopardize our political, economic, commercial or military systems.

“All technologically advanced governments and private businesses are vulnerable to state sponsored cyber espionage,” declares the PSC website.


Canadian governments and cyber security

Nonetheless, officials appear to be increasing the pressure on various organizations to share confidential material as incidents of homegrown terrorism make headlines.

The complexity of encryptionEmail encryption systems are complex. Smaller organizations, especially, have problems with managing the critical bits of information known as keys. They also struggle with deploying servers and dealing with major changes in mail flow. Yet all these skills are needed to keep unwanted eyes off of electronic files.

Echoworx, which has its head office in Toronto and also operates in the U.S., the U.K. and Europe, has sold encryption software to Dell, Symantec, AT&T and Verizon. The firm realized the Canadian credit union system was a good market for high-security data protection and in October 2014, it partnered with Celero to offer email encryption software to credit union clients. The software monitors two-way communications, ensuring account statements, loan applications and insurance forms are safeguarded. Credit unions also use the software to secure sensitive documents needed by regulators. At present, more than 3,000 credit union employees in Canada use Echoworx’s encryption software and secure data storage, making it a major provider of managed encryption services for Canadian credit unions.

All the data, whether it is moving or stored, is handled in data centres that comply with the requirements of payment card industry standards and meet the standards of Statements on Standards for Attestation Engagements (SSAE 16). The software can intelligently determine the best technology to encrypt email based on the recipient’s ability to decrypt the message.

Don Walker, chief auditor with Credit Union Central of Saskatchewan and head of INTERAC® compliance for the organization, believes the use of such encryption software was long overdue. “Everything’s connected to everything,” he points out. “Computers and servers are left on all the time, so if someone gets to your hard drive and into your computer, encryption software stops them from getting to your data.”

The software challenge Ryan Tollofson, director of marketing at Echoworx, says his company’s software operates on a private cloud platform and that credit union members can be sure their accounts are at least as safe as those in any bank. “Sometimes credit unions are much farther ahead of banks,” he adds. “The banks are driven by compliance, while credit unions are driven by innovation. The small size of many credit unions makes them more nimble, more open to new ideas and new ways of looking at things.”


The challenge for software makers was to come up with software that was somewhat invisible to the people who use it. Surveys have found that people worry about privacy, but are careless with the way they look after their own information. The software sold to credit unions is, Tollofson says, “easy to use, so that it is no problem for clients who have no technical expertise. It is also easy for credit union employees, who simply press a button to encrypt the material. Some credit unions have chosen to upgrade to content-scanning. Even if an employee forgets to encrypt an email, the software scans it and looks for credit card numbers and other sensitive data, then automatically encrypts the file.”

Like Cavoukian, Tollofson believes money spent on data protection is an investment, not a business expense. The value comes from the ability of credit unions “to be able to tell your clients that you are careful with their data and that you have effective ways of protecting it. Compliance [with PIPEDA] is the tip of the iceberg.”

For her part, Cavoukian developed a management protocol called Privacy by Design in the mid-1990s, years before cyber security became an issue. Its name refers to the philosophy and approach of embedding privacy into the design specifications of various technologies. The system encourages businesses to think about privacy issues at the very beginning of a project and work on protecting privacy at each stage of product development. Its guidelines, which have been translated into 37 languages, are meant to complement – not replace – compliance to legislation.

“Wouldn’t you want a preventative medical model, rather than one that relies on surgery and chemotherapy to deal with illness?” Cavoukian asks. “Companies need to identify privacy rights and issues at the front end and build in protection. Big Data. Big Privacy. How do you build those into the DNA of your organization? Privacy protection is positive-sum, not zero-sum. You can have privacy advocates and businesses working together when business leaders see there is a positive in privacy. When it comes to privacy, distrust is at an all-time high, not just

in terms of distrust of the state, but also in terms of fears about businesses.”

Regulation fatigueTollofson says Canadian businesses are keeping up at the industry level with competitors overseas and although this country has never been a leader on privacy, we’re certainly doing as well as the United States – if not better.

In October 2014, an employee of the regulatory National Credit Union Administration (NCUA) lost a thumb drive containing personal credit union member information including the names, addresses, Social Security numbers and account numbers of around 1,600 members of the Palm Springs Federal Credit Union, a $13 million cooperative in Palm Springs, California. Debbie Matz, chair of the NCUA board said the agency was considering proposing a data encryption rule following that data breach.

Yet the National Association of Federal Credit Unions (NAFCU), the trade organization for credit unions in the U.S., maintained there was no reason for regulators to insist on more data encryption rules after that event. In a 2015 media release, Alicia Nealon, NAFCU’s director of regulatory affairs, contended that credit unions already follow data security regulations, although she allowed that the system had to find better ways to protect members’ data. “Rather than promulgating additional regulatory burdens on credit unions, NAFCU should take a look internally at what actions the agency can take to better protect the credit union data in its care,” Nealon stated in the release.

No security guaranteesIn any event, the world is becoming a tough place for every company or person who values privacy. Dr. Vincent Mosco, professor emeritus of sociology at Queen’s University and author of To the Cloud: Big Data in a Turbulent World, says being cheap with data protection systems increases the possibility of serious trouble. “No system can be guaranteed to be completely safe, even the ones that claim to have the highest security and charge the highest rate,” he says, but the better ones rely on a private cloud service, rather than on cheaper data storage in the “public” cloud, which is hosted on servers in China and other low-cost countries.

Mosco says computer hacking happens all the time. Businesses can’t delude themselves that hacking is rare just because breaches only make the news once in a while. Mosco, who is writing a paper on computer hacking for the Canadian Centre for Policy Alternatives, remarks that he has to change it all the time because new incidences of hacking occur regularly. “People in the industry say hacks are happening every day, but companies don’t report them unless they absolutely have to,” he says.

When it comes to privacy breaches, credit unions, of course, have a responsibility to be transparent. Better to put all possible safeguards in place beforehand, however, to ensure such ruptures don’t happen.

“Computers and servers are left on all the time, so if someone gets to your hard drive and into your computer, encryption software stops them from getting to your data ” — Don Walker


Central 1 Credit Union is seeking highly qualified, skilled candidates to fill three positions on its Board – two in British Columbia and one in Ontario. Potential candidates must be existing directors or officers of a Class Member of Central 1 Credit Union. All three positions are for three-year terms. Being a director of Central 1 demands a significant investment in time, energy and expertise. It is also an opportunity to contribute to the success of Central 1 and the credit union system as a whole.

Call For Nominations For 2016 Director Elections

� Integrity & transparency � Strategic thinking � Relationship building � Independence � Alignment with cooperative

principles & values of Credit Union system

� Results orientation & outcome focus

� Constructive communication � Decision making � Innovative thinking

Candidates should demonstrate the following values and behaviours :

Candidates should be knowledgeable in the areas of :

� Financial literacy � Legal & regulatory � Management risk � Central 1 business & functions � Liquidity management

Candidates, in particular for this year, should have strong or expert knowledge in one or more of the following :

� Legal � Liquidity management � Regulatory � Technology business

Potential candidates should express interest by submitting a nomination package. Nomination packages will be available mid-November through your credit union or contact Central 1’s Corporate Secretary’s office at [email protected].

iStock

Preschool co-ops are hard to organize, but successful ones nurture communityBy Alexandra Samur

At 8 p.m. on a warm June night, Katharine Todd Millar convenes a meeting at an East Vancouver café. Joining her are seven mothers interested in becoming members of a babysitting exchange co-op. “I want community back in Vancouver. I was born and raised here,” Todd Millar says to the group. “I live in the townhouse that I grew up in, yet I don’t know my neighbours. That bothers me. So I could either shut up or do something about it – which is why I’m doing this.”

The questfor quality

iStockenterprise-magazine.com

November 201520

Preschool co-ops are hard to organize, but successful ones nurture communityBy Alexandra Samur

A babysitting co-op, Todd Millar emphasizes, not only alleviates the financial and emotional stress of finding good care (a huge motivator) but also provides community-building opportunities – the chance to spend time with local children and other mothers. As such, Todd Millar has seen how much the year-old co-op she organized has helped the parents within her network and she now has ambitions to expand it.

Todd Millar uses the co-op for regular care so she can get to her part-time job with a Vancouver digital agency, although most members use it for date nights, workouts or to tackle errands

without the kids. The average cost of a babysitter in Vancouver is $15 per hour, so the co-op helps offset this expense.

In Cochrane, Alberta, Anne Hayter echoes the importance of community for the parents of the Cochrane Babysitting Co-op. The stay-at-home mother of four has been using the co-op on a weekly basis for three years. “If you’re in a neighbourhood, you get to know your neighbours and you get to know the people who go to your [children’s] schools, but the co-op’s been great because we know people all over Cochrane now. We probably would have never met them otherwise,” she reflects.

The Cochrane group started in 1985 and is Canada’s oldest babysitting co-op. Thirty years on, its members still use red and

blue plastic bingo chips instead of cash to exchange babysitting hours. Prospective co-op members must submit to an RCMP criminal records check. As well, two co-op members conduct a safety check of candidates’ homes before they are accepted into the fold. A 10-page bylaw document covers monthly meetings, explains how to track hours and organize schedules and outlines member roles, among other rules and responsibilities. The co-op secretary coordinates weekly babysitting arrangements, matching families with sitters via email.

Laying the groundworkInformal babysitting meetups and other groups like the ones in Vancouver and Cochrane exist across the country. They illustrate how industrious parents have been finding suitable care for

You’ve got people [who] are looking to join for financial reasons because it’s a less expensive alternative”—Roberta Stuart


fundraising and enrollment, the cost for each participating child is generally less than for other programs. Co-op preschool parents also play a part in the classroom alongside early childhood educators (ECEs), where they inevitably get a crash course in teaching techniques to apply to their toddlers. “The [Early Childhood Educator’s] goal is not only to be interacting with the children,” explains Nancy Bradley, Executive Director of PCPC. “Parents are really learning every time they are there. They’re not just sitting there cutting circles out of paper.”

As a child, Emily Mather, attended Time to Play Co-op Preschool in downtown Toronto. When the facility opened in 1980, there was so much demand that another co-op preschool immediately opened next door. Her own experiences and hearing about the friendships her mother developed while her three children were at preschool motivated Mather to register her three-year-old son Kye at a co-op preschool as well. Mather appreciates the community aspect of the co-op model: “My favourite part is meeting with the other mothers in my neighbourhood whose kids attend the preschool,” she says.

Challenges for the futureThe increase in dual-income families with less free time, competition from a blossoming for-profit childcare industry as well as a lack of funding and spaces for childcare centres have taken their toll on co-ops over the years. “Participation is a huge challenge right now – getting parents to feel that they can commit some limited amount of time,” says CPPPBC’s executive director Stuart. “The most important [deterrent] is ‘time pinch.’ That’s what’s coming back to us from members. In the last 10 years that that’s been the main issue – it’s two-income working families and [fewer] grandparents [who] are available.”

As a result, co-ops have had to adapt their mandates. “Our policy book has been through a huge modification in the last couple of years,” says Stuart. She adds that she’s been working hard to

“The organizational challenge of having a child in preschool for only two hours, two or three times a week, is simply not solvable for many working families ” — Roberta Stuart

their little ones. Indeed, such groups have traditionally set the groundwork for formalizing childcare co-ops.

The Canadian Cooperative Association estimated that in 2007, when it produced its last report on the subject, 34,000 families were members of childcare co-ops. Eighty per cent were preschools – the focus of this article – with the largest concentration of co-ops located in Ontario, Manitoba and Saskatchewan. According to the report, British Columbia was found to have “a considerable number of co-op-like organizations” as well.

Childcare co-ops grew out of need. They originated in the U.S. in the early 1900s in small or rural communities where public childcare facilities simply would not have existed otherwise. In Canada, B.C. families first began organizing preschool cooperatives in the 1940s, with organizations such as the Association of Cooperative Play Groups of Greater Vancouver and Vancouver Island’s Cooperative Preschools leading the way. Shortly after, Ontario and Quebec parent groups also began holding informal meetings. Today, they do more than merely provide a much-needed resource. Participatory models of cooperative childcare can foster social inclusion among traditionally marginalized groups.

Nurturing communitiesThe Council of Parent Participation Preschools in British Columbia (CPPPBC) and the Parent Cooperative Preschool Corporation (PCPC) in Ontario are the only two provincial councils of their kind in Canada. They work to support active networks of preschool co-ops locally and occasionally counsel groups nationally and internationally.

“You’ve got people [who] are looking to join for financial reasons because it’s a less expensive alternative,” says Roberta Stuart, Executive Director of CPPPBC, which currently has 23 member preschools, “and you’ve got people who want a more inclusive, transparent educational environment and connection with their children. [They want to participate] and be involved in their children’s lives in a way that isn’t segmented. To stay connected actually takes effort. It’s much easier to become disconnected. As a society I think people are feeling that loneliness. People want to stay connected.”

Reduced fees just one benefitSince parent volunteers help run all aspects of non-profit co-op preschools, including managing budgets, hiring staff and teachers,

The average cost of a babysitter in Vancouver is $15 per hour, so the co-op helps offset this expense

continued on pg 26enterprise-magazine.com

November 201522

Risk vs. Reward: Digital disruption

Canada’s credit union system is in the midst of unprecedented change. The disruptions are being triggered by a number of factors, which MNP explored in our May 2015 white paper: The Race to Get Ahead: Credit Unions Caught in the Crosswinds of Change. A common topic of discussion with our credit union clients is how to manage the external pressures of digital disruption. For some financial institutions, it’s a risk that needs to be mitigated, but for some forward-thinking companies, it has created a new path to competitive advantage.

What is digital disruption?

Digital disruptions are invariably technologies that change how information flows. More than just increasing the speed of information, true disruptions destabilize existing processes and behavioural norms as a result of improved access to information. Consumers are able to access more information and process it in new ways. This can remove the power from traditional industry players who had controlled this data as a source of competitive advantage.

The Internet disrupted the travel agent business as consumers gained direct access to pricing information and booking tools. Real estate agents are competing with new entrants that are willing to share previously-protected information and Uber is in the midst of using digital services to disrupt the taxi industry.

Not all technological innovation is truly disruptive. For example, moving from hardware-based to cloud-based servers is a competitive challenge for local technology service providers and can make good business sense for credit unions. However, it is not a truly disruptive technology for the customers of financial institutions.

Successful organizations can identify the truly disruptive opportunities and adapt. For decades, the music industry controlled how songs were packaged, distributed and sold. Apple recognized the potential of the Internet to change market behaviours and used the iPod and $1.29 songs on iTunes to force out the existing players. They then went ahead and replaced that business with iPhones and subscription music, because Apple knew that if they didn’t do it someone else would.

How will Credit Unions respond to digital disruption?

Canadian financial institutions are famous for their conservatism in the face of change. This has been a strength in times like the 2008 crisis, and for building trust with consumers. However it also opens themselves up to disruptive competitors and the potential to be caught by surprise. A forward-thinking management team will pay attention to changing technologies to monitor and predict disruptions through a risk and opportunity lens.

Predicting the future isn’t easy. Management teams can approach digital disruption by identifying a small number of potentially disruptive technologies and then work through the impact on their credit union members and organization. This can be accomplished using a risk/opportunity framework that considers factors such as the likelihood and magnitude of change, impact on information flow, impact on existing industry structures and impact on key credit union areas such a member interactions, products and services or back office operations.

By embracing digital disruption, credit unions can continue to demonstrate leadership in looking after the evolving needs of their members.

To view MNP’s recent whitepaper — The Race to Get Ahead: Credit Unions Caught in the Crosswinds of Change — go to: www.mnp.ca/crosswinds

Annette Kuckartz, CPA, CANational Credit Union LeaderT: 1.877.500.0778E: [email protected]

Doug Macdonald, MBA, PMPCredit Union Consulting Leader T: 1.877.251.2922E: [email protected]

David Baxter, MBA, PMP, CIPMFinancial Services ConsultingT: 778.374.2162E: [email protected]

Childcare by the 40

74

Percentage of growth in women’s employment rate between 1976 and 2011

Percentage of mothers with children under age six working outside the home

Sources: The state of early childhood education and care in Canada 2012 by Carolyn Ferns and Martha Friendly, June 2014; Early childhood education and care in Canada 2012 by Martha Friendly, Shani Halfon, Jane Beach and Barry Forer; Growing Pains: Childcare in Canada by Sunil Johal & Thomas Granofsky, June 2015

Percentage of children under age six who have access to licensed childcare

22.5

Percentage of growth of regulated childcare centre spaces for young children between 2010 and 2012

0.7

Average parent fees for childcare per year in Ontario

$12,000

Average parent fees for childcare per year in Quebec

$1,824

Average monthly cost of licensed daycare for a child under age two in Toronto – the most expensive Canadian city for childcare

$1,676

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Contact CUMIS today 1-800-263-9120 www.cumis.com

CUMIS® is a registered trademark of CUMIS Insurance Society Inc. and is used under license.


1 Coin Counting Practices within the Credit Union Industry; BranMark Strategy Group, 2013

To obtain your free cost analysis and learn more about how your credit union can increase branch traffic with self-service coin redemption, visit cumminsallison.ca/traffic

Increase Member Satisfaction and Teller Efficiency with Self-Service Coin Redemption

In today’s era of branch transformation, credit unions are looking for ways to increase member satisfaction and meet members’ self-service expectations. These needs should also be balanced with credit unions’ goals to increase teller efficiency and grow the business. The addition of a self-service coin redemption program enables credit unions to achieve these objectives, while adding the convenience of a new service offering in the branch.

Increase Branch Traffic and Cross-Selling Opportunities

Despite the growing influence of alternative banking methods, members still consider the branch a primary channel for conducting their banking needs. Members continue to value the face-to-face interaction and quality of service that can only be delivered at a branch. The addition of a self-service coin counter increases member visits creating opportunities for face-to-face engagement, cross-selling and prospecting new accounts.

Improve Member Satisfaction

Eighty-nine percent of credit unions cited adding a value-added service to their branches as the top reason they offer self-service coin redemption.1 Achieving high levels of overall member satisfaction has a strong positive effect on member loyalty and commitment, as well as share of wallet.

A self-service coin machine in the lobby eliminates the need for members to count and wrap their coins. Instead, they can avoid teller lines while holding heavy coin containers and they can have a faster, more meaningful exchange with the teller when cashing in their

coin redemption receipt. Additionally, a no-fee coin counting option and waiving fees for non-account holders who chose to open an account can increase member loyalty.

Maximize Teller Efficiency

Coin redemption can help credit unions achieve better efficiency in the branch, as well as cost savings. Self-service coin machines free tellers from time-consuming coin counting – reducing the cost of labour inherent in providing this service. In a recent use case, branch locations with self-service coin counters in place were able to maximize efficiency by redirecting workloads and reallocating tellers to more cost-effective tasks. In fact, more than 40 teller hours on average were gained each month in branches where members process their coins without teller assistance.

Vendor and Product Selection Matter

The success of a self-service coin program hinges on members’ and employees’ positive interactions with the coin

counter. As the number one provider of high-speed coin processing equipment, Cummins Allison delivers unmatched service, support and equipment performance.

Cummins Allison’s Money Machine®2 is the only self-service coin machine to offer 16 sorted-bag capacity, making it easier to manage and transport coin, and providing more flexibility for coin collection and pickup. As the only vendor to offer four flexible procurement options – own, lease, rent or placement – Cummins Allison makes it easy for credit unions to add self-service coin redemption to their branch. Multiple coin management options give credit unions the flexibility to select what’s best for their specific branch needs. A customized cost analysis performed by local Cummins Allison representatives can help credit unions select the right combination of program

options to meet unique business needs, risk levels and revenue objectives.

The addition of a self-service coin counter in the branch increases member visits to those locations.

A D V E R T O R I A L

make the participatory aspect as flexible as possible so parents can fulfill their co-op obligations without taking time off from work or having to spend hours in the classroom. As well, many preschool co-op programs offer limited hours. The organizational challenge of having a child in preschool for only two hours, two or three times a week, is simply not solvable for many working families. Instead they opt for full-time, five-day-a-week daycare. The result: preschools across the country have been closing. The Ontario childcare co-op movement flourished in the 1960s and 70s; by 1980 there were about 225 centres with a family membership. For the past five years, PCPC has operated with 60 to 65 member schools – down from 84 in previous years. Anywhere between 16 and 240 families participate in these schools.

“[A preschool is] either in the community, or there’s just no one around to support it because people won’t drive two hours to get to it, Bradley explains. “You’re going to go maybe 10 to 15 minutes in a car max to go to a cooperative. The bulk of people using a preschool are on their second or third child and they’re home on mat leave and want their two-and-a-half-year-old to go into a preschool setting.”

Why childcare co-ops are hard to establishLack of available locations and red tape are also deterrents for parents interested in organizing childcare co-ops. “It’s probably a two-year – at minimum – adventure for a group of families to pull it together,” says Bradley. “The paperwork, the hoops – and location, location, location.” Not only is finding an affordable site challenging but often landlords don’t want children or can’t have them in a formal way on the premises – as is the case with some churches and housing co-ops.

And parents interested in starting up a co-op preschool or daycare must fulfill licensing and health authority requirements, among other municipal regulations. Ontario’s Day Nurseries Act, for example, covers everything from broad building codes and fire safety standards to details pertaining to play space: Ontario operators must ensure there is “play activity space of at least 2.8 square metres of unobstructed floor space for each child” and levels “in each play activity room … of at least 55 dekalux” – a measure of illumination.

Additionally, parents must ensure safety requirements are met related to food equipment, change tables, cribs and cots, bedding and outdoor playground structures. As well, they must comply with human resource laws regarding staff qualifications. These are all desirable and important safeguards; however, gearing up to meet the sheer number of obligations can discourage busy families from trying to launch a childcare co-op.

Still, Bradley remains optimistic about the future of childcare co-ops. Many that she works with are 40 to 70 years old and are longstanding institutions in their communities. “I’ve seen the pendulum swing. I’ve seen some schools on the cusp of just closing down and then the next year they have enrollment of 40 or 80 families,” she says.

Activists are pushing for improvement in childcare facilities. Organizers behind B.C.’s $10aDay Childcare campaign have been holding stroller rallies, encouraging parents and their supporters to sign pledges and petitions to back their cause. Sharon Gregson, spokesperson for the organization, points to credit unions like Vancity (509,000 members and $18.6 billion in assets), which joined a growing list of organizations endorsing the $10aDay Childcare plan.

In the meantime, local working families must still grapple with few, expensive and irregular childcare choices.

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Entrepreneurs have a lot at stake when they launch a start-up – but credit unions have their backBy Sheldon Gordon Illustration By James Kaczman

Starting a small business is not for the faint of heart. In fact, a recent Industry Canada study found that nearly one-third of all small businesses don’t survive longer than two years and only half make it to the five-year mark. The truth of the matter is that the brave entrepreneurs who step into the marketplace need all the help they can get.

Credit unions can offer a leg up. That was the takeaway in May 2013, when the Canadian Federation of Independent Business (CFIB) issued a report showing that credit unions outperformed banks in meeting the financial needs of small- and medium-sized enterprises (SMEs). The 2013 results were based on survey responses from almost 13,000 SME owners. Overall, credit unions achieved the highest rating, 7.4 out of 10. They ranked first in three categories: financing (6), fees (7.5) and account manager (7.2). On service, credit unions scored 8.8. The results were consistent with findings in 2010 and will likely be consistent when the next report is issued. One reason for credit unions’ good report card? “The turnover of account managers is much lower


at the credit unions compared to the banks,” says Doug Bruce, CFIB vice president of research. “Credit unions are more stable in terms of having the same person dealing with the same clients. It’s not someone in the regional head office [of a bank] making a decision about someone they’ve never met. Face-to-face banking is much better for the client.”

Another consideration: Big banks tend to levy significant fees on everything from overdrafts to monthly maintenance of accounts. Credit unions have fewer and more cost-conscious fees by comparison. Then there’s the service factor. Credit union account managers see themselves as partners with the businesses they back and often go all out to promote and encourage their success.

Real people, of course, are behind all those glowing statistics. Here’s how five intrepid entrepreneurs across Canada experienced the credit union difference.

Fabricating successB&B Energy Services Ltd., Slavely, Alberta: This custom welding and fabricating company does structural and piping fabrication for the province’s oil patch. The business was established in 2011 by two experienced welders, Brent Schuler and Brad Keeley, along with their wives, DeCoda Schuler and Kim Keeley. The company now has 14 employees. “We’ve doubled our revenues each year,” says DeCoda Schuler, the secretary-treasurer. “Despite the downturn in the oil and gas sector, we’re as busy as ever. We’ve used it as an opportunity to diversify.” B&B is doing the structural expansion of the Lafarge cement plant at Exshaw, 80 kilometres west of Calgary, and is also serving agricultural clients.

When it incorporated, B&B became a member of Chinook Financial, where the owners already had personal accounts. Chinook Financial is now a part of Connect First Credit Union (100,000 members, $4 billion in assets). The company has a chequing account based on use – a way to keep the firm’s service charges down, says Susie Hunt, who became B&B’s account manager in mid-2013. Connect First also provides an authorized

overdraft, similar to a line of credit, except the borrower doesn’t have to pay interest on the amount it doesn’t use. “[That’s] especially important for a business that supports the oil industry since there’s usually a lag time of 60 to 90 days for payment of receivables,” says Hunt.

B&B also needs to make capital purchases from time to time. Knowing it has pre-approved financing up to an authorized limit means the firm can make a quick and advantageous deal to buy welding trucks or other equipment. Hunt makes on-site visits to B&B with paperwork that needs to be addressed. “They’re pretty busy and it can be tough for them to get away,” she says. “It gives me the opportunity to see what they’re doing and to understand their operations better. You get a feel for their drive and commitment.”

Supporting a media juggernauturbanicity, Hamilton, Ontario: Martinus Geleynse owns urbanicity, a local media empire that includes a full-service creative agency called urbanicity Omnimedia, as well as urbanicity magazine, a monthly tabloid about Hamilton people and issues. The magazine launched in May 2011 with $30,000 in pre-sold ads. The free publication, which has two full-time and three part-time employees, does a print run of 10,000 copies. Geleynse’s ad agency books space for advertisers in the magazine at a discount.

“Our rule was never to go to print unless we could do that profitably from Day One,” says Geleynse. “We had no idea what we were doing when we started. [But] as we’ve gone on, we’ve gotten more business savvy. We like to call ourselves a vertically integrated communications company.” Geleynse also owns web properties, an indoor billboard network and operates bus tours to other rust belt cities such as Pittsburgh and Detroit. He runs food festivals too.

Big banks tend to levy significant fees on everything from overdrafts to monthly maintenance of accounts. Credit unions have fewer and more cost-conscious fees by comparison


Geleynse left the Royal Bank of Canada for FirstOntario Credit Union (101,000 members, $2.6 billion in assets) when he launched the publication. His company maintains chequing and savings accounts and a line of credit with the financial services co-op. Andrew Mantecon, who has been at FirstOntario for six years and has a portfolio of over 100 businesses, became urbancity’s account manager a year ago.

“We present ourselves as not just their financial institution, but as their business partner,” he says. Case in point: FirstOntario sponsors an annual competition called the 1Awards, which highlights Hamilton’s top SME owners and awards cash and in-kind services to four winners. “Martinus was one of our first winners,” says Mantecon. “We’ve used him in a lot of our ads for the program. It’s created a lot of awareness for him. It’s been like a free ad campaign.”

As for FirstOntario’s service, Geleynse says, “They know me by name. They immediately take care of whatever we need. They care about our business more than anyone else has. Also, they’re based here in Hamilton. They’re proud supporters of the local community and that means a lot to us, because we’re hyper-local.”

Adventures in personalized serviceLocoLanding Adventure Park, Penticton, B.C.: LocoLanding, one of the top five theme parks in Western Canada based on attendance, generates 90 per cent of its yearly sales during 60 summer days. The facility in the Okanagan Valley was first built by Diana Stirling’s parents in 2001 as an 18-hole mini golf course. Stirling and her husband Dustin bought the 2.5-acre property in 2011 and turned it into a full-fledged theme park. From May to September, LocoLanding springs to life, with 57 teenage seasonal workers operating 10 attractions, including go-karts, bumper boats, a rock climbing wall and Jump Off, a free fall from a two-storey height onto a huge cushion. “We always try to be the first to bring in new attractions,” says Stirling.

In May 2014, Stirling moved her business account to Valley First Credit Union, a division of First West Credit Union (168,000 members, $6 billion in assets). Heather O’Coin, her business banking advisor, has worked for Valley First for 12 years and had actively pursued Stirling’s business. “The biggest impact [of joining Valley First] is the savings,” says Stirling. She says she writes lots of company cheques, adding that First West’s $20-per-month unlimited chequing account for business saves LocoLanding hundreds of dollars a month.

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In addition, Stirling liked the way the credit union highlights its members to Valley First followers on social media and is impressed with the credit union’s personalized service. And like Hunt does for B&B, O’Coin goes to Stirling when necessary. During busy 14-hour days, when Stirling didn’t have time to go to Valley First to sign documents, O’Coin brought them to her at LocoLanding. “They get our business,” says Stirling. “Their whole system is set up in such a way that we get what we need when we need it.”

Partners in expansionJohnson Waste Management Ltd., Winnipeg, Manitoba: This family business involves collecting and disposing of solid, non-hazardous waste for a range of clients. Its market includes Winnipeg and surrounding municipalities, along with Selkirk, Manitoba and Kenora, Ontario. Eric Johnson, a former top executive with the waste management firm BFI Canada Inc., started his own company with his sons, Jeff and Grant, in 1999. The waste-disposal market hasn’t changed much since then, but the company has achieved steady growth. “We have a strong footprint here in the Winnipeg marketplace, serving mainly the commercial [sector],” says Jeff Johnson, who adds that the 45-employee firm is one of the top three waste disposal and recycling companies in size.

Eric Johnson says that in 2002, he concluded that his company and Toronto Dominion Bank weren’t a great fit so he closed his account there and moved to Cambrian Credit Union (61,000 members, $3.1 billion in assets). The Johnsons wanted to expand, says Cambrian senior account manager Dave Lester, but the bank wasn’t comfortable increasing their loans. “It didn’t want to finance containers, only accounts receivable and trucks.”

“Susie Hunt, B&B’s account manager, makes in-house visits: “They’re pretty busy and it can be tough for them to get away ”

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Lester, impressed with the Johnsons’ detailed in-house financial statements and cash flow forecasts, put together a financing package for the firm – and he’s handled the account ever since. The continuity has been invaluable. “You don’t have new people coming in to learn your account,” says Jeff. “Dave knows us and we know Dave.” Johnson Waste Management takes advantage of several Cambrian products, including a line of credit and cash management services. As well, the firm has used term financing for various equipment purchases. “Some years, they borrow several million dollars for equipment, but the equipment always gets paid down,” says Lester.

The bottom line, says Jeff: “We do the work, we do the selling, but behind all that you need to have the peace of mind of solid financial backing. With Cambrian, it’s been very smooth.”

A high-value clientTime + Space Media, Halifax, Nova Scotia: In 1988, Donna Alteen spotted a market opportunity for independent media counsel in Nova Scotia. “There were ad agencies, but no media boutiques, no consulting firms helping clients identify their audiences and develop strategies,” she recalls. So, at the age of 27, she launched Time + Space Media. Her firm now has 26 employees, having grown by 15 per cent in the past five years. It generates revenues in the $3 million range, with annual growth of about five per cent. The majority of revenue is fee-based, derived from doing research and planning strategy for clients. On the media-buying side, traditional media still generates the majority of sales, but digital now accounts for 35 per cent of revenues.

Alteen’s agency originally banked with the Bank of Montreal, but it switched to Credit Union Atlantic (18,000 members, $370 million in assets). “We maintain high cash balances and we felt we didn’t need to be paying such high fees,” says Alteen. The firm has a $1 million line of credit and has financed the purchase of several buildings with CUA mortgages.

“They’re good members,” says account manager Paul Ryan. “They’ve been with us for almost 12 years. They use a full range of products. They use our online platform extensively and even do some wire transfers in the branch. They’re definitely in the top quartile. We would describe them as high value.”

Ryan inherited the account – one of 120 businesses in his portfolio – when he joined the credit union in December 2014. Having worked with tech start-ups for the previous five years, he has a familiarity with the digital industry. “I’m quite active in social media. That resonated with Donna when we met. She wasn’t used to that with a banker. I think there’s some value-added in that I’ve lived and breathed in the sector they’re in,” he says.

Alteen agrees. “The credit union has been a collaborative partner,” she says. “As we’ve grown, they’ve found ways to accommodate us.”

“Credit unions are more stable in terms of having the same person dealing with the same clients ... Face-to-face banking is much better for the client ” — Doug Bruce

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Is sideways the new up?Some career arcs have a distinct 21st-century trajectoryBy David Reilley

As recently as 20 years ago if you trained as an accountant, you probably stayed in accounting until retirement. The same applied to people who learned their skills at work: a decade on the job as a consumer loans officer was usually the start of a lifelong career track. If you needed to grow (or needed more income) you changed employers or moved up the ladder – but you stayed in the same field. Accountants became controllers and loans officers became credit managers.

Every now and then, though, an enterprising soul would move sideways, like Montrealer Mel Mikilachi, a professional engineer who became a high school math teacher. Even after Mikilachi established himself as an effective teacher, his move was still considered a little odd. Times – and attitudes – have changed.

Wins with sideways movesKataneh Sherkat is an executive recruiter at Western Management Consultants in Vancouver, with a background in financial-sector human resources. She says that in 2015 it’s not unusual to see career applications from people who want to move into a different field. More importantly, many employers are now prepared to look at what she calls out-of-the-box job candidates. “We’ve had some great wins with sideways moves,” she says. “I’ve seen accountants and lawyers win competitions for senior positions in operations. This didn’t used to happen.

“My favourite is a clean-tech company recruiting an engineer for business development,” she says. “I had an applicant with no background in engineering and no experience in the energy sector. He got his foot in the door when we learned he was so

passionate about green energy he’d used the Internet to become a self-taught expert. He won the job competition and today he’s the only non-engineer on the client’s business-development team. He’s doing really well.”

Aptitude and personality are keyAdrienne Bowers is a human resources advisor at British Columbia’s FirstWest Credit Union (168,000 members, $6.5 billion in assets). She says the credit union’s response to an employee thinking of a sideways career move is contingent on the aptitude and personality of the applicant.

“The situation is so individual,” she says. “The likelihood of success and our response in HR would all depend on who it is and their track record and their strengths. Our mission is always to try to find a good fit between people and jobs, and that’s how we would approach this.”

She says that many of the traits that make employees valuable to the credit union are independent of specific job skills. “If you’ve got someone who’s smart with lots of character [with] good people skills and a passion for the credit union model, then you want to keep them – to hang on to them and support them as they refocus their career,” says Bowers.

While some sideways moves enable credit union employees to find a new career path at their current employer, other choices – like the one Mikilachi made – mean the change of focus comes with a change in venue. But if you feel it’s time for a drastic shift, you might be surprised at the positive reception you could get.

iStockenterprise-magazine.com

November 2015 35

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For those who have bought in, data analytics is the new religion, one rooted in the power of numbers and the promise of clarity. Modern credit union executives know that advanced analytics can give them incredible insights. Understand the data and you suddenly know your members wants and needs a whole lot better. It’s a revolution in age-old marketing practices. But how to access this powerful tool? And how best to turn all those numbers into successful campaigns?

Embrace the dataFour years ago, Steinbach Credit Union (83,000 members, $4.4 billion in assets) teamed up with Environics Analytics, hoping it could help the credit union’s small marketing team to “work smarter, not harder,” says Stephanie West, a marketing generalist with the financial services co-op. Environics profiled three member-groups using demographics, lifestyles, social values and media. Armed with this detailed information, it conducted a direct mail campaign with highly personalized messages. The analytics firm then evaluated the results of the 2011 campaign and has since worked with SCU to fine-tune its targeting and messaging in 11 subsequent campaigns.

The collaboration involves using analytics after each campaign as well as before, with SCU’s marketing team tweaking subsequent drives to reflect what they’ve learned. “The analysis doesn’t just prove results or the bottom line. It really helps us to start thinking about the next campaign – how to target even better,” says West.

Start smallEach credit union should first ascertain how to make its data work to its advantage, given the resources it has on hand. “The first step is to evaluate what’s in your internal data that’s important to

you,” says West. Extracting the key information from the data is complex, however – and if it’s in the budget, West says she highly recommends getting outside expert help with the heavy lifting. Then, once you’ve determined your business objectives, launch a small analytics-based campaign, leveraging the data to help achieve your goals. Assess the effectiveness of the campaign before taking the next step.

Great expectationsData sets can be broken down so precisely that it’s now possible to target key micro-groups in exact area codes. Indeed, customers have come to expect a personalized approach. Today, it’s no longer about what the credit union wants to sell; it’s about what the customer wants to buy. “You want people to receive our campaign and think ‘This is exactly what I needed!’” says West.

To make analytics enhance marketing, credit unions need buy-in from the top. Managers need to champion data-driven thinking and share analytics initiatives and successes throughout the organization. Results will breed excitement, which will breed new ideas and opportunities.

Opportunity knocks“Going forward, analytics-driven organizations have the advantage because they’re making decisions based on insight versus instinct,” says West. So far, she says SCU has focused on using data analytics to drive larger marketing campaigns, but staff are increasingly using the information to craft various campaigns and projects. “Every year, we understand our members better and can define new opportunities.”

Diving into dataFinancial marketers are embracing the power of analytics By Sarah Brown | Illustration by Rod Filbrandt


Marketing Matters

Small business is big in Canada By Janet Gyenes

Illustration by Selena Popovic

State of the nation

Small biz is big in the west

1–5 employees micro business

1–99 employees small business

100–499 employees medium business

75 Percentage of all businesses in Canada with fewer than 10 employees

More than half of small businesses are distributed in 4 industries:

Wholesale trade + retail (18.8%)

Construction (11.7%)

(10.6%)Professional, scientific + technical services (11.6%)

Other services

Size matters

Alberta + Saskatchewan: Both provinces have more SMEs than the other provinces, with ratios of 50.3 and 47.8 per 1,000 pop., respectively

Ontario + Quebec: Ontario has the lowest ratio of SMEs nationwide, with 35.2 per 1,000 pop. Quebec has 36.6.But from 2008–2013, Ontario led the country in small business growth (8.6%), followed by Alberta (6.7%)

382,200Number of small businesses operating in B.C. (2013)

A snapshot of BC

98 Percentage of all businesses in B.C. (80% are in the service sector, similar to large biz at 79%)

81 Percentage of small businesses in B.C. with fewer than five employees

1,032,900 Number of people working in small businesses in B.C.

51% Half survive five years

150,000Average number of new small businesses created in Canada annually

Sources: Alberta Canada, ,BC Stats, Industry Canada

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