Credit unions are up in the air about data hosting
Transcription
Credit unions are up in the air about data hosting
The Voice of Canadian Credit Unions NOVEMBER 2012 JUNIOR BOARDS Bringin'g new energy to the table STAYING AFLOAT Baby boomers face a shadow of debt Credit unions are up in the air about data hosting ~? I. • I ~ IMPROVED INVESTMENT SOLUTIONS. SAME SIMPLE DECISION. -$- .............. . NEI is making changes to Select Portfolios to help you deliver stronger, more risk-mitigated investment solutions for your clients. Choose the investment so lution that's right for them in one simple investment decision. New capital protection via CVaR optimization Enhanced asset allocation designed to improve performance Access to top investment managers Convenience of one investment decision Unique in Canada, socially responsible and conventional options Ask your NEI sales representative for more details 1.888.809.3333 I NE I investments.com . Commiuions, tr.iiling commissions. managemenl fm and expenses all may be modattd wi1h mutual fund irwestments and the 1m of an ;um alloution mvice.Plm e md the prolpHtus of the mutual funds in which inmtment may be made under the amt allmtion mvict btlore inmiing. Hu111al funds m not gumnmd.1heir values change frequently and pm pnformance may not be repeattd. Nanhwm Funds, Ethical Fund1 and NEt lnmtmenu are rtgistmd marks and trademarlu owned by Northwrn & Ethial lnveitmenu LP. NORTHWESTNI FUNDS - ethical funds NEI SELECT PORTFOLIOS Enterprise I Enterprise is published by Central 1 Credit Union Editor Natal ie Bruckner-Menchelli Art Director CENTRAL 1 CREDI T UNION Rick Thibert Board of Directors Consulting Editor Chairperson Terry Enns Allison Murray Contributing Writers Jeff Bateman Vice-Chairperson Johanne Charbonneau Carol Crenna Adam Currie H.L. McGee Nick Rocke I Keith Brain Daniel Burns Rick Hoevenaa rs Sean Jackson Scott Kennedy Douglas Lang Emmet McGrath Philip Moore Pat rice Pratt Tracy Re dies Dave Sitaram Doug Stoddart Tama ra Vrooman Jack Whittaker Tiffany Sloan Guy Wilson-Roberts Contributing Artists Martin Barraud/Getty Vincent Besnault/Getty Evaan Kheraj istock Luc Latulippe Luis Montemayor/Getty Darrell Noakes Kudrin Ruslan/Veer Jesus Sanz/veer Production Manager Suzy Williamson Studio Manager Kristina Borys The opinions expressed in articles in Enterprise are the authors· and not necessarily those of Enterprise or Central i Credit Union. In addition, the inclusion of an advertisement does not imp ly 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 and Central 1 Credit Union disclaim any and all warranties, whether expressed or implied, includ ing (without limitation) any im pl ied wa rran ties of merc hantabi lity or fitness for a particular purpose and ne ithe r Enterprise nor Central l Credit Un ion will accept any responsibi lity for the reader's use of the information and/or opinions presented in Enterprise or any loss arising therefrom. Assistant Studio Manager Mandy Lau Production Coordinator Elaine Linsao Production Systems Manager Kim Mclane Advertising Production Allison Griffioen Mandy Lau Chris Sherwood Electronic Imaging Debbie Lynn Craig Bernhard Holzmann November 2012 :: Volume 72, Number 6 FEATURES Laura Michaels The contents of Enterprise are covered by copyright and al l rights are reserved. No material in this publicatio n may be re produ ce d in any form without permissio n. Fo r info rmation concerning Enterprise contact: Natalie Bruckner-Menchelli Canada Wide Media Limited 4th Floor, 4180 Lougheed Hwy. Burnaby BC, Canada Tel 604 299 7311 Fax 604 299 9188 ISS N 0319-8626 vSc 6A7 PM# 40065475 Send change of address notices and covers of undeliverable copies to circulation department: 4th Floor, 4180 Lougheed Hwy. Burnaby BC, Canada vsc 6A7 '"" Chairman, CEO Greg Pollock, president and CEO of Advocis To advertise in Enterprise, contact: Peter Legge "Nearly one in two Canadians are uncomfortable with basic arithmetic calculations. And if people have a natural fear of numeracy, then it's going to be very difficult for them to deal realistically with their finances no matter how young or old they are." Advertisingln[)tll[fJ] President Gary Davies Advertising In Print 896 Cambie Street Suite 200 Vancouver BC Canada v6B 2P6 For subscriptions, contact Tra cy McRitchie at [email protected] Subscription rates {in CON dollars): 13 Debt And The Silver Tsunami Baby boomers try to stay financially afloat as they dive into retirement. $28.00•/year (Canada): $34.95/year (USA): Tel Fax $39.95/year (Overseas). * plus applicable taxes 604 681 1811 604 681 0456 Jeff Bateman (_')A® Cover: Jes us Sanz JD%"v-' Environmental Benefits Statement FSC 91'••°'91>"F'<'m '~'"""'l0!'"""-auu_,~_,~ tMf""""""1 ... 011•=<•"""'b«•.."'4. 9,2SO fully grown www.fsc.org 74 20S kllog.-om• kllogr•m• ~"'k''""'"'~lm"'"· ""'"""',,....mx1o..Jnglho&MtoM><ot>I P•?t•~-Cok""""· f0<mottWom!.ttl:Jn•li>t~"""l"' "'"' """.M"'"'"'"" ,,.,_....., MIX Paper from responsible sources FSC' C014956 COFFEE BREAI( 18 Flocking To The Cloud A technology trend is taking the computer world by storm, but credit unions are treading very carefully. 24 TACT Climbing the corporate ladder might mean leaving friends behind. H.L. McGee Rise And Fall Of Green Mortgages HEALTH Natalie Bruckner-Menchelli 29 Junior Boards Some of credit unions' youngest members get ready to step up . Tiffany Sloan 6 Editorial 35 View From The Top Nick Rocket Lifting the lid on what it means to encourage sustainable behaviour. DEPARTMENTS 36 Facts On Fluids Uncovering the facts about coconut water, while keeping hydrated during the cooler winter months . Guy Wilson-Roberts 8 Small Talk 10 Person of Interest Healthy Growth A passionate teenager's dream led her on a journey of the human body. Carol Crenna 38 Marketing Maven Standing Out From The Crowd Enterprise speaks to the experts about the top fiv e marketing strategies for 2013 . Adam Currie NOVEMBER 2012 · ENTERPRISE 5 Editorial Have a better trip with the CUMIS Travel Insurance Program YOUR TURN Drop us a line and let us know how your credit union is responding to these upcoming Enterprise features: Person of Interest: Do you know someone who is connected to a credit union and has built his or her own business, pursued a dream, or has an unusual hobby or career? We would love to hear about them. Do your members travel more than twice a year? Offer the affordable and convenient 8-day multi-trip plan . Un iq uely designed to meet the needs of credit unio n members. For mo re information call 1-800-465-4279 cLm1s· 6 ENTERPRISE· NOVEMBER 2012 Troubled members? While the onus may be on the individual to seek help when they find themselves on the edge of a financial tailspin, is there something credit unions can do to help flag these members before it is too late? Are there measures in place to avoid sending someone down the foreclosure route? Is there more that can be done? We would love to hear from you. IT NEVER FAILS TO AMAZE ME how interesting people can be. When it comes to the individuals working in the credit union system, this statement has never been more true. In my short time in this sector I have encountered so many people who are willing to go above and beyond the call of duty to support the communities where they live and work. Take this month's Person of Interest. Lovie Wesolowski-Spicer had a dream and at the age of 17 she decided to pursue her passion to raise awareness about the benefits of natural health. As a result, there are countless people who have benefitted from her wealth of lmowledge - from NHL players to Olympians. And to think it all started the day she walked into a credit union that was willing to give this teenager a chance. Also in this issue, we span across the generations in "Debt and the Silver Tsunami" (page 13) and "Junior Boards" (page 29). We explore a problem that an increasing number of baby boomers are facingcarrying debt into retirement - and we tal<e a look at the new blood entering the sector as we speak to some credit unions that have introduced programs to attract the fresh ideas of Gen Y and get members involved at a young age. Our main feature looks at a subject matter that, while not new to the world of technology, is one that has many people on the edge of their seats ... cloud computing. The idea that you can use the Internet to store and process data remotely may seem a rather scary prospect as it appears so intangible, but the cost-savings that can be had by using this technology has some advocates claiming it is the future for credit unions. And of course, as we enter into this festive-season, we couldn't publish this issue without exploring what those few extra festive drinks could be doing to your body and how to prevent something that many of us may associate with summer, namely dehydration. That's not to say don't go out and enjoy yourself of course! As always, keep those emails corning in as we love hearing your feedback and your stories, and Happy Holidays. See you next year. Natalie Bruckner-Menchelli [email protected] Evaan Kheraj Building your business and your clients' wealth is our priority. Now your vision can become reality. At Credential, we' re empowering positive growth . credential.com Credential® Small Talk First in customer service For the eighth consecutive year, Canadians ranked credit unions first in overall "Customer Service Excellence" for retail banking among all financial institutions in the lpsos Reid 2012 Best Banking Awards. Credit unions also took top honours in "Branch Service Excellence" for the eighth year in a row and "Values My Business" forthe fifth consecutive year. Swipe and go Awareness of the "mobile wallet" is increasing among users of mobile banking apps, according to research from Toronto-based Solutions Research Group, conducted as part of its ongoing Digital Life Canada study. The research found that 56 percent of -""1i!s.:;....,,,_._,,=r"7, users of mobile banking apps are aware of c:>- an upcoming service that would allow them 1· -<5 to swipe their phone to pay for goods and services at check-out counters. That figure is up from 47 percent a year earlier. ~ 7 .Jc.. <;(" r( c 'c C- - r r - "Have you given much thought to what kind of job you want after you retire?" Your Financial Toolkit has been divided CEOs to ratire ._ customers online and through a handful of Cafes - it has no brick and mortar branches. John Lahey, CEO of Ontario's Alterna Savings into 11 modules that cover a variety of topics and Credit Union, Les Messmer, CEO of from banking, budgeting and saving to Saskatchewan's Synergy Credit Union, and Brian debt management, fraud protection and Bentley, CEO of lntegris Credit Union, are retiring. retirement planning. Lahey and Messmer will retire at the end of the has been designed by the Financial Consumer DIRECT will continue to operate as its own brand. year and Bentley will be retiring in June 2013. Agency of Canada (FCAC). the Investor The transaction is expected to close by the end Education Fund (IEF). and l'Autorite des of this year, subject to regulatory approvals. Your Financial Toolkit Post job ads here I Marches financiers (AMF) and is available The national credit union careers website free of charge on line at the FCAC website. creditunioncareers.ca has launched its new, re- ING DIRECT customers wi ll not be affected by the purchase as on line account numbers and passwords will remain unchanged. Initially, ING Satisfaction not alwl)'Ji guaranteed Overall customer satisfaction with the Big 5 vamped, self-service employer site. The site's new Scotiabank to purchase ING DIRECT Banks (and mid-size banks) has fallen this year, features help speed up the recruitment process Bank of Nova Scotia (Scotiabank) reached a according to the J.D. Power and Associates as credit unions can now manage their postings definitive agreement to purchase ING Bank of 2012 creditunioncareers.ca Canada (ING DIRECT) from Netherlands-based independently. This year, helped credit unions fill more than 400 jobs. parent ING Group for $3.1 billion - in cash . The purchase is expected to result in a Canadian Retail Banking Customer Satisfaction Study. Th e decline is attributed largely to a drop in fee satisfaction, with 27 percent of customers Your financ.i•I toolkit net investment by Scotiabank of approximately experiencing changes to their fee structures The Government of Canada has released a new $1.9 billion after deducting the excess capital in 2012, compared to 17 percent in 2011. resource, which includes videos, checklists, currently at ING DIRECT. quizzes, reference materials and self-assessment In Canada, ING DIRECT is the eighth largest While online banking was shown to have increased to 86 percent from So percent in 2010, tools to help Canadians make better-informed bank. It offers savings and chequing accounts, the study found that branch locations continue financial decisions. mortgages and mutual funds to its 1.8 million to be an important driver of satisfaction. ~ 8 ENTERPRISE· NOVEMBER 2012 ©Barbara Smaller/The New Yorker Collection/www.cartoonbank.com l l Accelerate 1avments with lnrerac® Online. Improve your customers ' experience by offering the convenience and security of lnterac Online Payment. Then improve your own. You may attract new payments from lnterac Debit customers, while also reducing your costs with fees that may be cheaper than credit. Speak to your acquirer about acceptance. Or to learn more and download the lnterac Online Merchant Guide, visit interaconline.ca. ® lnterac =11 l 1mi!.!I lnterac, the lnterac logo, "Everyday Simply" and the armoured truck design are trade -marks of lnterac Inc. Used under license . Everyday Simply"' HW Person of Interest Healthy Growth A passionate teenager's dream led her on a journey of the human body by Carol Crenna » photography by Darrell Noakes ''I have fond memories ofworldngwith health industry legends, such as renowned orthomolecular WHEN A HIGH SCHOOL student walked into a Saskatoon credit union saying that she needed financial help to launch a business never before attempted in Canada, the lenders didn't flinch and granted the teenager a $21,000 loan. That was in 1977, when Lovie Wesolowski-Spicer took a series of daring steps to realize her dream of opening a health store. With the loan from St. Mary's Credit Union (now part of Affinity Credit Union) and help from her brothers and parents, who co-signed the loan, plus an additional seven thousand dollars that her brothers chipped in, Lovie opened Nature's Health Centre in Grosvenor Park Shopping Centre, Saskatoon. How could they have !mown that this ambitious 17-year-old would not only maintain that business in the same location for more than three decades, but also become a health and performance-nutrition pioneer? "I was fascinated by the human body at an early age and, although we were poor, I would ask for models or colouring books of the organs and systems whenever I was offered a gift," says Lovie. "With the money I earned by playing the violin as an eight-year-old, I would buy health books. Our family physician kept telling my parents about my affinity for healing, saying he conversed with me like a colleague when I was in my adolescence." BegiMing the journey Chronic bronchial problems propelled Lovie on a personal healing journey. She became aware of the foods that made her feel unwell and began exploring natural remedies. "I innately knew what was right and wrong for my body chemistry. I stopped eating milk products and meat in grade two." Lovie was 18 when her store opened with a business model and booldceeping system that she had developed in her grnde 12 business class (and still uses today). "There was no template for this type of store. I wrote to each manufacturer explaining how I needed catalogues of products. My strength is in chemistry- choosing product ingTedients that are the best [and] most effective, regardless of brand." Lovie says she built Reaching peak fitness advised Canadian Olympic bobsledder Jamie Cruickshank and professional superbike racer Brett McCormick. Today, she works with NHL players Devin Setoguchi (Minnesota Wild) and Luke Schenn (Philadelphia Flyers). Lovie helped both increase their bodies' muscle-to-fat ratio as teenagers, preparing them to play in the NHL. In 2004, former Saskatoon Blades general manager Brent McEwen approached Lovie. "The team had been last even though they had Mike Green, Wacey Rabbit and Devin Setoguchi, who later became some ofNHL's highest paid players," says Lovie. She began worldngdirectly with 33 on-ice players and 28 prospects, creating individual off-season programs. As a result, in a single off-season, the average muscle gain per player was 22 pounds, and speed and endurance gains were "extraordinary," says Lovie. Now a Registered Nutritional Consultant (RNC), Certified Natural Health Practitioner (CNHP), and an International Sports Sciences Association (ISSA) specialist in sports nutrition, Lovie has lectured to national audiences, and works with the University of Saskatchewan's department of medicine and its medical students. In the same year as she opened the store, Lovie launched Performance Nutrition Inc., a consulting company, and over the past 30 years she has worked with many famous athletes. They include NHL players, Calgary Stampeders, Saskatoon Blades, and University of Saskatchewan Husldes. She quicldy recounts notable names: Charles Servizio, in the Guinness World Records for the most push ups (46,001 in 24 hours), was trained by her; former NHL player turned Winnipeg Jets general manager, Kevin Cheveldayoff, has been a client since he played in the juniors; trainer-to-the-stars Grant Roberts, who worked with Hilary Swank on the film Million Dollar Baby, was a customer at Lovie's store when he was 15, and was later coached by her. In fact, the list of names goes on. Owner of Bliss New York Spa, Marcia Kilgore, whose client list includes actress Julia Roberts, worked for Lovie and continued getting advice while opening her business. Lovie also Lovie still banks exclusively with Affinity Credit Union, has a mortgage with the financial services cooperative and invests in its ethical funds program. "I have grnwn up with its staff, and even though my store is across the city from that location, I never left them because of who they are: a community of real people," says Lovie. Lovie is also a District Council Delegate at Affinity Credit Union. "When I was able, I wanted to help others. With my experience, I know that if you let something small germinate it will grow into something big," she says. Now in her sos, she still manages the store and consults onsite. When asked what keeps her motivated, even after raising eighteenyear-old twins, she says; "There was never any choice. I am where I needed to be. I still feel 17, having the same passion and living by the same philosophies."!;; relationships with customers by giving free health consultations to pelp them understand why they needed certain products. While she was opening Nature's Health Centre, Lovie began working as a sports nutrition coach, using her body-building brother as a guinea pig. "I felt if! can help people who are sick, can you imagine what I could do with people who are well?" As for her brother, his lean body mass increased so much that "many athletes took notice and wanted to know his secret," she says. Living by the same philosophies pioneer Dr.Abram Hoffer and Order ofCanada recipient and paediatric expert Dr.john Gerrard." NOVEMBER 2012 • ENTERPRISE 11 If only shopping for a first home was this easy... With a little help from Genworth Canada, shopping for a first home doesn't have to be complicated. We understand the importance of owning a home and having the information your members need to make smart homeownership choices. Our promise is to help them with homebuying basics such as understanding down payment options, maintaining good credit and staying on budget. Find us on Facebook! Visit Genw orthsmartshopper.ca for tips and resources to help ach ieve homeownership dreams. ...~t~. . Genworth 'l,t~ Canada The Homeownership Company © 201 2 Genworth Financial, Inc. Baby boomers try to stay financially afloat as they dive into retirement DEBT IS CASTING According to Statistics Canada, approximately 1,300 Canadians will turn 65 every day for the next 20 years. 14 ENTERPRISE • NOVEMBER 2012 hat's a sharp poke in the eye to conventional wisdom, which dictates that while the young and middle-aged have plenty of time to recoup, retirees must enter life's homestretch with zero debt and a nicely diversified portfolio. "Twentyyears ago, it was a bigdeal to see someone contemplate retirement without having their house paid off," notes David Mortimer, senior vice-president of retail banking at the $2.4-billion Cambrian Credit Union in Winnipeg. "Today that situation is more the norm than an anomaly," he says. "On an anecdotal level, we're seeing more members figuring out ways to retire or semiretire while carrying real consumer debt - a mortgage, a line of credit, an outstanding car loan or credit card debt. There's quite a bit of creativity in how people are coping and times have definitely changed." T What has been nicknamed by the media as the "silver tsunami" - a term used to describe the retirement of baby boomers - has begun in earnest. According to the medium-grnwth scenario of the most recent population proj ections of Statistics Canada, approximately 1,300 Canadians will tum 65 every day for the next 20 years. And it now appears that debt will be a fact oflife for a good percentage of them. While the Harris/Decima poll didn't quantify debt levels, a spring 2011 Statistics Canada study revealed that 17 percent ofretired debtors are in hock for more than $100,000, while a quarter owe less than $s,ooo. The median debt level was pegged at $19,000. Statistics Canada also found that 40 percent of Canadian retirees were in debt 18 months ago, not so bad compared with the unprecedented six-in-ten identified in the July Harris/Decima survey. "If the numbers are accurate that's a huge increase in a very short period," notes Greg Pollock, president and CEO of Advocis, the Financial Advisors Association of Canada. "[The jump indicated in the study] is too much to attribute to a mild recession," says Pollock. "Other factors are clearly operating here. People are developing more risk tolerance, often of necessity but also perhaps inadvisably so. A rise in interest rates will happen eventually and then we're going to see all the worst-case bankruptcies and foreclosures. I wouldn't say I'm alarmed about all this but it is definitely cause for concern." Travis Koivula, an investment adviser with the $i.4-billion Island Savings Credit Union on Vancouver Island, confirms that the findings are about right from his perspective. "We're seeing a lot more people retiringwith debt, especially those with pensions since they can work it off against a guaranteed income. These people are usually pretty smart around consumer debt and pay down their expenditures quickly," he says. "Other members on a fixed income are more at risk if, and when, the fiscal environment changes. I threw my crystal ball out a long time ago, so my best advice is to be prepared and get your financial house istock \ ria in order as best you can and as soon as possible," he says. reinventing everything their parents did and now they're busyreinventingretirement," says Mccurdy, author of How Much Is Enough:Bal- Fear of numeracy as boomers reinvent retirement ancing Today's Needs With Tomorrow's Retirement Goals. "I think they've always felt that A myriad of factors have combined to create more debt, explains Pollock, who was one of 13 members enlisted in 2009 by Minister of Finance Jim Flaherty to participate in the federal government's Task Force on Financial Literacy (see page 16 in the March 2011 issue ofEnte1prise). "We identified two key issues: increasing debt levels and decreasing saving rates among Canadians of all ages and kinds. We did not focus specifically on retired seniors, but the warning signs are all there," Pollock says. The Task Force reported that the ratio of household debt to disposable income in Canada has risen from 80 percent in 1990 to 148 percent in 2010. Latest data from Statistics Canada shows that ratio climbed in the first quarter of 2012 to a peak of 152 percent. As a result, some Canadians are increasingly vulnerable to major economic shifts as well as to more personal issues, includingjob loss, divorce, illness and disability. "We found that far too many Canadians lack the necessary skills and knowledge to make informed financial decisions," notes Pollock, who represents 11,000 financial advisers and planners across the country. "Nearly one in two Canadians are uncomfortable with basic arithmetic calculations. And if people have a natural fear of numeracy, then it's going to be very difficult for them to deal realistically with their finances no matter how young or old they are." Sky-high housing prices combined with low-borrowing rates are certainly a defining factor in the debt load. A more capricious attitude to spending and savings is also a generational benchmark for the latest and largest wave of retirees in Canadian history, explains Vancouver-based financial planner Diane Mccurdy. "The boomers have spent their lives they were forever young. As we're constantly reminded, the new 65 is 50 or lower. And if you hear that enough, you start to believe it. Unfortunately, what happens is that people suddenly turn 65 and discover that age has caught up with them," she says. "And many realize they haven't done the kind offinancial planning they should and could have." Mccurdy describes the boomers as "the most fortunate generation in history, and they like it that way. They enjoy their lifestyle, they like heading off on two and sometimes three vacations a year and they're not keen to give anything up. They think they're younger, they want to retire younger and yet the fact is that many people are living longer, which they're thrilled about and yet longevity is bringing up issues around whether or not they'll outlive their money." Good intentions and bad timing are also at the root of the problem, states Cambrian's Mortimer. "Many folks acquired a good portion of their debt pre-2009 when real estate values were very strong and the economy was still somewhat robust in this country. Since then the market has been volatile and low interest rates mean minimal returns for anyone with fixed-income investments. They either had their own mortgages or had tal<en equity out of their own homes to help their kids get into the market. As a result, some good people got themselves into a difficult situation. Some were na'ive, but many were unwitting victims of circumstances over a short period of time." We help credit union leaders make sustainabl e, differentiated improvements in the performance of their organization s. Are you compliant with Ontario's By-law#5? Call us for support today. Working with credit unions from coast-to-coast, we offer a full range of governance assessment and development services. g ll )ur :ing d ms P's nd r: Long-term planning The Task Force on Financial Literacy concluded that while seniors are adept at maldng ends meet month-to-month, they struggle to varying degrees with long-term planning. Financial advisers must first convince more NOVEMBER 2012 • ENTERPRISE 15 • OC<lll to the A technology trend is taking the computer world by storm, but credit unions are treading very carefully BY NICK ROCKEL 18 ENTERPRISE · NOVEMBER 2012 cott Ferguson sometimes ventures out into the cloud, but he's careful where he steps. As vice-president, information systems, at Libro Financial Group, Ferguson oversees all thecomputingservicesofthe $i.6-billion credit union in London, Ontario. Ferguson says Li bro, which brought its banking system in-house in 1999, has a strong tradition of developing its own technology. But when his 24-member team has a problem, it's open to outside solutions. Over the past few years Libro has made more use of cloud computing. This technology consists of resources, such as software and data storage, delivered as a service via the Internet or another network. "Cloud has advantages if you find the right application for it," says Ferguson, who consciously avoids the term because he finds it vague. "But just because it's new and it's called 'cloud' doesn't mean everything needs to be there." Although it's unclear who coined the phrase cloud computing, one popular theory of its origin is that people have long used cloud symbols to diagTam the Internet and other computer networks. The U.S. government's National Institute of Standards and Technology (NIST) defines it as "a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources." NIST breal<s cloud computing down into three service models - software, platform and infrastructure - and four deployment models: private, community, public and hybrid. Libro uses a hybrid of private and public cloud services - the latter are shared with other users. On the private side, the organization began virtualizing its onsite servers two years ago through solution provider VMware. Ferguson says Libro can get a better return on investment for each physical server by creating several operating systems on a single platform on the cloud. Mixed success Libro has had mixed success with the public cloud, according to Ferguson. Earlier this year, it started using ScientiaMobile, a software service that detects which devices members are using for mobile banking. Ferguson says that while Li bro had attempted to create its own table for tracking devices, it would be tough to keep the list up-to-date, and so the credit union handed the detection service over to ScientiaMobile. But things didn't go so well in 2011 when Libro turned over deployment of a video-heavy promotional website to a host on the cloud. Doing so was cheap and easy, Ferguson recalls, but during the six months thatLibro ran the site, hackers breached it twice. Luckily, there was no member information at stal<e. Jesus Sanz ADT Business Solutions is now Integrated Security Your business security will never look sha r When you have a challenging security issue, you need to see it solved quickly. That's why you needTyco Integrated Security. We are the industry leader in commercial security, with world -class monitoring centres and hundreds of qualified technicians in Canada. But what really separates us is our personal passion for helping you protect your business. As your security provider, we'll help you create powerful, intuitive security solutions that are customized just for you. We'll show you the future of security, so you can focus on the future of your busin ess. That's sharper thinking. Access Control • Intrusion 1.800.2.TYCO.IS • • Video • Monitoring www.TycolS .ca © 2012Tyco Integrated Security. All Rights Reserved . Tyco and Tyco Integrated Security are marks and/or registered marks. Unauthorized use is strictly prohibited. For licensing information please visit www.TycolS .ca. _J Although Ferguson thinks some services are probably highly secure, Libro is selective about what it puts on public clouds. "The question is, 'What are you trying to protect?"' he says, noting that Li bro wants its members to feel safe and secure when they bank. "I'm not sure if they would have that same sense of security if they thought that all of their financial data was somewhere out on a [public] cloud," he says. Gaining mainstream acceptance An obscure technology as recently as 2008, cloud computing has rapidly gained mainstream acceptance. "Probably the largest thing that has driven cloud, certainly among SMBs and possibly among credit unions, would be the consumerization ofIT," says David Senf, progrnm vice-president in the infrastructure solutions grnup at market intelligence firm me Canada. Senf points to the explosion in consumer use of public cloud offerings such as Face book and Gmail. "That kind of usage has had an impact on the willingness of an organization at large to start to investigate these services because we've just become more comfortable with them and familiar with them." There are three main kinds of cloud service. One is infrastructure as a service (IaaS), or access to hardware, such as servers and storage. The second is platform as a service (PaaS)a computing platform minus the software and the third is software as a service (Saas). All three could be located anywhere, notes Albert Silverman, a Toront.o -based senior vice-president in the consulting practice at PricewaterhouseCoopers. Two advantages of cloud computing over traditional IT are that it's pay-per-use and can be quicldy scaled up or down. For example, users of Salesforce.com, a popular customer relationship management (CRM) software-asa-service tool, can effortlessly add or subtract licences as needed. Canada treads cautiously Large or small, credit unions cannot ignore cloud computing. Its potential benefits include cost savings and more time to innovate. But if Canada lags in embracing the cloud, its Jesus Sanz financial institutions have been even slower than other sectors. That's partly because credit unions worry about threats to the privacy and security of their members' information. In spite of those risks, credit unions that don't use cloud services could soon be a rarity. "For cloud computing, it's not a question of'if.' It's a question of'when,"' says PwC's Silverman. "In the next five years, every credit union in Canada will be using cloud services of some sort or another and you need to understand how to use those services. You have to have a plan, a strategy.'' But Canadian organizations haven't rushed into cloud computing, at least not compared to their American counterparts. In a 2011 survey for Microsoft Canada of about 700 business and government leaders, Leger Marketing found that just 29 percent ofrespondents' organizations were using or considering the cloud. When California-based Advanced Micro Devices Inc. conducted a similar poll across the border last year, the number was nearly 75 percent. Canadians are being prudent, one expert contends. "Financial institutions and Canadian businesses generally are moving very cautiously to cloud computing. Not because they don't understand it but because I think they do understand it," says Bradley Freedman, partner and technology practice leader at the Vancouver office oflaw firm Borden Ladner Gervais. "And they understand that the compelling business benefits that can be presented by cloud computing have to be weighed against t11e costs and the risks," adds Freedman, whose clients include financial institutions and cloud services providers. Senf at me Canada says he's seeing an uptal<e of private and public cloud usage among financial institutions. Yet they've shown less enthusiasm than other industries - a trend shared with the public sector due to concerns over security and regulatory compliance. But that won't last, Toronto-based Senf predicts. "As they start to peel apart what data it is that can easily, safely make its way into the cloud from the data that needs to stay on [premises], then we're going to see even more grnwth within the financial services sector," he says. "So even though they've been slower to adopt, they're going to be showing stronger adoption over the next three years." Risk and privacy concerns Mindful of security and compliance, many large banks and insurers only use private clouds. As midmarket organizations, credit unions find themselves in the tough spot of being hypersensitive to those matters butlacking the resources to manage them t11e way big financial institutions can, says Senf. "For [credit unions], it starts to mal<e more sense from a cost-savings perspective and from an agility perspective to focus on things like public cloud. " B.C.'s Integris Credit Union is one credit union that is being very careful when it comes to adopting cloud computing. It's simply too risky, says Bryan Simon, information security officer at the $497-million organization. Integris has done virtualization privately since 2004. Simon prefers not to label this practice cloud computing, but he says it uses the same technology as public cloud services. For Integris, one of the biggest problems with public cloud providers is the locations of their data servers. These might be in the U.S., for example, or the provider may even shift operations outside Nort11 America at certain times of day to save on electricity. In Canada, the rules governing where NOVEMBER 2012 • ENTERPRISE 21 RISE AND FALL OF s the trend toward 'gTeener' more energy-efficient homes continues and homebuyers seek to reduce their carbon footprint and save on utility bills, financial institutions are looking for ways to cater to the · needs of mortgage owners. One movement seen across Canada, to gTeater or lesser degrees as a result of this new way of thinking, was the introduction of the gTeen mortgage. This idea started around the time of the Government of Canada's ecoENERGY Efficiency for Housing program in 2007 and built up momentum with the extension of the ecoENERGYRetrofitHomesprogmm, which was part of the federal government's Economic Action Plan. This program provided tax breaks to Canadians who retrofitted homes with energy-saving technologies. In turn, the green mortgage was introduced in Canada to cover the construction of new energy-efficient homes, as well as the retrofitting of existing structures. Benefits included anything from cash rebates on the mortgage to a one percent discount on the posted lending rate. Among the credit unions that introduced these mortgages were Vancouver City Saving·s Credit Union (Vancity), with the Climate Change Mortgage, and Desjardins Group, which offered a green mortgage. Today, nearly a year after the federal government closed the ecoENERGY Home Retrofit Program, are green mortgages still on offer? According to credit union consultant W. Robert Hall, who works closely with the Filene Research Institute, the practice of green mortgages is alive and well in credit unions across Canada. However, scour the Internet or search for green mortgages currently on offer by Canadian credit unions and Hall's statement doesn't appear to be supported. The reason, according to Nicolas Frechette, senior adviser at Desjardins Group, is the low interest rate. "Interest rates have plummeted to an all-time low. It becomes harder to give incentives when interest rates are that low," he says. Green mortgage evolution This isn't the only reason, it seems. Tania Goodine, vice-president of brand at the $1.6-billion Libro Financial Group, says that while the organization supports the idea of green mortgages, products are developed to meet member demand and because they make sense from the financial institution's point of view. "Simplicity is important to Libra. To this point, we have found ourselves unable to develop a simple, fair 1 measureable and manageable definition of 'green.' Energy efficient relative to what? What about 'reusing' an existing home rather than building new? I'm not sure if there's a future for green mortgages." This opinion is shared by a number of credit unions. William Azaroff, director of business and community development at Vancity, agrees that the idea has evolved. "There is an outdated perception on green mortgages. Our vision is much more than just being 'green.' Our model of sustainable banking includes the social, environmental and financial well-being of our members," he explains. Azaroff adds that the biggest challenge in offering a "niche product," like a green mortgage, is that it can be alienating. He gives the Clean Air Auto Loan as an example. This loan offered preferred rates for low-emission transport. "The problem was trying to get consumers to vote with loan dollars . Auto insurers started to offer better rates than we could offer. The demand was low; we couldn't compete." BY NATALIE BRUCKNER-MENCHELLI Martin Barraud NOVEMBER 2012 • ENTERPRISE 25 Assu rance Accounting Tax Advisory www.bdo.ca J J J BOO Canada LLP, a Canadian limited liability partnershi p, is a member of BOO International Limited, a UK company limited by guarantee, and forms part of the international BOO network of independent member firms. BOO is the brand name fo r the BOO network and for each of the BOO Member Firms. IBDO B OA R D s As directors step down, some of credit unions' youngest members are getting ready TO STEP UP! BY TIFFANY SLOAN the average credit union board is stacked primarily with men over the age of 50, then junior board programs - generally comprised of youth, mostly women, under 25- are a welcome source of new blood. Across Canada, credit unions are inviting young people into their boardrooms in the hope of engaging them and keeping their finger on the pulse of Gen Y, while cultivating the interest, understanding and competency of the next generation of credit union leaders. While junior board progrnms are few and far between, advocates say the long-term benefits are invaluable to the succession-planning crisis looming in the credit union system. In a timely report produced this year, titled Corporate Governance in Canadian and U.S. Credit Unions, the Filene Research Institute and Credit Union Central of Canada found that credit unions are successfully attracting only as many board candidates as there are vacancies, making the election process far from competitive. Moreover, only 29 percent of board members in Canadian credit unions are women and a mere six percent are under the age of 35, according to the report. Kudrin Ruslan NOVEMBER 2012 · ENTERPRISE 29 "The Youth Council is preparing the next generation of board members for the credit union as a whole." - Matthew Cormier, Youth Council chair at Bergengren Credit Union post-secondary education this fall, with both expressing interest in joining a credit union board as a regular director down the road. And Sandhills' junior director Amy Nixon, 17, says she not only understood more than she thought she would in the meetings, but that joining the board "won [her] over to business." She now plans to take a commerce degree. "I didn't think I was that interested in it, but the experience has introduced a new perspective,'' she says. Reengaging younger members With the goal of improving representation of the under-35 demogrnphic on its b'oard of directors, the $202-million Bergengren Credit Union inAntigonish, Nova Scotia, chose to tal<e the idea one step farther. In 2010, the credit union introduced a separate Youth Council, comprised of 10 members between the ages of 16 and 25. The chair of the BE ALL YOU CAN BE ••• WITH CENTRAL FORMS PRINT MANAGEMENT V.l.P CENTRAL FORMS print management 8315 Riverbend Court Burnaby I British Columbia I Canada I V3N 5E7 [email protected] Central Forms Print Management VIP (Va riable Information Printing) helps increase your returnon-investment w ith marketing campaigns that are targeted to an ind ividual recipient. Using the variable data capabi lities of Central Forms VIP along with our state of the art digital presses, allows each piece you produce to be unique whi le del ivering a consistent message. By personalizing the text and imagery on your marketing pieces, you wi ll engage your recipients on a deeper level. Our team of experts can help you develop a personalized campa ign - all you need is information about _ ~ your audience and you're on yo ur way to better ROI for your marketin'g dol lar-,- parallel board sits on Bergengren's board as a non-voting director. At BergengTen, about 30 percent of its 14,000-plus members are under the age of 25. While the credit union has a strong elementary school deposit program, account activity tends to drop dramatically after the age of 12, explains youth coordinator Elaine MacDonald. The Youth Council aims to reengage those members, reminding them of the products and services available to them, while nurturing an understanding of the cooperative philosophy and creating leadership opportunities for them within the community. The council's first two years have been busy. Initiatives have included a video contest in support of the United Nations International Year of Cooperatives, high school presentations on financial literacy, and ongoing social media campaigns - and Bergengren is happy with the results. While the credit union wasn't sure what kind of uptal<e it would get from the young people in the community, it was impressed by the number and calibre of applicants, says MacDonald. "They are the future of our credit union. The idea of empowering them and engaging them early, I think for us, has been a huge success." Moreover, council chair Matthew Cormier, 18, and other Youth Council members are well aware of the potential impact that a rural grassroots movement can have on a global scale. "The Youth Council is preparing the next generation of board members for the credit union as a whole," says Cormier confidently. "When [current directors] leave, there will be no shortage of fresh faces and new ideas."~ I a-a-aa-aaaaaaa aaaaaaaaa• ••aaaaaa••• an aci 32 ENTERPRISE· NOVEMBER 2012 istock ~ , . Structured 1 Retail Products.com The Americas ' Structured Products Awards 2012 BEST SALES IN CANADA (OVERALL) BEST SALES IN CANADA GIC'S UNLIMITED OPPORTUNITIES AHEAD OF YOU. A WHOLE TEAM BEHIND YOU. 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INDEX- LINKED GUARANTEED INVESTMENTS Gwendolyn De Guzman Se nior Director, Partnerships Desjardins Investments Inc. 1-877 -35 3-8686 , ext. 20 06 gwendo lyn.deg [email protected] • Desjardins Cooperating in building the future COFFEE BREA ( Tact by H.L. McGee Sometimes climbing the corporate ladder means leaving friends behind View From The Top THAT HARD-WON PROMOTION is finally yours, and it's time for celebratory drinks at the pub Friday after work with the whole gang. But when you step into work on Monday morning, it feels like you've crossed to the other side - the same people who were your friends and peers last week are now your direct reports. But does putting on the boss's hat have to change your relationship with your co-workers? "Yes, it does, and you can't pretend otherwise," says HR consultant Roberta Matuson, author of Suddenly in Charge: Managing Up, Managing Down, Succeeding All Around. According to Matuson, many newly promoted managers go into denial, "but you need to recognize that you're no longer one of the gang - and you need to find a new gang." Matuson recommends a forthright approach: begin with a frank, one-on-one conversation with each of your co-workers. "Let them know that, from here on out, whatever is said to you is said to you as their supervisor, no longer as their friend . And whatever they shared with you in the past will stay in the past." Speak up. Unfortunately, you may find that not everyone is on board with your new role. Some of your co-workers might not think you're the best person for the job, or they may have thought they were in line for the job themselves. The key, says Matuson, is to call them on it and address their attitude right away, rather than allowing it to be the elephant in the room. Let them know you're aware that they don't agree with the decision, but you're relying on their professionalism and support going forward - and if that's not something they Vincent Besnault/getty, istock can commit to, they should speak up . If the option is available you can help them transfer to another department. "When you're inexperienced, you don't want to have those conversations because they feel like conflict," says Matuson, who has helped leaders in Fortune 500 companies. "But it's really something you have to do in order to start out strong." That's not to say that you need to rule with an iron fist and stamp out all dissenting opinions. "Remember that people need to vent," says Sharon McMahon, vice-president of human resources at Winnipeg-based Assiniboine Credit Union. McMahon adds that you'll never prevent people from ever disagreeing with you, so tap into those opinions as constructive feedback. Hold team meetings as a forum for your co-workers to share their thoughts, and take their input into account. Managing perceptions. "As a leader, you don't necessarily need to be the resident expert, but you need to be able to leverage your team's expertise, and acknowledge and respect it," says McMahon. In fact, she adds, "I see a leader as working for his or her direct reports, rather than the other way around. It's our role to be there to support them." As you transition into your new role, bear in mind the importance of managing perception, she adds. "It can be challenging for your co-workers if they perceive favouritism. Even if you're not doing anything unfair, it's real to them." Gaining credibility takes time. Some friendships will survive a promotion, while others won't. Let your guiding principle be the good of the team . "There are times when you need to release a friend, and that's the hard facts of business sometimes," acknowledges McMahon.!!. FIVE qualities of an effective manager, according to Roberta Matuson 1. BE A STRONG COMMUNICATOR Communicate with your team so they always know where they stand. 2. BE TRUSTWORTHY Demonstrate to your colleagues that you always have their best interest in mind. 3. BE HUMBLE Shine the light on others so they get the credit they are due. 4. BE COMPASSIONATE Give individuals the flexibility they need to handle personal issues that will arise. 5. HAVE A SENSE OF HUMOUR Don't be too serious. Allow people to have fun at work. NOVEMBER 2012 ·ENTERPRISE 35 Health Facts On ARE YOU SUFFERING FROM fatigue and tension keep you hydrated . Most fluids , including nutritional cont ent of its coconut water. at work, or having difficulty concentrating? milk and juice or even tea, coffee and pop, can The product was marketed as " super-hydrating" and "nutrient-packed." Dehydration could be the culprit. Two recent contribute to the total recommended amount scientific studie s found that even mild we need to drink daily. Coffee has typically been dehydration, defined as a 1.s percent loss of viewed as a diuretic, contributing to dehydra- (FDA) and Health Canada guidelines that allow normal water volume in the body, can cause tion , but this is now changing. Medical research products to claim they are a " good source of " degraded mood, increased perception of task centre the Mayo Clinic says that caffeine is only electrolytes," they must provid e 10-19 percent difficulty, lower concentration , and headache an issue when consumed in large amounts symptoms" in women and "adverse changes in (more than 500-600 milligrams per day, th e equivalent of five to seven cups of coffee). of the daily nutritional value to qualify (15 percent for Health Canada) . vigilance and working memory, and increased Still, some caution is warranted. A 20-oz. or tension/ anxiety and fatigue" in men. These two studies, conducted under the larger brewed coffee might have 300-400 milli- auspices of the University of Connecticut, grams of caffeine, and a double shot of espresso involved inducing dehydration in test subjects has around 150, so the numbers quickly add up. To meet U.S. Food and Drug Administration Still, as Dr. Tod Cooperman, president of Consumerlab.com. explain s, 'There 's nothing really wrong with coconut water for casual drinking. It's expensive but otherwise fine." Coconut water is low in calories and, according to the Consumerlab.com report, "certainly a by walking on a treadmill before ta king a series of cognitive tests that led to the Coconut water: myth or miracle? There has healthier choice than a can of soda or a fruit studies' conclusions. been a lot of media hype the past couple of drink, which contain twice the amount of sugar." Despite exercise having induced dehydration for research purposes, there is a ·wider application years about the benefits of coconut water. Often marketed as a sport drink, it is promoted On the job. What is clear is that staying hydrated to the finding s. "Dehydration affects all people as being better than water because it restores and staying properly hydrated is just as important for those who work all day at a sodium levels that are depleted by sweating and its energy content boosts blood sugar levels. on the job should be a priority, especially during the festive-filled winter months. Health Canada computer as it is for marathon runners ," The product has been particularly applauded dehydrate you. Also, drinking anything loaded explains Lawrence E. Armstrong , one of the for its special hydrating qualities. But these assertions have been controversial. with sugar makes the body work hard to process In 2011 , an independent U.S. testing company, that unless you are exercising during the day scientists on the research team . So how much do we need to drink to stay warns that "drinking too much alcohol can it, cau sing further dehydration." It also adds hydrated? Armstrong recommends an often-cited Consumerlab .com, examined three popular and need to replace lost electrolytes, water rule: eight, 8-ounce glasses of water a day, or brands of coconut water and found that two is probably the best choice. approximately two litres - indicator of dehydration . "By the time you feel contained markedly less sodium and magnesium than advertised in their nutritional Hea lth Canada recommends staying hydrated thirsty, you are already dehydrated," says Sean information . And as a result of the tests by by drinking plenty of cool liquids, especially Upton , media relations officer at Health Canada. Consumerlab .com , there have been lawsuits, water, as cool drinks are quickly absorbed by with one of the companie s, Vita Coco, settling the body. And, as the Mayo Clinic puts it, water is a class action lawsuit for $10 million for misrepresenting the health benefits and Drink and thirst is not a good Understanding the hype. Perhap s surprisingly, that morning cup of Joe is actually helping to 36 ENTERPRISE · NOVE MBER 20 12 Whether working, playing or exercising , "calorie-free, inexpensive and readily available." up! ~ (coconuts) Amriphoto/getty, istock r:ICCil Business solutions through information technology® Marketing Maven Standing Out From The Crowd With 2013 just around the corner, Enterprise delves into the TOP FIVE marketing strategies to be deployed by the experts over the next 12 months by Adam Currie 1. Building brand equity Client perceptions and attitudes have a direct relationship to a brand's market position. Tania Goodine, vice-president of brand at Ontariobased Libro Financial Group, says that organizations are able to create brand equity by making themselves "memorable, easily recognizable, and being superior in quality and reliability." Goodine adds that building brand equity is critical. "Because we operate in such a competitive, commoditized industry, we need to continue to strengthen our unique value proposition based on straightforward advice, personalized service, profit sharing, and involvement in our local communities." 2. CSR strategies and policies "At the core of effective corporate social responsibility (CSR) is ensuring that everyone is accountable and works to earn the trust of members through ethical and responsible behaviour," according to Gail StepanikKeber, chief marketing officer at SelVUs Credit Union in Alberta. Priscilla Boucher, vice-president of CSR at Winnipeg-based Assiniboine Credit Union, warns that profit pursued at any cost is unacceptable. "A business that pursues profits while demonstrating social, environmental, and ethical leadership is putting long-term sustainability before short-term gain and helping to build a successful business model based on the premise that people and the planet matter," says Boucher. 3. Enhancing the online experience Many members today choose to handle transactions online. "As consumer channel preferences are constantly changing, a continually expanding portion of financial research, transactions and purchases nowoccuronline," notes Libro's Goodine. As a result, marketing departments are focussing not only on branch- 38 ENTERPRISE • NOVEMBER 2012 oriented relationship building, but also on developing strong online connections with members. Bronwyn Dunbar, senior manager of marketing and community investment at Island Savings Credit Union in B.C., and Libro's Goodine concur that enhancing members' online experiences is a key focus for 2013 . 4. ROI metrics Return on investment (ROI) has become central for decisions relating to all aspects of credit unions, according to Stepanil<-Keber. Metrics are also beginning to play a larger role in securing approval and funding for marketing programs. "Marketing measurements are not always tangible, however, we are putting details together to build our marketing metrics dashboard," says Stepanil<-Keber. She adds that this includes basics surrounding marketing spend-to-revenue (ratios), media monitoring, social media metrics, brand health scores, community investment ROI and product sales during marketing campaigns. S. Supporting merger and integration processes Credit Union Central of Canada reports that the number of credit unions decreased by 726 between 1992 and 2011 due to mergers. Facing a trend of consolidation, many credit unions have to consider merger and integration processes to ensure smooth operations. Bryan Mavrow, who oversees the Envision Financial and Valley First brands as senior vice-president of marketing at B.C. 's First West Credit Union, says that merger efforts in 2013 will be more focused on keeping things local. "Consumers value localness. I haven't met a member who'd say they appreciate having their money spent on banking system conversions and renaming projects," he says. ~ Luc Latulippe