Welcome!

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We’re creating something new here – a bridge from the June CU*BASE Leadership Conference and CEO Strategies in November

Hosted by CU*SOUTH for the benefit of all CU*BASE Credit Unions All cuasterisk.com partners and clients are welcome!

An opportunity to see what’s coming – in the marketplace, and in our CUSO network

A forum for discussing how CU*SOUTH and our CUSO network responds to changes in our environment

Most important – a chance to put on your Visionary perspective as you start your 2015 Strategic Planning season

How does CU*SOUTH fit into your Strategic Planning cycle?

CU*SOUTH Visionary Conference 2014WELCOME TO A NEW VISION FOR CU*BASE USER CONFERENCES

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The Visionary Perspective

My favorite business book this year:

The Synergist focuses on helping organizations break through the gridlock of competing agendas and achieve real progress.

Author Les McKeown identifies three basic styles of collaboration and organizational dynamics.

This is an outstanding resource for any team! I learned so much from this book, I’ve been giving copies to my friends.

CU*SOUTH Visionary Conference 2014WHY “VISIONARY”?

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Three Basic Styles of Teamwork:

VISIONARY: “Let’s go to the moon!”.

OPERATOR: “Great idea! We’ll builda rocket, train astronauts, invent supercomputers and Tang…”

PROCESSOR: “Wait, wait, where’s the budget?”

CU*SOUTH Visionary Conference 2014WHY ARE “VISIONARIES” IMPORTANT?

Does this sound familiar? Processors get frustrated with Operators for running and gunning, Visionaries get mad at Processors who slow things down with concerns over red tape.

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It all starts with the VISIONARY: The core contribution that any

Visionary brings to the organization, group, or team is, of course, at the root of the word itself— vision.

The ability to see what isn’t there (yet), and to motivate others to help translate that vision into reality is the foundation of any enterprise.

This is vision with energy and passion. Visionaries passionately pursue their visions to the point where it gains traction, becomes real, and develops a life of its own.

CU*SOUTH Visionary Conference 2014ARE WE SEEING WHY IS THE VISIONARY IMPORTANT?

Most of us came from Operator and Processor backgrounds – so how good are we at adopting a Visionary perspective?

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VISIONARY STRENGTHS FLEXIBILITY – the agility to react to our

environment COURAGE – a willingness to take risks, drawing

from past experiences to avoid mistakes SIMPLICITY - Occam’s razor - the perfect solution

to any problem is the simplest one. Visionaries see through overly complex ideas with a laser-like intensity.

EXECUTION - As marketing guru Seth Godin would put it, Visionaries ship.

CU*SOUTH Visionary Conference 2014WHAT ARE THE TRANSFORMATIONS YOU DREAM ABOUT?

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CONFERENCE OBJECTIVES Let’s work together as VISIONARIES Let’s learn from each other and think about

what the market is telling us Let’s get inspired by the tools and resources

we’re building as a CUSO Let’s leave here with the passion to execute –

to share our Vision with our teams, our Boards, our members

CU*SOUTH Visionary Conference 2014WHAT ARE THE TRANSFORMATIONS YOU DREAM ABOUT?

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The financial services market is changing every day. Everyone can feel it, and everyone’s talking about it

We need to respond to our members’ evolving perceptions about what financial services are, how they are delivered, and from whom

Planning to transform takes vision Planning to transform takes the intent –

to be more, to be different, to be...?, to decide that the time is right

This is where we are all equal as leaders

This nervous feeling that something is about to break – break for the good, break for the bad – and it’s our job to envision a plan to make sure it breaks for the good

Envisioning a TransformationWHILE PLAYING TO OUR CORE STRENGTHS

9 Includes all cuasterisk.com network partners, all clients currently under contract

What drives transformation? You do, our CUSO network does# of CUs by State

257 CU*BASE Credit Unions

in 35 StatesTotal Members Served:

1,936,000

13

30

2

2

9

31

8

190

4

1

2

1

11

1

1

69

1

1

11

6 8 117

21

4

87

7

61

1

1

37

1

1

3

1

1

11

1

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Who’s creating the vision? You are!

CU*BASE Credit Unions: 257 Total Members Served:

1,936,000

RECENT CONVERSIONS TO CU*SOUTH • Wymar FCU, Geismar, LA (Aug 2014)• Louisiana Central CU, New Orleans, LA (July 2014)• Habersham FCU, Toccoa, GA (June 2014)• CommunityWorks FCU, Greenville, SC (June 2014)• Spohn Health Systems FCU, Corpus Christi, TX (April 2014)• Newark Firemen’s FCU, Newark, NJ (March 2014)• Houston Belt & Terminal FCU, Houston, TX (Feb 2014)• Hanesbrands CU, Winston-Salem, NC (Jan 2014)• Hilco CU, Kerrville, TX (Sep 2013)• TexHillCo School Employees FCU, Kerrville, TX (Sep 2013)• Local 142 FCU, San Antonio, TX (Aug 2013)• Southland FCU, Lufkin, TX (June 2013)• K-State FCU, Manhattan, KS (May 2013)• Calcasieu Teachers & Employees CU, Lake Charles, LA (Mar 2013)• Jefferson CU, Birmingham, AL (March 2013)• Pensacola Government FCU, Pensacola, FL (Jan 2013)• SAFE Credit Union, Beaumont, TX (Dec 2012)

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And a big welcome to our next scheduled conversions!

CU*BASE Credit Unions: 257 Total Members Served:

1,936,000

WELCOME TO THE FAMILY!

CU*SOUTH’S NEXT THREE CONVERSIONS: • Piedmont Credit Union, Danville, VA (Nov 2014)• Nizari Progressive FCU, Houston, TX (Jan 2015)• Geismar Complex FCU, Geismar, LA (Mar 2015)

OUR FAMILY IS GROWING THROUGH MERGERS:• Pensacola Federal CU merged into

Pensacola Government FCU (May 2014)

… AND START-UP’S: • CommunityWorks FCU

(Brand New Charter – opened June 2014)

Here’s a scary statistic – in 2013, the “Big 4” controlled over 82% of the market (counting Fiserv’s acquisition of OSI)12

Thanks to you, CU*BASE is the leading independent CU core

RANKED BY MEMBERS SERVED

EXCLUDING THE “BIG 4” BANKING VENDORS – FISERV, JHA, FIS, AND HFS

# Core Software 2010 2011 2012 2013 2014

Fiserv - 17 brands 42,823,637 42,374,749 37,784,061 39,973,012 JHA - 4 brands 20,644,353 21,087,645 24,401,719 25,389,932 FIS - 4 brands 8,812,095 9,074,645 9,692,149 10,380,694 HFS - 2 brands 6,680,575 6,645,406 6,570,816 6,456,301 1 CU*BASE 1,333,800 1,452,800 1,523,100 1,626,870 1,936,0002 CMC/Flex 1,267,386 1,350,097 1,327,232 1,401,838 3 ShareTec 992,682 859,569 973,916 1,070,179 4 ShareOne 574,246 647,738 709,481 733,459 5 CompuSource 678,003 671,779 647,396 622,819 6 FedComp 714,326 648,804 585,410 617,182 7 EPL 934,789 735,495 553,076 555,211 8 COCC 384,095 382,203 410,598 417,713 9 RC Olmstead 373,481 321,098 295,101 278,049 10 ERS 287,701 278,031 271,944 261,889 11 CBS/CAMS-II 224,630 225,066 224,685 252,413 12 AMI 251,994 238,060 196,342 191,972 13 Systronics n/a 185,467 161,667 151,694 14 Enhanced Software (ESP) 199,013 146,440 160,978 147,830 15 Datamatic n/a 152,554 141,519 140,469

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Necessity is the mother of invention, and I believe many CUs will finally have to face this transformation

CUs will need to Reject the concept that everything is for

defense and saving member relationships Refine how they invest for competitive

advantage, and make it real Ensure every program has some revenue

contribution Aggressively invest in or buy opportunity, and

blatantly call it out as a talent

Vendors and our CUSO will have to adjust to this new era Redefine who takes the risk in making offers

to credit union members Create concrete returns, or don’t charge Earn when the credit union earns Fee for execution, not legacy investment Pay credit unions to reach consumers, and

share the harvested results Specialize in models for cooperative designs,

and match the expense to the credit union’s opportunities

They’re fuzzy, but they’re guidelines for us all

In 2015, we believe you’re going to have to tell your board and owners the math must change

Can we predict the future of how CUs will make money?CAN WE TRANSFORM THE ECONOMIC DRIVERS OF OUR INDUSTRY?

Hear how at tonight’s Stockholders Meeting

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An explosion of personal devices is changing the retail world

It’s getting harder and harder to make a buck

Interchange income is morphing...but to what is anyone’s guess

Cooperatives are trendy, but participation in owning and driving one is waning

Solving the “under-banked consumers” issue is creating new opportunities for the banked

Retailer account servicing (like stored credit and rewards programs) is on the rise

Internet-based data sales concepts seem counter-culture to our industry

Regulatory and compliance costs continue to escalate

The NCUA continues to overreact and destroy member value

It costs more to defend our organizations against competition, with less ROI on the tactics

Is there anything really new here?

Or are we just getting to the point where these threats seem to have aggregated to the point

where we feel we have to DO something?

What is driving the pressure to transform?NOTHING NEW, BUT ARE WE APPROACHING A TIPPING POINT?

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It can come down to fight or flight

FIGHT FLIGHTAdopt a new mindset and architect member experiences for the future

Accept that the way we do things is no longer relevant, and fade away

Replace one set of opportunities with another – accept new challenges from our members and embrace them

Continue to spend more on less activity, and ensure our obsolescence

Evolve new core competencies and attract the talent required for the future

Accept that you cannot learn or hire your way out of a hole, and fade away

Become agile and adaptable; bake it into your organization’s design

We are who we are, and we’d rather give up the fight than change

WE SURVIVED A CRISIS...BUT DO WE HAVE THE ENERGY TO FIGHT FOR A NEW FUTURE?

Some people do have to eventually give up the fight, but that’s not the same thing as abandoning the ideas of our industry and its promise for the American consumer

In the next five years, our network will generate $200 million to creatively reinvest in transformation – can you get your mind around that?

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It can come down to fight or flight

FIGHT FLIGHTAdopt a new mindset and architect member experiences for the future

Accept that the way we do things is no longer relevant, and fade away

Replace one set of opportunities with another – accept new challenges from our members and embrace them

Continue to spend more on less activity, and ensure our obsolescence

Evolve new core competencies and attract the talent required for the future

Accept that you cannot learn or hire your way out of a hole, and fade away

Become agile and adaptable; bake it into your organization’s design

We are who we are, and we’d rather give up the fight than change

Some people do have to eventually give up the fight, but that’s not the same thing as abandoning the ideas of our industry and its promise for the American consumer

In the next five years, our network will generate $200 million to creatively reinvest in transformation – can you get your mind around that?

WE SURVIVED A CRISIS...BUT DO WE HAVE THE ENERGY TO FIGHT FOR A NEW FUTURE?

This is not a call to fight alone

This is a call for us to fight as a collaborative, for us to declare goals that none of us might set alone, but that we can easily

envision as allies

For example, what if multiple mobile app solutions were available to every CU without a single penny of expense?

We need to reach for a different future

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Preparing for the next decade

Some people fear that our members’ experiences are out of date... So let’s talk about how we envision and architect new

member experiences Some people say the writing is on the wall, that

we’re approaching a tipping point in what our members want from us So let’s envision how we meet the market head-on

instead of running to catch up Most say that the clues are in the data, and that

we need to spend more time responding to what members are telling us through their actions So what opportunities are there to make data the spark

for transformation?

2015 – 2025 ... A RUSH TO THE FUTURE, NEVER LOOKING BACK

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Data Analytics and

Big Data (Year 2)

What if what the world knows about us

might be more important than who we actually are?

Passing the Tipping Point

Tipping point: “The point at which an object is no longer balanced, and adding a small

amount of weight can cause it to topple.”

Is this your business? Is this our industry?

Walking in the Members’ Shoes

What’s changing about today’s consumer’s expectation?

Can we design a user experience that measures up?

Today’s Agenda