Steve Koenen, President & CEO, Altra Federal Credit Union

In an interview with Invest:, Steve Koenen, president and CEO of Altra Federal Credit Union, discussed the credit union’s efforts to balance digital innovations with traditional services to meet diverse member needs. He also outlined investments in AI, infrastructure, and cybersecurity, and the need to address economic challenges and workforce dynamics to ensure sustained success.

Reflecting on the last 12 months, what have been some of the main highlights and key milestones for Altra Federal Credit Union?

The last couple of years have been challenging in the banking world due to the interest rate environment and inflation, which have significantly impacted on our members’ financial health. The stress on our members’ financial well-being has been noticeable. At Altra Federal Credit Union, we have always prioritized the financial health and wellness of our members, but this past year, that focus has been more critical than ever. From a business perspective, we achieved some significant milestones. We acquired additional properties in Clarksville, Tennessee, and Tyler, Texas, for expansion purposes. These acquisitions are crucial for our growth outside of our core markets of Minnesota and Wisconsin.

Additionally, we completed a major remodel at our flagship office in La Crosse, Wisconsin. This investment in infrastructure reflects our commitment to enhancing our facilities for our members and employees. Another achievement we are proud of is earning the “Great Places to Work” certification for the sixth consecutive year. We invest considerable effort in taking care of our members, community and employees, and this recognition helps us attract and retain top talent. Despite economic and industry challenges, Altra Federal Credit Union remains committed to supporting our members, communities and employees.

How has the definition of financial health and financial freedom changed in the last few years, especially from the client’s perspective?

Today, financial health means alleviating the day-to-day stress that comes with managing basic needs like food and shelter. Many of us grew up in households where we had what we needed but not always what we wanted. Now, the goal is to help people reach a level of financial comfort where they are not constantly worried about making ends meet. For many, this means not having to work multiple jobs or stress about basic living expenses. The challenges of the past few years have exacerbated financial strain for many individuals, particularly those already on the edge. At Altra Federal Credit Union, our role is to provide support and solutions that help our members feel more secure in their financial lives. 

What are some of the financial literacy initiatives that Altra Federal Credit Union is working on?

Financial literacy has always been a priority for us. We have dedicated employees who focus solely on this effort. For many years, we have been working in schools to educate youth on basic financial tools. Currently, we have 35 certified financial coaches across our branches who assist members with everything from basic budgeting to answering everyday financial questions. We offer seminars, online tools and resources to guide our members. Our approach is holistic. We aim to be with our members throughout their financial journeys, helping them navigate challenges and achieve financial wellbeing. This commitment differentiates us, and while we are proud of the work we have done, we are continually looking for new ways to expand these initiatives.

How is Altra Federal Credit Union adapting to shifting customer expectations?

Customer expectations have shifted dramatically. We now serve a broad spectrum of members, from those who prefer traditional banking methods to those who want fully digital experiences. Meeting these diverse needs can be challenging, but it is necessary. For example, we have implemented digital innovations that allow members to complete processes like mortgage applications entirely online. In some markets, we even offer fully digital mortgage closings with no need for wet signatures. These advancements cater to members who prefer digital banking. At the same time, we continue to invest in our physical branches to serve members who value in-person interactions. Our branches now feature integrated teller machines (ITMs), which operate 24/7 and handle over 90% of traditional teller transactions. These ITMs have allowed us to become a 24/7 organization, offering convenience for members who need to conduct transactions outside of regular business hours.

How is Altra leveraging technology and innovation to improve customer experience and make the operations more efficient?

We have made some initial strides with artificial intelligence (AI) and are exploring further use cases as one of our key objectives for 2025. At Altra, we have a collaborative team of around 10 employees from various departments who are working together to explore AI solutions. These solutions aim to improve both internal efficiencies and external member experiences. Internally, AI can help streamline processes, enhance fraud detection, and generally improve operational efficiency. For our members, AI can expedite interactions, making their experiences more seamless. For example, we have implemented robotic process automation (RPA), often referred to as bots. We have developed close to 30 bots that automate internal tasks, which not only improve our efficiency but also positively impact the member experience and reduce costs.

Looking ahead, we believe AI will significantly influence how members interact with us. However, as an industry, we are all cautiously testing the waters. We are currently using AI for loan decisioning and similar processes, and it has proven to be highly beneficial. Nevertheless, we need to carefully determine the level of control and implementation to ensure security and efficiency. While the potential of AI excites us, we remain cautious about its integration.

What are the primary challenges for the banking and financial services industry, and how is Altra addressing these?

Cybersecurity is certainly one of the biggest challenges. It is a constant battle to stay ahead of potential threats. The amount of time and resources we dedicate to this is significant. Despite our best efforts, no system is entirely bulletproof. This is where AI provides us with a significant advantage. For example, if a member has a consistent banking pattern over two years and suddenly performs an unusual transaction, AI can flag this and send notifications to both the member and Altra. We have a dedicated team of experts and work with several vendors and consultants to stay ahead of the bad actors. Cyber threats evolve quickly, often giving us only a few months’ lead before new methods emerge. To combat this, we conduct regular desktop exercises, simulating potential breaches to evaluate our responses.

Beyond cybersecurity, what other challenges does the industry face?

The interest rate environment and inflation are significant concerns. Over the past few years, these factors have affected housing affordability and auto loans. Members are taking out fewer loans, and those who do are paying much higher rates. Additionally, savings are dwindling, and credit card balances are increasing. This financial strain on our members is something we are actively addressing. 

Another challenge is talent acquisition and retention. Attracting and developing top talent has become more difficult. We invest a great deal of time and effort in this area because Altra’s success depends on our employees. The rise of remote and hybrid work models has added complexity to workforce management. Balancing these arrangements has its advantages, but it also presents challenges, such as maintaining engagement with employees who work remotely for extended periods. Despite these hurdles, we remain focused on nurturing our talent and adapting to the evolving workplace dynamics.