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Rapid Financial Technology Evolution Challenges Credit Unions

In the first of a two-part series, six experts discuss how credit unions can deliver a frictionless member experience.

AI, chatbots, IoT, fintech disruptors, APIs, open banking, digitization, cloud, cybersecurity … the technology terms continue to appear at a fast and furious rate, leaving credit unions and their tech partners racing to keep up.

Some of the challenges facing credit unions and their partners when it comes to sustaining frontline technology was the focus of a recent CU Times discussion with Ted Bilke, president of the Monett, Mo.-based Jack Henry & Associate’s Symitar division; Robb Gaynor, chief product officer for the Austin, Texas-based Malauzai, a Finastra Company; Mickey Goldwasser, vice president of marketing for the Glastonbury, Conn.-based Payrailz; John Levy, EVP of the Rahway, N.J.-based IMM; Keith Malbrue, chief information officer for the $1.4 billion, Dallas, Texas-based Credit Union of Texas; and Joe Salesky, CEO of the San Francisco, Calif.-based CRMNEXT.

First, the group examined some tools and techniques credit unions need to deliver a positive member experience.

CUTX, like many credit unions, has sought to meet member expectations through a core conversion through a smart CRM for credit unions . Malbrue noted that affords the financial institution the opportunity to touch every software application and hardware connected to the system. “Previous to the upgrade, we chose to update our internet banking and mobile banking platforms. In addition to these major platforms, we also chose to upgrade our collections software prior to the core conversion.”

Goldwasser, whose company Payrailz offers innovative digital payment experiences, defined the role of tech vendors. “We’re all in the job of trying to help all these credit unions compete, so it’s important that people know they can get the same type of technology larger institutions can offer.”

Levy pointed out for fintech companies such as the e-signature platform provider IMM, it’s all about digital transformation and providing tools that support credit unions so they can go cradle-to-grave for processing, whether it involves lending, loan servicing or account opening. “Allow it to go from the business application like a Symitar [product], all the way through workflow into e-signature, and then at the back-end have it ingested seamlessly into an imaging system and ECM.”

A core processing system enables third parties to move a process forward and allows the task or transaction to be completed through virtually any channel, whether that’s at a branch or kiosk, or in a remote location, say on a cruise ship, Levy explained. “There’s other technology all of our members see out there in the marketplace, whether it’s food shopping or buying online through Amazon with one click, that raised the bar and expectations. To compete, you really need all of these deliverables with credit union CRM.”

Levy added at a very high level, a core system can do two things for a credit union. “It’s going to increase productivity and reduce operating costs. Then on the other side of it, for the members, it provides that ‘easy button.’ It makes it quicker, better, faster, more efficient and easier for them to do business with their credit union.”

Bilke said he continues to marvel at the normal software evolution process and how much of it has accelerated and evolved due to GAFA, an acronym for Google, Apple, Facebook and Amazon, which make sure their platforms operate the same way on every device. “Nobody wants it different between the channels, chat bots, Alexa and Google Home,” he said, adding, “The core’s role is to be that black box at the center that allows the member to transact business, apply consistent business logic across the channels and be the system of record for the transaction.”

Hundreds of product opportunities center around the core, Bilke noted; Symitar’s VIP program allows customers to use third-party products as well. “I think the secret sauce is the capability through API to open up the core. Typically, most of the evolution of cores is to put in place a services-oriented architecture that makes it easy for third parties to transact and create that frictionless member experience through CRM for credit unions.”

To help meet consumer expectations, IMM holds customer advisory council meetings, where it obtains responses on what’s provisioned a year or two down the road. “We look to get feedback on where we should go,” Levy said.

Payrailz also uses focus groups and studies to ascertain what’s going on outside of the industry and whether an adoptable financial services application exists. Goldwasser pointed out members are consumers who interact in a digital world filled with great experiences they expect their credit unions to duplicate. “The most important part is you have to listen; we spend a lot of time talking to not only credit unions but also reaching out to members.”

For CUTX, this means staying on top of fintech. “Like other credit unions, our executive team attends many industry events and educational sessions. We also listen to our members’ feedback on the types of technologies that they would like us to offer,” Malbrue noted.

Beyond taking that feedback into account, vendors heed their business partners’ recommendations. “People like Jack Henry and others that would tell us, ‘Hey, you really need to move in this direction with your solution and you need to plan for that,’” Levy said. “Everything is happening at such an exponential rate with new technologies and opportunities that make it easier for the member. For the credit union, it’s amazing the rate of change that’s needed to take things to another level.”

Goldwasser noted newer tools that are available, such as artificial intelligence, bots and voice-enabled tools, can come into play. “Not for technology’s sake, but to make that member experience even better.”

Goldwasser also mentioned handling personal data with care is a key component of building member trust at a credit union. “It’s protected because it’s regulated,” he said. “The fact that a member’s data is held secure, through APIs and working in partnerships, the ability to then with permission use that data is another way in which you can serve the member better.”

Bilke maintained there are two types of data maintenance: A system of record and history. The system of record follows the transaction, which can arrive through a peripheral system such as a third-party, fintech, digital channel or call center; the servicing process then begins for that transaction. Concerning the history portion, Bilke said, “It’s where everybody’s trying to get from a data standpoint. ‘I’ve got all this transactional history. Now how can I use that?’”

Taking it a step further, credit unions may also consider artificial intelligence. “By looking at past behavior, can I predict your future behavior?” Bilke asked.

Gaynor highlighted three priorities every credit union should focus on right now:

- A positive member experience led by a great digital engagement platform with a credit union CRM. “This is the top priority for every credit union. When you get this right, every interaction at every possible touchpoint provides members a cool, modern and engaging experience.” He added user interfaces must be clean, simple, intuitive, and most importantly, consistent across all channels. “The big secret: Engage employees to become digital evangelists. Every employee at your credit union should be involved.”

- Member business services, specifically focused on solutions and tools for small business members who also have personal accounts.

- Paying attention to the open API movement and ensuring their partners and vendors support it. This will ultimately benefit members by providing them with cutting-edge apps and digital sites to help them with their finances.

Salesky, whose company enhances marketing activities and helps credit unions deliver a supreme member experience, stated, “The best credit unions have focused on ensuring the member experience feels frictionless and easy like Amazon purchases do, yet are as personal and consultative as your primary care physician or an Apple store.”

Look out for the next part of this discussion, which focuses on mature technologies that underpin current technology such as ATMs, and how credit unions are keeping pace with tech development, on


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