SPEAKER_00 0:01

This episode of Tech Solutions for CUs is sponsored by Maven Advisory, helping fintech founders build go-to-market strategies that fit how financial institutions actually buy. From ICP and positioning to sales strategy and go-to-market planning, Maven Advisory helps companies build the foundation for sustainable growth.

SPEAKER_01 0:30

And now here's the host of Tech Solutions for CUs, Finnoponis Publisher John Sanfilipo.

SPEAKER_02 0:37

All right, welcome to the latest episode of Tech Solutions for CUs. I'm Finoponymus Publisher and your host, John Sanfilippo. We are very lucky to have with us today Jim Perry, who is a senior strategist for Market Insights. I met uh Jim the first time at Finovate a couple of months ago. Uh he did a session with um Julie Munn from Finovate on breaking news, basically. It's just what were the headlines at that particular moment in time? It was a great session. I thought that's a guy that we need to have on tech solutions for CUs. And he graciously agreed to be here. So thanks for being here, Jim.

SPEAKER_03 1:18

Oh, my pleasure, John. Thanks for the invitation.

SPEAKER_02 1:21

You're absolutely welcome. So for the for the one or two people who aren't familiar with your name out there, maybe you can just give a little peek at your background and what your work as a senior strategist actually means.

SPEAKER_03 1:37

Sure. Um I've been in this industry now for actually today, Marks 21 years, actually.

SPEAKER_02 1:46

Congratulations.

SPEAKER_03 1:47

Thank you. Um and Market Insights, though, has been around uh even longer, like a decade or so longer. Um fundamentally, we're a consultancy uh based in Seattle, actually. Uh but I'm still based in the center part of the country, makes my travel a little bit easier. And certainly for me, the role of senior strategist has evolved just as the industry has evolved for many, many years. A lot of our work was about helping credit unions and community-based institutions, you know, really determine their best growth strategy, which often meant where do we expand geographically? Where do we move, locate our next branch in order to achieve some level of growth? Um, but of course, uh now I think we spend more time saying, you know, which branch do we need to consolidate? Which ones do we need to let go of that are no longer performing for us because our members' behaviors have changed and we need to deploy some of that capital for, you know, to pay for some of the tech changes that that we need to be making. But one thing hasn't changed over those 20 plus years. Um, you know, I've always said that good strategy begins with evidence, not assumptions. And that just means you've got to look at your data, your market data, in order to drive some of the choices you're making these days. So that's essentially what has always been a big part of my work.

SPEAKER_02 3:20

Now you mentioned that consumers have changed their behavior, but that's not that's not a it used to be this way and now it's this way, and that's and we can go based on this. It's it's continuing to change, correct?

SPEAKER_03 3:33

Absolutely. And the evolution of it, oftentimes, you know, we'll look at national studies that suggest a particular movement in one direction or another in terms of digital behaviors. And while, yes, we can point to those and see definite trends, definite signals that we need to pay attention to. But I also remind folks that regionally there are differences in how these behaviors start. There's differences between uh what may start in urban areas could take two years before you start seeing it in rural areas or even suburban areas. So it's like, and those behaviors can also shift based on what's happening in the world around us. Um, because as human beings, we adjust our behaviors um, you know, based on what environmental influences uh are are occurring. And of certainly we saw that during COVID. Um and we've talked a little bit about that in the past.

SPEAKER_02 4:43

Yeah, now in addition to the changes in behavior, there are also a lot of there's a lot of technological disruption as well. Correct. So so how how does I'm a CEO of a $500 million credit union. How do how do I get get my arms around all that?

SPEAKER_03 5:02

Well, the important thing is to at least pay attention to what's happening on all fronts. Because one of the things I notice at practically every conference I attend, um, every client we work with, um our industry loves our buzzwords. And so I remember a couple of years back, everybody was talking about the metaverse. And what often happens is those words start infiltrating, you know, blog posts and podcasts and all the rest. And at some level, if it's distinctly different or requires us to really reconsider business models and operational models, it's human nature to start to tune it out, you know, and saying, you know, that'll that'll apply to the $10 billion institutions and above. That'll apply to the ones who are primarily in the big biggest cities, etc. And unfortunately, you know, that that idea or the concept of uh kind of being um on the cutting edge. Um you know, people say, we'll we'll wait, we'll catch up. Everything's accelerating so quickly right now. Um you can at least afford to put things on the back burner. You at least have to learn about them and and pay attention to them.

SPEAKER_02 6:36

And how can you make sure you don't miss something? I mean, I mean, with all these new things popping up. What do you have any tips to identify new things that you need to watch for that are being added to all the other stuff that you needed to uh I'm a big fan of time blocking.

SPEAKER_03 6:55

Um saying, you know what, if you're a leader in the credit union industry, you need to actually block out on your calendar, you know, an hour a week, two hours a week, whatever time that you're going to dedicate to really paying attention to, you know, two or three different blogs, you know, listen to a couple different podcasts, whatever.

SPEAKER_02 7:19

Read for eponymous.

SPEAKER_03 7:21

Absolutely. Listen to those thought leaders that are going to help you at least stay on top of these issues as they develop. Just this week, we had a major announcement on Tuesday about 140 businesses coming together around Open USD. So they've agreed to this platform on stable coins. And it includes, you know, most major banks. It included PhyServe, it included Jack Henry, it included Chime of the entire list. There was no CUSO, there was no credit union there. You gotta pay attention to those issues because it's it's changing the infrastructure of the industry.

SPEAKER_02 8:15

I agree. No, you know, I just as an aside, you mentioned the metaverse. That's one prediction I got right in my life, is when that first became a thing, I I said this is this is going no place, and that seems to be where it went.

SPEAKER_03 8:30

Well, actually, I I do want to say one thing about because while everybody was worrying about whether or not they're gonna have to build a branch in the metaverse and all the rest, the one thing that most people didn't stop and realize is there was this kind of corporate metaverse that allowed for ideas to be iterated much faster than ever before, because it used to be that some of these technologies would require, you know, physical um expending of dollars and time and energy in order to iterate certain ideas. Now these things could actually be iterated in a kind of digital virtual space. And and that's partially why we've seen the acceleration of new technologies coming to market faster, because they can be iterated in a virtual space as opposed to in physical space. So while yes, the the metaverse in the the way a lot of people were worrying about it two or three years ago, like yourself, you were totally true. But the ultimate impact of it has has been pretty significant.

SPEAKER_02 9:49

Interesting. Interesting point. That's a good point. Now let's talk a little bit about let's let's let's go back to jump back to COVID, and nobody can go anywhere. So everything goes digital, and it goes digital in a hurry. And the assumption was that we're going all digital, we'll never never go back now. And it seems to me that lately that doesn't seem to be so much the case. There seems to be a renewed interest in people doing things together, people going into a branch, people going to a mall. My my uh my wife and I took my our granddaughter to one of the more popular malls a couple of weeks ago, and I was amazed at how many people were there. You wouldn't know there was an Amazon, you wouldn't know gas was six dollars a gallon. There's people out there shopping, and it it just seems to me that that you know people are starting to realize being around other people is not so bad.

SPEAKER_03 10:46

Right? Um, you know, it's it's interesting. I think there has certainly been some snapback to that that desire, oh, I need some human connection here, and what is that going to look like? Um, one of the things that I also point to is that there's a little bit of that as generational. Um I was talking to uh uh an individual uh a couple of years ago uh that was talking about his first experience uh with any kind of technology, and it was a rotary dial party line phone, right? And we both had a good chuckle over that. Um and that'll tell your listeners, kind of my demographic cohort. But one of the things that I had to realize was little boys and girls right now who are accustomed to talking to their grandparents on Zoom, who are used to FaceTime now, uh, as part of a real digital experience, a real human experience, that's their party line phone, right? Their technology will never be any slower, will never be any more clunky than it was during COVID. And so as that kind of moves along, one of the things we're discovering that people want a blended experience and they want something that they can choose rather than something that's kind of that you had to do it. I mean, before COVID, think of the amount of friction that used to be, you know, 15, 20 years ago in terms of, well, we can't make a deposit any other way. We can't do this transaction any other way. But now we have more choice as consumers. So so part of our challenge in the industry is continuing to evolve those branch level experiences so they they don't alienate, you know, some of our not just um kind of our older consumers, because I think there are definitely branch-centric of younger people as well. But the number of branch-centric people in terms of choosing the branch as their primary kind of access for any kind of activity, that number does keep shrinking, keeps going down. And so we've got to evolve that experience. We can't keep replicating an old business model in order to meet the expectations of uh our members.

SPEAKER_02 13:37

And that kind of brings us around to a topic that uh you and I discussed the other day when we were on the phone, and that was the concept of human in the loop, and and why why that's a good thing and why that can be a bad thing. You you you want to comment on that?

SPEAKER_03 13:55

Sure. Um I've been talking a lot about um agentic AI uh in the last couple of years, especially because while everybody else was focusing on generative AI and all that uh was changing on that front, um, there were others that were kind of afraid of talking about agentic AI because that almost removes the human from the loop because it creates an absolutely autonomous situation. Um, so it's almost like there's a human on the loop, not in the loop, um, you know, overseeing it all. But the phrase itself, I've heard folks using it in such a way that it's beginning to lose its meaning, or it or it's simply a signal that, yes, don't worry, we're going to make sure that things don't ride off the rails here, that they don't get out of control, that somebody's going to pay attention to it. But oftentimes, especially for a lot of credit unions, they're not really skilled. They don't have the internal skill to deal with it. So they're depending on vendors to actually manage that for them. And if that's the case, you know, you're you're missing one of the most important points of human in the loop, and it's all about accountability. Who in your institution, who in your organization is going to be accountable if and when something goes wrong?

SPEAKER_02 15:38

And you bring up a good point, and this is something I've wondered about before and talked to people about before, and that is you've got, you know, five different vendors providing five different AI AI solutions. Yeah, yeah, and chances are you're gonna get a little different information from each one of them. And so kind of like you said, you still have to take respon the ultimate responsibility. The buck has to stop with you.

SPEAKER_03 16:06

And there's also, I mean, again, kind of industry-wide, we use AI so loosely, um, and you've got vendors saying, sure, ours is an AI solution. Well, what kind of AI? Is it generative AI? Is it machine learning? Is it, you know, what aspect of artificial intelligence are you bringing to bear to really deliver a solution that's going to benefit my members? And so, you know, part of it is really knowing what questions to ask your vendors to to dig deep, because the more you know about it, the more you're able to evaluate your risk uh every time you deploy a new solution.

SPEAKER_02 16:59

And I think what um one thing, one issue with human loot that I've experienced myself lately is you tend to think of AI is gonna do these tasks, people are gonna do these tasks. But at some point in in a in a process, in a in a member experience, there's gotta be a handoff from AI to a human in certain situations. And that handoff can either be uh handled elegantly or horribly. And how do how do you how do you get a handle on that?

SPEAKER_03 17:37

Well, one of the ways to do it is at that 40,000-foot strategic level. I mean, credit unions these days, regardless of size, need to take a really close look at at the kind of processes and activities that that occur, especially that are not member-facing necessarily, but are the kind of behind-the-scenes things that actually slow down your member experience. You know, if somebody these days has to wait three days or four days for um a loan approval, let's say, when they're going to chime or they're going to a major institution to um to get things a lot faster, you know, you're beginning to lose out. Um and and so an honest look at what could your institution do better, where could you deploy these tools, begins to help you assess what are we going to need to do to be an AI-capable organization moving forward? What person or people are we going to give that oversight responsibility to? Do we have the policies in place right now to make sure that when we're talking to vendors or when we bring on uh any kind of agency system, will we have thought through all the risk and and how is that going to impact our workforce? You know, are we making it easier for people to spend more time with the members, you know, to really jettison some of those things, as you say, that handoff? It's like if I don't have to um, you know, I I often quote um a specific institution that was dealing with the issue of having to process a lot of um lending for uh boats and RVs during this time of year. Springtime, they always saw a real spike in the number of applications. And there were like 80 different checkpoints that they had to address in order to make sure that application was complete before they could even assess it in terms of um passing off yes or no. Well, they had two choices. It was either hire another employee to help them actually do that, or deploy an AI system that could actually go through that 80-point checklist, not make the decision for them, but actually get it to the place where then one of their employees could make the determination whether or not that loan was going to be approved. It's we're all facing that. Where do we use it to be smarter as opposed to just using it for the sake of technology?

SPEAKER_02 20:48

Sure, sure. So one just one last thing on branches, what does the optimized branch of today look like compared to the the br the pre-COVID branches?

SPEAKER_03 21:02

Well, honestly, every time I see a credit union deploying a branch model that looks exactly like one from 1970, I think, what are you doing? On the other side of the equation, there's a there's a local credit union in my area that have essentially almost created this tellerless uh branch model that they've deployed pretty successfully, um, mostly because they made sure all of their employees were there to guide their members through the experience of it, to help them become comfortable with it, to help them learn how to use this, and also to create a space where, you know what, if if people are doing transactions on their phone, if people are doing transactions digitally, the branch transaction. People coming in to cash a check anymore. People are coming in for two reasons. They're coming in to solve a problem, or they're coming in to deal with a really complex financial issue. And that requires a different space configuration. That requires a different environment. Give people more choice. I mean, think of how we've all become used to uh self-checkout in a grocery store. Um but yet I can walk in and see uh a five-lane drive up and a um you know five-station teller line at a at a branch. You know, that's that's such a waste of resources.

SPEAKER_02 22:39

It is. Now there's been I've heard a few people talk about the idea of um constructing your your your tech stack in such a way that your frontline employees and your members are basically using the same UX. Do you do you see value in that? Because it seems like it would be a good idea if you if if you could get it to work.

SPEAKER_03 23:05

I I think we're going to see that deployed a lot more as the tech continues to evolve. And that's the point I was making a few minutes ago, that the evolution of this tech is speeding up. It's accelerating. And um even a lot of the tech that was deployed like three or four years ago, and people thought, well, that sounds like a good idea, but will it actually work? Now it's been iterated like a dozen different times since then. So, you know, that's why I say part of it requires that continual research to see what's available, what does it look like, and what's the experience of it in practice? You know, can our employees and our members have that same kind of UX? And it really work? Yes. I mean, um, recently I was on a flight and uh it was a connecting flight, and uh it was on an airline that had really upgraded its digital experience on on board. So I popped open the screen, you know, there was my name. All I had to do was confirm um just the my birth date, I think it was. And all of a sudden, there were all my preferences right there. But when it really made sense to me was when I got on my next flight, the movie I was watching on the first flight, I was able to complete it at exactly where I stopped it at the other one. And it's like when those kind of digital experiences happen in, you know, outside of financial services, all of a sudden we begin to ask, well, why can't my credit union know that what I just started on my phone, now I want to finish on my laptop because now I'm home and I have a bigger screen and I can see it. But we're not capable of doing that yet, or we're not capable of having a face-to-face video conversation with one of my credit union staff in that mobile experience or digital experience.

SPEAKER_02 25:26

We're missing great opportunities because that that was kind of the promise when the term omni-channel first appeared 10 or 15 years ago. And it never happened.

SPEAKER_03 25:38

No, but we are we're seeing it get closer to that. And there have been a lot of barriers to that omni-channel kind of experience, but uh part of it's been regulatory. Um, but I think that we keep hinging closer to it, John.

SPEAKER_02 25:57

Well, let's talk a little bit about the impact that technology has had on some, I guess, non-technology issues at credit units. I want to think of specifically is um hiring an HR and where you get your employees. Because once you once you've resigned yourself to going to becoming a remote organization, at least outside of the branch, then that opens up that talent pool to the entire United States of Vienna, which is a good thing and a error could be a bad thing because suddenly, you know, I'm uh I'm a uh um credit union in Sioux Falls, South Dakota, and I'm can competing with a credit union in San Diego for the same talent, and everybody knows it's not minus 14 degrees in San Diego ever. So so talk to me about that a little bit.

SPEAKER_03 26:55

Well, it's interesting because of course um there hasn't been a lot of data in the last like year and a half or so that that points to specifically how credit unions are deploying remote workers. Um but kind of 2023, 2024, we still saw a a pretty significant number of credit unions that were were finding ways to use remote employees uh or were creating hybrid kind of situations. And part of what's driving that is the the lack of available talent in so many markets. One of the things that contributes to that, obviously, is kind of demographic trends that we've been following now for well over a decade, um, but are really starting to come home to roost. And one of the biggest ones here in the US is that, you know, for 15, 20 years, we haven't been having the same number of children. We've been below what's known as uh replacement level um birth rate for a very long time. And one of the practical impacts of that, just last year we've we peaked the number of high school seniors we are going to see in this country. So that number is going to continue to decrease now for the next several decades. And what that means is essentially we have fewer people that are going to be available to go to college. There are going to be fewer people coming into the workforce. And so there's a lot of dynamics that are impacting this question of where will we find the talent? And when we do, will we be able to compete for it if that marketplace all of a sudden has been expanded beyond our geographic footprint? So you've raised some very difficult questions that I think a lot of credit unions are still having to kind of wrestle with. But I do know that there are several out there that are moving quickly to adjust their policies and procedures to make sure that if they identify IT talent that lives three states away, um, but you really need that person and you need them now, let's make it possible for that to happen.

SPEAKER_02 29:30

Yeah, now do you feel that the the infrastructure for remote workers is as secure as it needs to be? You get, you know, people working from their living room or you know, the Starbucks down the street, maybe. Is that all as safe as it needs to be?

SPEAKER_03 29:48

Well, um, that again is a kind of moving target because of course, as our technology gets better to be able to make that kind of secure remote work possible, um, at the same time, we're finding new ways that that is opening you to more vulnerability. And and so it's a constant state of adjustment. You can't, there's no set and forget about this stuff these days. Um, so it's way better than it was five years ago. Um, and think of what the industry went through just to be able to navigate through COVID. Um, you know, setting up those kind of secure environments to make sure that people could actually do that. Um, there's a lot more available now to make that possible, but it does have to continue to iterate.

SPEAKER_02 30:46

Yeah, when we spoke earlier in the week, um, one of the things we touched on was hot topics that most credit union CEOs may overlook. They tend to overlook. Anyway, Ian, I don't remember what you what was number one on your list.

SPEAKER_03 31:03

Well, I think the biggest one right now has to be I don't want to just say it's about stable coins, um, but I think it's about what's happening uh with payment rails and how that's going to be evolving over the next five years, especially. Um but I think one of the things that I did raise the other day, which uh I'm increasingly kind of committed to, is helping people think in a larger way about all that's disrupting our industry right now. Um, you know, we used to talk about those independent areas that were kind of disrupting us, whether it was, you know, demographics, whether it was technology, whether it was mobile technology, what whatever. Right now, there are so many issues converging right now, that I think the larger issue becomes: are we paying close enough attention to all these converging topics? Um, and and seeing the intersection of them and how that's going to end up impacting us a year from now, two years from now, three years from now. And certainly stable coin is is kind of top of mind right now, just because there's such fast movement, and because so many credit union professionals I've talked to this year kind of have convoluted the idea of stablecoin and cryptocurrency. So they kind of put their hands up saying, no, no, no, we're not getting anywhere near that. And and there's a significant difference that I think people really need to understand.

SPEAKER_02 32:56

Now, both of those fall under the broad category of digital assets, correct? Correct. And so so maybe credit unions shouldn't be developing a digital asset strategy versus a crypto strategy or a stablecoin strategy. Do you think that's true?

SPEAKER_03 33:11

Well, I do think that's true. And the thing I try to remind a lot of credit union folks about is simply this. You know, you're not gonna have a member come to you and say, Do you support blockchain? That's not gonna happen. Um, they are gonna say, though, um, you know, can I put this digital currency in my bank account? You know, at some point there will be that question, or more importantly, you know, some of your youngest customers, especially some of your youngest members, you know, they're holding cryptocurrencies, they're experimenting with digital currencies in in such a way that eventually they're gonna want to know, are you paying attention to what's happening in this space?

SPEAKER_02 34:09

So there's there's there's a segment of the population you can correct me if I'm wrong, but there's a segment of the population that will probably never be impacted by stable coins. Is that true?

SPEAKER_03 34:27

Like that's that's pretty true. Um I I would and I don't want to make this just a generational issue because you know I have members of my own family in their 80s and 90s that um are actively you know exploring, you know, they've got their Robin Hood account and they're checking all these things. I think it's easy to fall into that trap. But in the next year, I would say, you know, if you have small businesses that are concerned about cross-border payments, and that could be um even your ag businesses in some of these rural communities, you know, they're buying fertilizer from uh Mexico and Ukraine. Um, you know, you've got some of your members that can look at stable coin as a way to more efficiently and economically move money. And if you're not thinking about digital assets in in a broad way, you really are going to be missing opportunity. And there's been a lot of debate in the industry uh as rules are promulgated around uh both the Genius Act and and certainly most recently the Clarity Act, whether or not someone outside of those uh stable coin issuing organizations can actually offer any kind of yield if somebody decides to hold stable coins in a in a wallet. There were a lot of questions about well, what if Walmart or uh you know, or you know, Amazon offers their own cryptocurrency, their own stable coin, um, where it's no longer a speculative asset, but it's simply a way to exchange money digitally in a very easy way. And what if they can incentivize me to do so? You know, the judgment is still out on whether or not we'll see that develop. It still could. Um and part of it depends on on how this Clarity Act um ends up getting determined.

SPEAKER_02 37:00

And I and I think that's the important thing because I think you you hear a lot about stable coins. I think a lot of executives are probably wondering how are stable coins gonna affect my members? And the and the answer is a lot of your members probably won't affect at all because just like any other technology, there are specific use cases for stable coins where it makes sense. It's not stablecoin isn't gonna just replace everything.

SPEAKER_03 37:28

Exactly. It's not like we're giving up fiat currency uh in favor of this particular any one digital currency. But I have to say, this this signal um that I mentioned earlier about these 140 um organizations that have come together around one uh stable coin. Um I'm gonna be watching that really closely over this next year to see, because when you start bringing in players like Stripe and Bank of America and American Express and Visa and MasterCard, it's like um, I mean, let's be honest, for credit unions, you know, you're never most credit unions are never going to even have to address the question of whether or not they need to issue their own stable coin. What they will have to address at some point is when one of their vendors uh or their core providers come to them and say, Do you want to flip this switch on, which allows your members to either house or or exchange stable coin within your environment? Um, those questions will have to be addressed at some point.

SPEAKER_02 38:50

So at Finoponymous, we started six years ago as a tech publication for credit unions. We wrote tech articles directed to credit unions. And we've recently so we're bringing technology, fintech information to credit unions, and and just recently, this year, mostly this year, um, we've decided that we we could play a bigger role in in the whole ecosystem and also uh um be a means to get uh uh credit union information into the hands of fintechs. And our premise is that rather than thinking of uh uh credit unions and community uh community banks as a single market, fintech should be thinking of credit unions separately and understanding the unique value proposition of working with a credit union rather than a community bank. Not this is any I'm not disparaging community banks by any means, but they are two different, they are different in many different ways, and I think they're different in ways that are advantageous to those fintechs. Do you do you think that's the case?

SPEAKER_03 40:00

I actually do, and I agree with your point that there are a lot of similarities. And on the one hand, you know, fintechs can position themselves to partner with and and work with um institutions um on the whole, because quite honestly, John, I can point to community banks that look more like credit unions than you know, some credit unions and some credit unions that look more like.

SPEAKER_02 40:32

Exactly. Vice versa, too.

SPEAKER_03 40:34

Right, exactly. Um, so but as a whole, there are very unique aspects of the credit union value proposition that requires fintechs to have a much deeper and closer understanding of how that translates to member experience, how that translates to operational um kind of culture. Uh and I and I think that oftentimes if you don't have environments where fintechs can have exposure specifically to a credit union audience, um, you you can actually create an environment where um people aren't as forthcoming. I've seen conferences um you know that try to deal with both audiences. And I find that when you get a group of credit union and a group of community bankers in the same room, unless you've given them a lot of permission up front, you know, they can be very close to the vest when it comes to sharing, you know, their own journeys. So I think in order for fintechs to really understand um, you know, some of the unique challenges that that credit unions face, it can be important to create those kind of spaces, those kind of environments where it can happen. Finivate's been doing that. I think um fintech meetup has been doing that. Money2020 has been doing some very uh focused um credit union only activities, and I think that's a smart move.

SPEAKER_02 42:20

Yeah, we're actually trying to get more involved with that. We were at uh well at Finavate Spring. I uh moderated panel discussion, did a little presentation on sidecar strategy and and kind of MC'd their the CU showcase. So so we're trying to do our part to uh to make that happen as well. But let's let's to talk about data for a minute because I've it seems like it's been a good 25 years since I heard the first credit union told that they've got all this amazing data that they should be able to do some amazing things with. And 25 years later, it still seems to be like it still seems to be a struggle, especially now that uh AI is on the scene. It's like now you can do nothing 10 times as fast. So so so so so why why is it such a challenge to get some good use out of that data?

SPEAKER_03 43:16

Well, I I think there's a couple of things going on here. Uh one of them uh has to do with the sheer volume of data that we're able to store and and access these days. That's certainly changed. Um, but honestly, another reason is that a lot of institutions have been kicking this can down the road for a long time. Uh they know that their data lake isn't clean. You know, they know that they've got a loan officer over here that keeps data in an Excel spreadsheet, and he guards that or she guards that, you know, like it's their own little fiefdom, instead of saying. You know, we have to have not only a more universal kind of view of our members, really, so we can understand what their behaviors are about, but we have to be able to mine our transactional data so we can actually deal with people contextually. And I think there we're definitely missing a lot of opportunities. My own credit union is an absolute example of that. Um a couple of experiences I've had. One most recently, I paid off my mortgage I was sharing with you the other day. Thanks. I mean, it's kind of a big milestone, right? Um, and so while operationally they sent out the the paperwork necessary that acknowledged the payoff of that mortgage, but it came to dear valued member with with no indicator whatsoever that um it was something to celebrate. I I wasn't looking for balloons and party favors, but I was looking for an acknowledgement. Hey, folks, I mean, you missed an opportunity here to like potentially say, hey, look, you've got a lot of equity in your home right now. If you want to remodel your kitchen, if you want to do something else, you might want to consider that. And if they had paid attention to my transactional data, they would have seen I've spent a boatload of money at Home Depot over the last six months. That might be a really clear indicator that I'm trying to make some improvements to the home now that it's paid off. So again, it's just a tiny, tiny little example of AI is going to help a lot of institutions make some very smart overtures and outreach to their members because of the data that they're mining. And if your data house isn't in order, you're going to be missing those opportunities.

SPEAKER_02 46:10

Um, last thing I wanted to talk about is Gen Gen Z. Um, credit unions are always talking about how to attract Gen Z. It's because we got better rates and we this and that, better service, blah, blah, blah. And in my mind, Gen Z is all about causes. Gen Z is all about democratization. And that sounds a lot like credit unions and not a lot like the bank down the street. And I just wonder if credit unions are not leaning into that enough when they're trying to reach Gen Z, because they're never going to be Chase or Wells on the technology um game game board.

SPEAKER_03 46:51

Right. That's that's entirely it. And one of the things um there was some research out, I think it's from JD Power, that pointed to the fact that of new accounts that had been opened in the last quarter of last year, that the largest percentage of new accounts went to Chime. The reason for that is certainly that Chime, more than any, speaks to the real pain points that a lot of Gen Z are facing in terms of cash flow, cash management, all of those things. And so while Chime was be able was able to align with that particular issue, you know, again, you're right. I think credit unions are missing the opportunity to tell the part of their story that's going to align with other aspects of that Gen Z behavior, including those that want to be involved in things that make a difference in their communities and things that make a difference in their world in general. And often now, a lot of credit union marketing, a lot of credit union outreach is spending a lot of time trying to make the difference between that and another financial institution. You know, we're member-owned, we're local, but you know, we have better service, etc. Instead, they should be talking about those things that the Gen Z uh potential member really wants to hear. It's like, do you see me and what my needs are? And do you see my passion for making a difference in the world around me? And I know you've got to be doing it, but if you're not talking about it, you know, you're missing an opportunity.

SPEAKER_02 48:45

I agree 100%. Now, last question I always ask everybody is do you reach under your desk, pull out your crystal ball, and give me one prediction on any topic you choose.

SPEAKER_03 49:01

Whoa. Um that's that's a good one. Um I think that probably the easiest prediction for me to make is that by the end of this decade, so only four years from now, you know, we could see as many as three to five hundred fewer credit unions in the United States. Part of what's driving that is not only the need to continue to kind of grow and uh achieve some level of scale, but more importantly, I think it's because what we've talked about earlier, there are a lot of credit union leaders that just aren't paying close enough attention uh to what's happening in the financial services environment overall, what's happening outside of day-to-day banking, and and they're missing important signals. And I said to you the other day, and I'm gonna drop this on you right now. Um, I really think that people have to move outside of their comfort zone because the comfort zone is where a lot of credit unions are gonna go to die.

SPEAKER_02 50:22

Amen, brother. All right, well, I uh I want you to know that most of the tech solutions for C's episodes go about a half hour. So it's always it's always good when we when I look up and we're almost at an hour, and I wish we had another hour to talk even more. So this is this has been a great uh great episode, great conversation. I really appreciate you being with with us.

SPEAKER_03 50:48

Thank you, John. I really appreciate the invitation. I mean, there's there's a lot going on in the industry right now, and uh I want to see credit unions thrive.

SPEAKER_02 50:59

Me too. All right, thanks a lot, man.

SPEAKER_03 51:02

Thanks.