What happens when you throw a bunch of ex-Googlers into an office in San Mateo California?
Enter Upstart, a new breed lending company that helps financial institutions – credit unions very much included – make more, better unsecured loans and also do auto refinancing.
Upstart comes at lending with a focus on artificial intelligence, machine learning, and doing a lot of data crunching. Using Upstart’s analytics an institution approves a higher percentage of loans – but also enjoys a lower default rate.
How can that be? According to Jeff Keltner, who heads business development at Upstart and is himself an ex Googler, lots of models plain look at the wrong data when making credit decisions.
Upstart has a page full of dazzling stats about how its models perform versus traditional lending models. Check it out.
20+ years ago I interviewed the Google founders for MIT’s Technology Review magazine. Here’s that story.
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That’s why you want to pay close attention to this podcast with Joe Keller whose title – drumroll please – is vice president of digital assets at Visions, a $6 billion credit union in upstate New York.
Right, Endicott, New York. Not Cambridge Mass or San Jose Ca.
Endicott. Which is pretty near Binghamton if that helps place it.
Keller, whose background involved big banks, consulting firms, and startups, might have seemed an unlikely credit union hire.
You’ll hear Keller’s first reaction to the suggestion – then discover what persuaded him that in fact this was exactly the job he wanted and why getting this right at a credit union genuinely matters.
Incidentally this show is about way more than Bitcoin. Lots more. We are deep into an embrace of digital assets and the institutions that get that now will have a head start.
Keller tells how he plans to help Visions get its head start.
And he also tells what he thinks a credit union’s first steps into digital assets should look like.
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Be honest now. Do you have a systematic way of measuring how effectively you are leading? Or is it all seat of the pants guesswork and, well, we have to be doing okay because the lights are still on?
Let’s be honest. A lot of credit unions are going out of business in the next decade. A lot.
Right now there is a flood of fintechs into the credit union orbit and many come with promises and promise – but a lot of them won’t be open in five years.
Ineffective management and leadership will figure into many of these demises.
Enter Julie Markee. She is a professional implementer – you haven’t heard that title before, have you – with EOS, a company that teaches what it calls an entrepreneurial operating system (this EOS).
In this podcast Markee – who has worked with a number of companies in the credit union orbit – offers up a fast view of EOS’ thinking and processes,
Case in point: are your executive meetings a productive use of time – or do you leave the room thinking why the heck am I spending so much time on this? EOS has a fast approach to meetings that will up effectiveness. You want to hear that.
Do you have the right people in the right seats? That’s a core EOS principle and when it’s not in place that organization will struggle to succeed. Find out how to get the right people in the right seats in this show.
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Seth Brickman’s career includes the US Navy (remember Top Gun? That was his motivator). Then he landed at Microsoft, he co-founded a startup Nicolette which builds tools to help parents make informed decisions about their baby’s health, then he was at Amazon where he earned a patent involving Alexa and the content delivered to its screen.
Now he is at QCash, a CUSO created by Washington State Employees Credit Union (hear CU 2.0 Podcast #56 with past QCash CEO Ben Morales).
Why QCash? In the podcast Brickman tells why but the short version is that he had reached a point in his life where he wanted to do a lot of good and he joined QCash because it seemed to him to be the vehicle that could make that happen.
Listen to this section of the podcast multiple times. Take notes. You want to get highly talented techies into your organization. Brickman tells how.
At QCash, his dreams are big. The CUSO presently serves 50 credit unions. His goal is to double that number by year end.
Partly it’s that Brickman has tweaked QCash’s product messaging. It no longer refers to itself as an alternative to payday lending. Now it’s about helping members through what QCash calls life events.
Don’t think QCash is abandoning the people it was created to help. It isn’t. The QCash focus remains making loans – oftentimes to individuals who might not qualify for traditional lending products – to help members deal with life events, from a blown car transmission to false teeth.
What’s exciting about QCash is that its loans do not involve a traditional application. It connects to the core and that gives it ample insight into this member who wants a loan.
Brickman also is expanding the QCash toolbox – for instance there now is an emergency response loan that will let a participating credit initiate lending to community members after a natural disaster – an earthquake, fire, even Covid-19 – literally within minutes of the event. How cool is that? The credit union can legitimately call itself a financial first responder.
What could be more in the credit union spirit than that?
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That’s because today’s guest, Barb Lowman, president of CUNA Strategic Services has a huge portfolio of responsibilities – and she need to succeed to keep the credit union sector thriving.
We are in existential times. Break out your Kierkegaard because, honestly, the future of thousands of small and even mid sized credit unions does not look bright as pressures grow in technology, in regulation, in compliance and you know the lengthening list of issues that credit union CEOs wrestle with.
Lowman’s job as CUNA Strategic Services is to find ways to give credit unions competitive edges and she is looking hard at technology. For instance: how can small credit unions have good, contemporary core systems? We talk about exactly that issue.
We talk a lot more tech too – but know we also talk executive compensation and board recruitment and those are issues that smaller credit unions in particular fight with.
Can you guess the typical CEO retirement package at a small credit union? Listen: Lowman tells us.
And when you hear it you will know why many credit unions struggle to survive when a long serving CEO retires.
Lowman is a lifelong optimist. This is a cheery podcast.
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You know the numbers. In just the first three quarters of 2021 the NCUA approved 117 mergers and there will be more this year. In the mix is an ever growing number of credit union acquisitions of banks.
Here’s the million dollar question: post merger how many members (or bank customers) will flee to a new institution. If you are going to have to learn how to deal with a new institution, why not make it a completely new institution?
Hmm.
Then I saw an article by Glia CEO Dan Michaeli in Credit Union Times that put out an entrancing thesis: “Credit unions undergoing a merger can benefit from modernizing member service with a digital-first approach..”
What if?
What if you not only can lose fewer members but get more wallet share?
Just maybe, says Michaeli, you can do exactly that.
In this podcast he talks about the 2022 credit union imperative to master digital member experience.
It no longer is nice to have. It’s an authentic must have and do.
Incidentally, Michaeli also believes that a good member digital experience can help boost employee satisfaction. That’s news you want to know in the era of the great resignation.
You say you think you heard Michaeli on this podcast before? Bonus points are yours. Episode 115 was his first appearance.
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Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto
The company name flows much more smoothly off the tongue: Engageware.
Before it had been TimeTrade SilverCloud and that was its name a year ago when CEO Bill Clark guested on this podcast. Now he’s back for an encore.
The company’s business remains helping companies – credit unions very much included – get more member engagement through whatever channel and tools the member chooses to use.
Engagement is critical today. You know that. That’s also why Bill Clark is a man to talk with because he knows engagement and he also knows that credit union execs are tempted by many new shiny objects but do they deliver?
This year he is back with a new report with new findings and some of what you will hear in this podcast will blow your mind.
Such as? Chew on this: Consumers will stay skeptical. We just aren’t as trusting and believing as we had been and that changes a lot. Including relationships with credit unions. Clark elaborates on that theme in this podcast.
Another finding: 40% of bank customers say they are willing to leave their primary financial institution for digital banking that compares to a great online shopping experience. Do your digital channels measure up against Amazon’s? They better.
35% of bank customers nationwide say it is not easy to find even simple answers on their banking institutions’s mobile app or website.
You and your peers say digital is the priority in 2022. But what does that mean? Clark talks us through this.
Listen up: this is a podcast that will refresh what you really know about digital and member engagement.
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Is the company name pronounced Datava, Data-va, or, what’s your guess?
Just as the pronunciation of the company’s name may prove slippery for many, so too is it difficult to neatly sum up exactly what Gordon Flammer’s company does.
But I can tell you this: when American Heritage Credit Union worked with Flammer, it grew by $1 billion. Organic growth, Not acquisition. That has to grab your attention. Here’s a link to a CUBroadcast show about this $1 billion miracle fueled by Flammer’s unique way of looking at credit unions and their data.
Here’s a link to a press release about the same fantastic growth.
His starting point: a lot of software and tech tools sold to credit unions do not do what they are promised to do and, importantly, they do not solve the problem the credit union wants solved.
So Flammer takes a different kind of look at what ails a credit union and he comes up with different kinds of solutions.
Much of what the company works on is creating better sales tools, dashboards, monitors, and so on. But there’s more in Flammer’s tool box.
Along the way in this podcast Flammer explains why his company is a CUSO – he is a big booster of the format – and he also muses about the plusses and pitfalls of working with venture capitalists. For some – point a finger at Flammer – a CUSO is simply a better path.
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Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto
You learned this in high school: You are who you eat lunch with. That is fact. You might have fancied yourself a brainiac…but if you lunched with the sweat hogs, well, the world knew otherwise.
Which brings us to this cautionary wisdom shared recently by Kirk Drake, founder of the CU2.0 consulting firm and CEO of CUSO Ongoing Operations. There are three kinds of fintechs, said Drake. There are those that want to eat your lunch (think Rocket Mortgage). There are those that want to sell you lunch (Zelle). And there are those that want to lunch with you.
Drake offered that observation at a small CU2.0 gathering of credit union executives and fintech entrepreneurs – so that made this especially pointed commentary.
By Drake’s measure, credit union executives want to dodge the first group of fintechs – you are zebra on the savannah and they are hungry hyenas.
As for the second group, there are some that want to sell you lunch who are worth paying. Do you want to develop your own core system, for instance?
But the ones you really, definitely, want to get to know are the fintechs that hope to partner with credit unions in relationships that are intended to benefit both parties.
And the good news on that front is that nowadays there are lots of startup and mid-stage fintechs that are hungry to share a meal – and maybe earn some money – with credit unions.
Case in point of a fintech that wants to lunch with credit unions: Quilo, a quick installment loan company – its AI driven technology offers loan decisions literally in seconds – that is co-founded by Don Shafer, who also co-founded Kasasa, which was formed to offer community financial institutions – credit unions – competitive checking products.
The Quilo game plan is similar. Shafer’s plan is to put Quilo loans into the services of credit unions and community banks who will own the paper and set the loan decisioning terms. Quilo also encourages credit unions to enlist their local merchants in offering Quilo to their customers.
It’s not Buy Now Pay Later, it’s not a conventional credit card – but Quilo is a way for a consumer to set specific terms and payment schedules for the purchases they make.
At Carter Credit Union in Louisiana, CEO Joe Arnold told me he is an early Quilo adopter and that’s because he sees the fintech’s tools helping his members, merchants in his communities and the credit union.
Arnold also indicated he believes Quilo will bring in more members to Carter – very probably younger members.
Want more details on Quilo and how Arnold sees it helping the credit union? Listen to this podcast with Shafer and Arnold.
Know too that there will be many more fintechs such as Quilo. Why? Credit union money is looking to seed them.
An advocate of this trend is Ray Crouse, CEO of Parsons Federal Credit Union and board president at NACUSO. In this podcast Crouse presents the case for credit unions investing in CUSOs that are set up to stimulate fintech innovation. That investment strategy is permitted under NCUA regulation and it is gaining favor, said Crouse. Crouse has skin in this game because, as he discussed, Parsons has made sizable fintech investments and his plan is to make more
More optimism – and money – comes from Martin Walker, a vice president at venture capital firm Next Level Ventures which administers the Curql fund, formed to help fund fintechs with potential to help credit unions grow. Curql has a warchest available for investing of $250 million which makes it a real player. The ambitions are large but, said Walker in this podcast, the interest on the part of fintechs in helping credit unions grow is real and growing.
Add this up and there are fintechs with good ideas and increasingly they are getting investments aimed at involving them in credit unions.
So remember to be picky about who you eat lunch with. You were and always will be who you lunch with. With tech make sure the companies are ones that sincerely want to lunch with the credit union.
Ask Very Good Security – a San Francisco based fintech – what it does that is different in terms of securing member data and the answer is blunt: what it does is different, better, even very good. To quote from the company’s website about the question that spawned the solution: “Was there a way to secure the data, take it out of scope of liability, and still allow it to be used and exchanged? There was. Their solution became Very Good Security, a new type of data security company with a revolutionary way for companies to secure data.”
Bold idea?
Absolutely.
But face up to reality: data security has been a train wreck for some years. How many times have your credit card numbers, even SSN, been stolen by hackers in the last decade?
There has to be a better way.
Very Good Security believes it has that way and Elan Mevasse, the company’s credit union lead, is on the podcast to tell what the company does and how it does it.
There’s some technical speak in this show – “tokenization” and suchlike – but on the whole this is a PG rated episode that will be accessible to all.
Listen to the end too. There’s a minute or two devoted to how Very Good Security helped Ukraine based engineers and their families relocate to safer ground as Russia invaded the country.
Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com
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Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto
