RANCHO CUCAMONGA, Calif.—CO-OP Financial Services announced it has acquired Des Moines, Iowa-based TMG, and is restructuring its leadership team in the process.
“The acquisition of TMG and the evolution of our leadership team are designed to maximize benefits for the clients of both companies,” said Todd Clark, president. “We are creating a new CO-OP that embraces technology and best-in-class service delivery to create a seamless, secure and personalized experience for our clients and their members, however they choose to interact with their credit union using a CO-OP product.”
CO-OP had been the minority owner of TMG and purchased all remaining shares of the company from the Iowa Credit Union League for $100 million. With the acquisition of TMG, CO-OP said it becomes a fully integrated, comprehensive payments services company, realizing the vision of the original partnership formed by the two companies in January 2012. CO-OP branding will be given to all TMG operations.
“The combined forces of TMG and CO-OP provide credit unions with a single point of entry to the most innovative, tailored, cost-effective products and services as they prepare for a rapidly transforming payments landscape,” said Clark. “We will offer the market greater integration of the two company’s product lines and a simplified, predictive client experience. We will also leverage artificial intelligence, custom business intelligence, consultation and deeper security offerings that marry machine learning and human analysis to perfect authentication, reporting and anticipation of fraud.”
TMG and CO-OP have partnered for the last five years and that partnership “has been extremely successful for both organizations,” Clark told CUToday.info. “However, after I joined CO-OP I heard a lot of credit unions say it would be better if our two organizations worked more closely together.”
Two Companies
Clark noted that prior to the acquisition, CO-OP and TMG were two very much different companies.
“For example, you have a problem with your credit card you call TMG. But you have a problem your surcharge-free ATM network you call CO-OP,” said Clark. “We want to simplify things for our credit unions. So we looked at this from the perspective of what is best for our credit unions and their memberships and decided to take this course,” said Clark.
Clark said CO-OP and TMG did consider more tightly integrating operations instead of making the acquisition.
The acquisition complements CO-OP’s $25-million investment in technology infrastructure and product innovation in 2017, the CUSO stated.
“CO-OP’s investment emphasizes improving the industry’s ability to fight fraud while advancing a positive, sophisticated consumer payment experience – transforming both the company and its offerings to meet the rapid digitization of payments,” the company stated.
CO-OP said that its new organizational structure is designed to bring the “best minds in the business” together to efficiently integrate the new combined organization, optimizing the benefits to the companies’ respective and mutual clients.
“We have been in this partnership journey for five years under CO-OP shared ownership and TMG has grown exponentially,” said Shazia Manus, formerly CEO of TMG, who will report to Clark and become chief product and strategy officer. “We have developed new products and services from this unified organization and leveraged both of our company’s innovation skills and expertise. But we felt it would be best for our credit unions to find a way to bring all of these different, moving parts together under one ecosystem.”
Manus said that all TMG employees will keep their jobs, current salaries and benefits.
Clark said greater efficiencies will come from teams working under the same organization and from integration of technologies.
“Efficiencies will come from offering better product and services to our credit unions and integration of technologies across the board,” said Clark. “We are focused on the efficiencies we will bring to the back offices of the credit unions we serve.”
Executive Changes
In addition to Manus, CO-OP said it is adding several executive management positions and making new appointments to build out its service delivery to credit unions, including:
Nick Calcanes, previously with Fiserv, joins the executive management team (EMT) as chief information officer in a move to extend that position’s role to provide more technology strategy and integration between CO-OP’s internal infrastructure and product offerings, the company explained.
Kari Wilfong, formerly CFO/EVP, has been elevated to chief financial officer/chief administrative officer, in recognition of her leadership over the strategic day-to-day operations of the enterprise, including finance, security, enterprise risk management and legal counsel, the CUSO said.
Samantha Paxson joins the EMT and extends her marketing duties to become chief experience and marketing officer. Paxson will lead the way CO-OP’s brand experience is delivered through message, product, value chain and systems.
Jim Hanisch, formerly EVP, network operations and corporate development, has been appointed chief operating officer, enabling Clark to focus on overall strategy and long-term client needs.
Mathew Kardell, previously with First Data, joins the EMT as chief revenue officer, responsible for managing and maximizing the credit union-owned company’s sources of income.
Jill DeNiro, formerly EVP, human resources, has been named chief people officer, signifying the importance of cultivating talent as CO-OP’s greatest asset, the CUSO said.
Paul Love, previously with the Federal Home Loan Mortgage Corporation (“Freddie Mac”), joins as chief information security officer, reporting to Wilfong. Love’s duties are devoted to strengthening CO-OP’s security approach in the fight against fraud on behalf of clients.
“We believe the combining of CO-OP and TMG adds up to a ‘dream team’ of the payments and financial services industry,” said Clark. “It’s an exciting time. With our expanded leadership team, CO-OP’s and TMG’s dedicated employees, and a well-defined go-to-market strategy, we have never been in a better position to lead and serve the credit union movement.”
Manus noted that TMG Financial Services and Coopera, both subsidiaries of Iowa CU League, are not impacted by the acquisition. TMG will remain the processing ARM for TMGFS.