NEW YORK–The management teams of CO-OP Financial Services and TMG offered credit unions insights and updates on the acquisition of the latter by the former.
As announced earlier this year, CO-OP has purchased the 51% of TMG that it did not already own and is now in the process of integrating the two companies. During a breakfast discussion at CO-OP’s THINK 17 meeting here, Todd Clark, president/CEO of CO-OP; Shazia Manus, chief product and strategy officer with CO-OP (and former CEO of TMG); Nick Cancanes, chief information officer; and Samantha Paxson, chief marketing and experience officer (who acted as moderator), offered an update on why the acquisition was made and what plans call for.
Here is some of what was discussed?
Q: Can you tell us more about what brought this acquisition about?
Clark: The actual partnership started six years ago when (CO-OP) felt a full-service credit offering was the next step in completing the full product offerings. Five years ago, CO-OP bought 49% of TMG. That worked well for years. But as I met recently with 50 or 60 clients, I heard words like ‘disjointed’ and ‘not on the same page.’ I started pressing on that a bit more; it was awkward that two sales teams were approaching the customer at the same time and they were not saying the same thing. I come out of a sales world, and sales people get paid for what they sell, so it’s not surprising. But what really headed me down this path was when I heard about how we interacted on the back end. If you have a debit problem you call CO-OP, and if you have a credit problem you call TMG. It just didn’t sound like a good customer experience. I called (Iowa league president and TMG parent company CEO) Patrick (Jury) and said we have a problem, and we need to talk about it.
Q: How are we finding efficiencies and customer focus?
Manus: The goal is to take all of the components, the tools, technology, the support and the business modeling approach that we had, and BI, and integrate all that. It’s going to be a multi-year, very reflective, very intentional approach. We will start by taking some of the small wins, such as the shared fraud strategies. With the databases, we are looking at how can we make it consumable by the client? So, there is a lot of focus on disseminating the information to our clients so the users can use it to drive their business strategies forward. The consultative client support model is where we think we have a huge opportunity
Q: Nick, what is your view on this idea of an integrated ecosystem. How will it be beneficial?
Cancanes: I have a long history being a part of acquiring banks and integration and what that means to client satisfaction. There is always leverage there. Todd (Clark) says we should be a world class technology and services organization, and it’s my view there should be no other place you should go for your technology and services. You will be able to leverage the power we have here and have your own piece of it, or we can do it for you. The data piece is massive, especially when you talk about how we can drive more value to our members around financial security. I think there is tremendous leverage and couldn’t be more excited about the opportunity.
Q: What will be the big benefit for each credit union
Clark: I think it falls into two big categories. One is we have to keep all the credit unions in this room, big or small, we have to keep them competitive and top of wallet. Interchange revenue is so important. The back-half of that is the tools can’t be complicated and difficult to use. At one credit union, I saw some cut and paste on two different forms from CO-OP. If we could save the CSR a couple of minutes on each, that could save thousands of hours for the movement. This is not rocket science. We can save CUs time and money while staying top of wallet.
Q: Is there anything you want CO-OP to stop doing?
Clark: Yes, I want to stop making our problems our customers’ problems. We have a huge number of inefficiencies inside CO-OP, and what we often do is pass those on. We need to look at everything through the customer lens, the member lens. We have a lot of work to do, but over next 12 months you will see a constant evolution in how we use our data and how you can use our data.
Q: Where do you see the first opportunity to help our clients?
Cancanes: I think the first step is a paradigm shift in ownership and accountability of the data and the processes. It’s taking ownership of the data and the process and understanding how it fits in the customers’ process and then driving that back to our vendor partners so they are delivering on our behalf. I think that change in mindset breaks down a lot of the silos we have. There are not a lot of new things out there. It’s about how you deploy it and how you align it to your strategy.