LAS VEGAS–There are some issues around which credit unions would really benefit from coming together—including fear, according to two technology executives and one board member.
Speaking to that issue and offering their perspectives to the Underground Rock Festival: Xtreme Thought Leadership event in Las Vegas—which was hosted by Mitchell Stankovic Associates and broadcast live on YouTube—were Stephen Bohannon, founder and chief strategy and sales officer with Alkami; Michael Maxwell, a board member with SCE FCU in California, and Amber Harsin, CEO of Prodigy in Utah.
“You have to get over your fears or your worst fears are going to be realized,” said Bohannon. “Work from home is one example. Credit unions were worried about how to keep their fingers on the pulse of the employee base and the membership if they don’t see them. The reality is it’s a fear, but you have to get over it. I think we’ve done a pretty good job as credit unions in moving to the digital self-service base. But with employees, you are going to have to get better at that. For call center reps, you should be recruiting nationwide for that. That allows you to even extend your hours.”
Another issue creating fear, said Bohannon, is cryptocurrencies. “A lot of people say, ‘I don’t understand it.’ But PayPal has 20% of their users using it.”
The Reality
“The reality of the mega-banks and the direct consumer fintechs is they are funded with literally billions of dollars to put into technology to come after you,” he said. “They say, ‘This is what credit unions like, this is how they move, this is the direction at which they travel, and we can come in and disrupt that member and pull that member.’ The good news is that plan and strategy is predicated upon the assumption you’re going to stay still. You have to be moving. If you’ve doing what you’ve always done, it’s easy to get a lock on you.”
Bohannon said he finds it especially “confounding” any time he hears any board member say they are not “tech savvy.”
“If you hear that, you need to tell them they are in the wrong business. We are not a bakery,” he said. “We are in the financial services technology business.”
Diversity of Thought
Michael Maxwell, a board member with SCE FCU, still recalls when he was younger and serving on the credit union’s supervisory committee and he was asked by one regulator how old he was. He said one way to get over fear is to have more voices in the room in order to get greater diversity of thought.
“I am a Millennial, but my generation is already done with ‘How do I bank?’” he observed.
What younger generations—and new competitors—are going to be reacting to and competing with, respectively, is decentralized financing, also known as defi, he said. “Fintech is threatened by defi. We have to go further than the fintechs and we have to have an eye on the future. We have to hop over those fintechs and get to the next stage.”
Power of Partnerships
Prodigy’s Harsin said one way to get to that next stage would be to leverage all of the cooperative powers credit unions have, including CUSOs.
“Why can’t we all partner together as CUSOs and network partners to form additional partnerships for control of what that future looks like?” asked Harsin. “Let’s take control of our technological future. Tech doesn’t always know better what you need. If we can partner together, that really that creates such a strong opportunity to do the things we are talking about, such as crypto. Instead of letting tech drive our future, let’s drive our future ourselves and let tech help fashion what that is going to look like. We are going to use the money members give us every day as interest on those loans to help solve their problems and not just the interests of Wall Street and the big tech firms.”