Leaders in Lending
Leaders in Lending

Episode · 4 months ago

How Credit Unions Can Prepare for a Successful Future

ABOUT THIS EPISODE

No matter how many shiny advertisements fintechs put out, it would be a mistake to confuse them for omens marking the end of traditional financial institutions like credit unions.

Credit unions have been building something for generations no fintech can compete with them on: trust.

Fintechs won’t replace credit unions — but the successful ones from both camps will partner with one another.

That’s something today’s guest, Dan Berger, President & CEO at NAFCU (National Association of Federally-Insured Credit Unions), is willing to bet on. Over his many years of experience working with credit unions, he’s learned the obstacles facing many — and how they can overcome them.

In this episode, we discuss:

- The current regulatory landscape for credit unions

- Why fintechs can’t capture the trust credit unions have built

- How partnering with fintechs enable credit unions to expand capabilities

- Why focusing on member needs is paramount to building trust

Want more lending advice? Find us on Apple Podcasts, Spotify, and here.

Listening on a desktop & can’t see the links? Just search for Leaders in Lending in your favorite podcast player.

Smaller FIS, you have limited resources,and so you really have to be obsessive about what your member needs or whatyour customer needs, and then you know punch through that noise and then findthat appropriate partner. You are listening to leaders andlending from upstart a podcast dedicated to helping consumer lenders,grow their programs and improve their product offerings each week. Herdecision makers in the finance industry offer insights into the future of thelending industry, Best Practices around digital transformation and more, let'sget into the show, welcome to leaders in lending I'm. Yourhost, Jeff Kelner today were featuring. My conversation with NACE president andCEO Dan Burger then gives us a great perspective on advocacy priorities.What he's seeing from regulators in Washington and also the key prioritieshe's hearing from the Credit Union members that he has? I think it's agreat insight into some broad industry trends and really useful conversation.It's also one of a number of recent conversations that aren't withspecifically lending executives from banks and credit unions, but subjectmatter experts in areas I think, are really interesting for the audience. SoI'd love to ask you if you have suggestions for specific guests ortopic are as you'd love for us to dive deep into I'd, love to hear those I'measy to find on linkedin or you can just email me a jeff at upstart. I'dlove to hear your thoughts about other guests in topic areas we should diveinto on the podcast, but for now please enjoy this conversation with Dan BurgerDan thanks so much for join of the podcast. I really appreciate yourjoining us today. I look forward to it. Yeah I'm looking forward to a goodconversation, so you know one of the things I wanted to give you anopportunity to do up front is I know that that you know natty's, not not abank or a credit union, but would love for you to kind of just give us thequick background on the organization and kind of the role you play in theindustry for any of our audience, who aren't familiar with you, yeah thanks,you have to re, are a national trade association in The Washington DC area.We advocate it's our job to help the five thousand crediting across Americathan I term serve a hundred and twenty five million American consumers andit's our job to create a legislature in Regato y environment and Washington DCthat helps them continue to grow and thrive and then another part of that isa revet partners, and we have a preferred partner program here. Sowe've bet thin text and other service providers to help cratin grow up,because we do read things here. We help credits, grow, grow and grow. So it'sour job to put as many tools in the tool box as possible. The help creatinga grow up and that's our focus on our mission in actual mission statement- isto strengthen credit news and an that's what we focus on here at atchew. Wehave a hundred and twenty five million consumers that are served by ourmembers or not just in the US they're global. You have some Cretins out therewhere there in federal pinted that have membership around the world, and sothey need to have that kind of exposure to thin tech and a regato in andlegislate environment that allows them to operate. I love the simplicity ofgrow growth like real estate, right, location, location, location. You knowwhat's important when you got it three times, that's exactly right. THAT'S OURFOCUS! Well, good focus from an advocacy point of view. I mean one ofthe things. Whenever I talk to people and Washington, I know the the bideadministration isn't really new anymore, but I do think we're on the verge ofyou know, seeing some of the real impacts of changes to regulator, bodiesor legislation. I'm curious. What of the major focus areas you have thethings you're hearing from your members and that are kind of top of mine froman advocacy point of view in DC. Most of the CEOS that I speak to you on adaily basis want to be left alone, so they they already know the groups thatthey have to jump through from a regulatory standpoint. They just don'twant any legislative regulatory spite anything new, because that just haltseverything everything comes to a screeching halt. To have to do things.Sometimes you have to change processes with their core processor, for whateverit is. Their internal systems have to...

...be changed in order to provide data forsome of these, like the CF and the NA, so there's no disruptions and they canplan and, more importantly, execute throughout the year, whether it's thisyear or two or three years down the road. That's extremely helpful. Theyjust don't like these surprises that come up for exam when dot fright cameup. That was extremely disruptive to the financial services industry,including crediting in, and so no surprises. We like expectation just Sol,almost any business, no business out there, like surprises from a regulatorystandpoint, and that's what they's telling me said: Hey just no surprises.Let us do our business, let us serve the hundred and twenty five millionAmerican consumers out there and let us do what we do best in providing youknow, loans and loans and other products to to their members, and sothey just leave us alone is kind of the onto so they're generally happy withthe current the current environment. Just saying we don't want to see. Arethere any specific areas where they are looking for change, or you know,clarity, guidance on you know new initiatives or directions they'd liketo head where they'd, like you know more clarity or more guidance from theregulators? Is it really just a you know it an broke, don't fix it. Youknow to dumb mess with the things are working, there's always new powers andauthorities that they would like it. They would like to serve moreunderserved areas and really help the unbanked. You see a lot of the bigbanks pulling out a different areas. Are you seen reginal banks pulling outand was creating? You know financial services. Deserts is what they'recalling it and we want to serve those areas. The banks. I want to serve it,Cretins do, but then the bank sue us and don't let us do it, and so there'ssome legislation out there to kind of increase our ability to feel to servethose books in the under sort communities is what we do well and fromcradle to gray. We really were started to as an industry to help the workingmen and women of this country, and they want to do more of that, and so that'sa focus, but most of it is just literally leave us alone. They areconcerned about some of the folks that are coming into the CF in the NC andhow far left that pendulum may swing in terms of a regato y environment, butright now they are very pleased. The way things are it's interesting. Youknow one of the things. I've always appreciated about credit unions, and Idon't think you know I came from the technology space and came intofinancial services and knew about banks and credit unions, but but hadn'treally appreciated the difference in, in particular, the difference and focuson consumer banking, consumer lending versus more commercial stuff. In thebanking side and I've always appreciated that as we've gotten the asa consumer lending company, that reunions are really focused on thatconsumer as our core constituency versus more commercial type stuff arethere trends you see, product services, Jagan talked about serving more of theunderstuff communities like. Where do you see that focus on consumers takingcredit unions in the future? And what are you hearing about shifting productmixes or demand for different kinds of things like what's kind of happeningout there on the consumer side, where you've always been granted it?Everybody T, you've heard it before, and everybody that's listening to yourpodcast has heard it before, but the pandemic increased digital andinvestment and digital transformation, but credit uns for the most part, havedone a really good job to already be on that journey and going down that road.But I think what the most important point that the trends that we're seeingis really focusing on the member experience, the member engagement soacross all platforms that it needs to be relatively seamless, relativelyfrictionless, whether you're using your phone, your watch, your laptop or, ifyou go into a branch, it all has to be a similar experience. If you have ahick up, they kneel anywhere along that engagement. That becomes problematicbecause everybody is used to you, know the Amazon going on Aegon andpurchasing in and doing things like that. They need to have that seamless,similar experience and that's where you're seeing a lot of the cos. I talkto focusing on trying to develop...

...relationships with fintech partners toprovide that themes. Approach across multiple platforms is that an area fromyour you talked about kind of an advocacy angle of what you do, whichseems to be a you know: Don't don't break the things that we know how to doand that are working well on the on the vetting of partners. Is this kind ofdigital experience, something that you really focused on and I'm curious howyou think about that? Because there's a lot of different players that approachthat from different angles and how you think about who you're working with orwhat you're hearing from your membership in terms of what they'reinterested in having solutions for outside of just kind of the unifiedconcept? No, absolutely it is a major focus and it's the focus. We have asubsidit called Matthew Services where we have a prefer partner program and webring in partners that have been fully vetted that have been tested, that theycan be that Cretion, that our members can utilize and that's it's betted andit's major focus. That's all nathey services does is looking for productsand services to what help crediting s grow, and- and so that's the focus thatthey do. That's the filter that they use and they're looking for realthought: leadership, they're looking for best practices, they're looking forfolks to be a genuine collaborative partner and it's a DETENTA has becomesuch a commoditized term and in some spaces, even in the credit unindustrial.It has kind of a negative connotation in certain circles and at certain youhave to partner with thin text in order to be successful, because very fewcredit ums have the financial ability to hire a harder technologist ofsoftware developers to go it alone. So you have to have partners of thetrusted partners out there, and so that's the key is the they look andfind. As you know, you said, there's hundreds of not thousands of newupstars coming around to do these kinds of things. They do the betting for thatand it's a trusted source. What do you find to be the hardest part of thatbedding or the hardest kind of Fintech? To do I mean I imagine, as a Fintechpartners with credit unions, we certainly go through the Credit Unionvedding and I think it varies a little bit depending on what they're interned.But you do you find parts of that that are more valuable to your membership interms of helping with their process or the areas of the hardest to get theright answers. Maybe this is a question more for the Fente who want to preparethemselves to go through the process, but where do you see that the hardestpart of that betting process? I think the hardest part is really proof ofconcept in terms of actual experience have have they? Has it been piloted?There's a lot of shiny squirrels out there that we all want to go and chase,but do you has it worked? You have an example. You have a case study that itworked at Xyz Bank or ABC Credit Union that helps real. That helps everybody aprocess and then that's the hardest. Part O there's a lot of really reallyrobust and dynamic companies out there providing really interesting productsand services, but there's no real experience behind it in terms of beingexecuted at a financial institution, and so that experience is really reallyimportant and they look at that kind of stuff and they kick the tires a lot inorder to do the betting. It's good, you got it. There's a lot oftires to be kicked. I think this base all be really interesting for you guys,because I mean I've been a believer for a while that and I'm curious youropinion. A lot of FANTEC seem to be trying to compete with the creditunions of the banks as the kind of primary experience, and then there areothers that are choosing to more of the partner round like I'm. You know we'renot we're not going to try and replace the current financial services industrywe're going to be a partner to it, and many people view that as a new agething but is like, like that's what FIS and I serve and Jack kind, I mean likeyou ha. The idea of technology players at serve. Financial institutions iskind of as old as technology and financial institutions are on somelevel, but I'm curious if you're, seeing a shift and mix from peopleyou're talking to and a shift in perspective from the creditingexecutives and they think about fin tax. As you know, partners versuscompetitors, because there's definitely like a little bit of both right there,those out there buying banks trying to...

...become really the equivalent of whatthe Credit Union does today versus SOS that are out there partner yeah. Thenthat's a really good point. Yoffe. I think the biggest differentiator thatyou'll see here no matter how many full page ads a cool as they put on CNBCthere's, not a tin tech out there. That has the trust the crediting rooms doand then that trust has been done over a hundred years of existence and it'sour business model to we're not for profit. Financial institutions weretruly democratic. Institutions is not right or wrong. The difference betweenthanks and Prettin, it's just different, so the focus is genuinely on the member,so they can play in long term. What's in the best interest of the membershipwas the best interest of that credit in you. Don't have some twenty four yearold, punk kid analyst M Wall Street, beating you up every quarter, so youdon't have that pressure, that some of the other financial institutions doit's just different and so that I think that is a genuine benefit thatcrediting ions hab over over other FIS, and so I think, you're going to seethat play out. I think a lot of these companies and we talked about a littlebit earlier. The burn rake for some of these startups is unmolested, and so sometimes it's easier to go with apartner and then something o beginning to see a lot of thin text going. Youknow what we thought about it going ourselves. We thought about trying toget a bank charter or an Isle C Charter, or whatever it is. You know it may bejust better to partner with banks and Crediting News, as opposed to trying togo and alone, because the bottom line is the regulatory scheme. Attic that wehave to be part of the the fen text will eventually be parted, even thoughthe kind of tenue shopping now finding kind of get around the regulatoryrequirements that are out there they'll be problematic because it willbe some hiccups of some head wins at some of these thin text will experiencein the future, and I want my money with the regulated entity, and I think youalso things shake out. I bet you. Ninety eight percent of those will endend up going away, but the banks and Cretins will still be there. There haveweathered many a storm. Historically speaking, at least is you? is you seethis kind of shift and the Fin Tech Partnerships? Are there product areasor kind of asset classes that you see a focus on improving? I mean one of thethings surprising to me: was the amount of unsecured lending and auto lendingthat credit unions did versus banks. Particularly you know, direct lendingin the auto space, like indirect, is kind of a a won't call it a commodity,but you know there's a there's kind of a well known way to grow. Thatportfolio, but direct lending in the honest space is a little morechallenging and I see banks and credit are ar credit unions have have beenthere much more so than most banks I speak to, but I'm curious if you areseeing any kind of either driven by consumers or by credit unions, thatmost that I talked to were sitting on more deposits and less loan demand thanthey're used to seeing. What are they thinking about as porters of the? How I,from a product point of view, put those assets to work, what my consumers maywant and how that's changing and how that informs their strategy, but whatthey want to put in the market. Yeah T, but that's probably one of the mad.Besides sier security, that's probably one of the things that keep them up atnight is how to deploy that capital that they're sitting on, especiallywith the Federal Reserve. You know shoveling money into the system and youknow that's what's keeping on to night, butthis other side of the ledger is there's just not inventory out there,and so they have a long capacity. The vast majority Um have the technologynecessary to provide the various loans, whether it's consumer loans, Moras evenbusiness lending, but the focus has to be being able to make sure there'sinventory out there I mean there's no homes for sale. There's a shortage ofviews, cars out there there's now a shortage of new cars because of thesupply chain with ships and things on those lines. So that's the problem thatthere's the capacity there are the lending platforms such as yours andothers that that's the thing that's out there. They have the capacity want todo it. The technology makes it smoother and more seamless, but there's noinventory if you only have one button...

...to click, but you don't have anythingto buy the click on there's nothing there. So that's the that's! What'skeeping them up at night is how we do that and so that a that'll shake itselfout, but it's going to take some time so the some of those hick ups in thesupply chain. You know all those baby boomers buying the second and thirdhomes out there that has to kind of shake out a little bit and, of course,the you know, the chips and everything that auto makers have to get situatedand get right and needs to be. You know cleared out too there's a kind of clogin the system at this point, but from a technology standpoint, they're allinvesting heavily and they're planning to do even more across the realm likewhen we talked about a little bit earlier, was they longed? It seem likethey're looking for ways to compete with the rocket mortgages and thingslike that. Are You finding anything? That's been particularly successful inputting those assets to I mean I certainly every conversation I'm in is,like God, I got cash and I got nobody coming in for the for the loans I mean.Have you seen any trends about? What's actually been successful for some ofyour members and in overcoming that? Or is it still? You know they're waking upin the middle of the night trying to find a red button that actually doessomething when they press it there they go waking up in the middle of nightthinking. What kind of red button do I need in order to make this work, andit's yeah, that's still making them pass in turn at the CEOS out there hereshe is tossing and turning how to get some ofthat capital deployed and that's a major concern that they have becausethey run such thin margin, especially in its low interest rate environmentand the non interest. Income is not much there. It's you know credit card,interchange, baby, curtesy pay and some of those other channels that they have.So they need to lend this capital out and it's that's what really keeps themup at night. It's a it's such a someone who comes from the technology space andfrom a start up space, the idea of having too much cash and beinguncomfortable because of it. It's taken me a little while to fully understandand rock as it just in the business doing well, when it's got too much cashand you know most of us, it is, but obviously, when your business is totake deposits and lend them out, you know more cash and less you. Don't youdon't earn enough to pay the bills on that, and so that's been a. It isinteresting to hear that, but it's maybe the most consistent thing I hearfrom any entity. I talk to yeah. I hear I hear every day I was given a speech,as I mentioned out West or earlier this week and every co I spoke to. They havethe means and the necessity and the technology to do it. They just don't,was just up the inventory to push that button to to actually drive the demandso demand demand. Driving is the thing that's in that's in that's in shortsupply right now the WAN as school, more than you've talked a lot about thekind of digitization of the investment in technology. I think it's maybe thetrend that was most accelerated by the realities of Ovid, and I you knowgrandma and GRANDPA, who never did mobile deposit didn't want to go to thebranch, and so they they did a mobile deposit and they're on that trend. Now,so I view that, as having accelerated what I hear from most exacts as yet Ihad a ten year road map and it's now a two year road map to get all myservices digital. I assume that's the same thing, you're hearing what I'mkind of curious about is, do you see the outcome or the priorities in termsof what we digitize when or how? Shifting? Because of this is it? Is itmore just a pure acceleration of the same road map or if we learn thingsabout what consumers need and how we need to digitize or what or how theconsumer experience can change that has shifted because of the recentexperiences of kind of an enforced digitization in a very short timeperiod, yes to all the above Jeff, all the above, it needs to be faster. Itneeds to be better. That needs to be more seamless, more frictionless. Theexperience has has to be smooth and all the above and- and it's reallyinteresting that everybody had plans and it's all changed and accelerated,but yeah. All the above. The digital transformation is happening so rapid,but they really need to focus on what...

...does the member really want and what dothey really need? Don't get distracted and all that noise that's out there andthen that's the thing. They don't chase the shiny squirrel that always shows upvient, specifically what your members need and then that's really importantto have, and that's the reason, it's even more important to have thatpartnership that collaboration with a thin tech that understands your creditin on the N. stands your financial institution but, more importantly,understand your member, your customer and that they have to have thatunderstanding. You know it has to be a granular understanding as well knowwhat motivates them. What is the what's the clog in the what's the stickin the spoke? What's the clog that what problem can you saw? What can you makea smooth transition for them? An a spot, smooth experience in a smoothengagement that that's the focus that they need to have, but is happeningreally quickly, but there's a lot of noise out there there's a lot of newcompany starting there's. A lot of legacy. Companies come up with newstuff, so there's a lot of noise, so the CEOS and the Management Team, thecredit, hums and other FIS need to have a firm understanding of what they'remember and what their customer wants and needs and then find that partner tohelp him you're going to H, they're, getting inundated by vendors andpartners left and right every single day they have to figure out from astrategic standpoint from a strategy. What do you want and then bring in thepartner in the tactics after that yeah? I love the focus on starting with thethe customer. The number and I think the hardest part of the acceleration isprobably the priorities it's like. I know there's fifty things I've got todo, but I can't do fifty today and I got to figure out how I sequence thingsand what's most important and how I kind of prioritize a very long list. Imean technology companies are always in space. I've always got a list of fiftythings. I want to do and time to do five and the question is always whichfive and by the time I I knock those five off. I added ten more to thebottom, so it's a never ending cycle. I that's the thing. I'm really curious,how they're doing well, because it's that prioritization saying okay, I knowI need to get everything better, faster, cheaper, easier, digital mobile butlike. Where do I start? And what do I make my priorities? One, two and three,and then how do I sequence? What comes you know? Next, I think that's the hardpart for this process, because it's you can't do it all, and you certainlycan't do it all at once. So you've got a you've, got a you got a pick andchoose, and that's the I think the challenge, especially if small weresmaller FIS. You have limited resources, and so you really have to be obsessiveabout what your member needs or what your customer needs. And then you knowpunch to that noise and then find that appropriate partner, and that's wherenatty services does so well here at atthew is punching through that noise.You See, they look at a thousand different, you know shiny squirrelsevery year and they only pick one or two to bring into the fold and so thatthat's the kind of betting that you know financial institutions have to have inorder to Penton that noise pick the right partner and really be obsessivewith what your membership needs or your customer base needs and it Foks andthen you'll find those partners and the more importantly got to executeexecutions. Always I think, under appreciated in some of these areas. Youfeel like if you make the right decision it's going to work out and inmy experiences you execution is eighty percent of the problem. You can havethe right answer and if you don't execute it well, it's not going to workfor you almost ever agree. I think execution is king. You can have thebest strategy in the world and the greatest idea and the biggest goal, butif you don't execute it's meaningless hundred percent agree. So I wanted toshift back to advocacy, or at least the regulatory world. A little bit which isyou know. The thing upstart does uniquely in the world is, is really thefocus on the application of ai to credit and lending across the lendinglife cycle. We saw the banking regulators put out a joint statement,we kind of recognizing because it supporting the use of AI andalternative data in the context of lending. I think they're now looking atways to provide more specific guidance...

...to individual financial institutions orhow to think about oversight and governance of those kinds of approaches,particularly in the context of partnership models. I saw you sent aletter recently to the Tua on a similar topic. Do you? Where do you see thelife cycle of adoption of AI within credit unions, and how do you thinkabout the role of Natte or the regulators and kind of facilitating theadoption and deployment of these technologies within the credit?Uninitated yeah? It's interesting, AI and robotics such a key component inorder to get economies of scale or within your institution, and then sothat's our thing, and then I mentioned it earlier Jef that we're trying to getas many tools in the tool box as possible, AI and robotics, and heavenpartners that specialize in that environment is really crucial. So we'reurging our regular or prudential regular an into way to allow that kindof innovation in Extato an execution to occur and don't disrupt it with anyspike and regulation, or anything like that. But just let them operate and youknow examine us which they do that's extremely important for them tocontinue to do the safety and sound as checks that they do. But the focus onAI and robotics is really really key. We push it here at Nasty. We talk aboutit on a regular basis. If you're not looking at it, and if you now have aplan to actually implement it and executed with ye in your institution,you're going to get smoked, you just you cannot number or you can't go italone. You can't do it by yourself. You have to have an organization on boardlike yours or it's just not going to work, and but more importantly, youdon't want interruption or disruption from your prudential regulator,stopping that on to stop the planning or the strategy. You don't want to stopthe execution, because it s a lot of money and resources, that'll be thrownat it and we just don't want anyone to impede it, including our regulator. Arethere things you think the regulators could do or you through the vein ofNappe or nephew services? In terms of the thing I see, I guess the most iskind of. How did the old regulations apply? How does my governance policyapply to a model that doesn't I can't print it in a table and put in a pdfand tell you it stamped like into the kind of clarity and helping understandhow we apply the old rules to a technology that maybe doesn't quitematch? All the definitions is maybe in are here and we're not talking newregulations, we're just talking about like helping it be more clear how theold regulations apply to a new set of technologies. Are there? Is that anarea where you expect, or you think the regulators could be helpful or youcould be helpful to the crit unions and how they think about yeah? We have todo model governance, so we have to do it on a new kind of model and how doesthat apply to machine learning or AI in a way that maybe it didn't to oldpolicies that kind of thing yeah, that's something we discuss internally,if not every day every week is you know best practices? How do we do it? Here'ssome suggestions to the NCAA. We can ever tell them what to do, but we dowrite letters and have conversations with them on a daily basis about whatwould be helpful and to clarify and give us. You know, give us rules of theroad. You give us rules of my my cos. The men and women that run Craigenthey'll do it, then I just tell us what what the rules of the road are and wewill do it. Just don't impede, don't put a road block up on those road,because a in ibots is a major investment and the vast majority thatI've spoken to or headed that direction, if the not already doing it and then-and you just don't get any impediment into that regard, but yeah that'ssomething we talk about on a regular basis here, Jeff, when you see say a Iand robotics we I don't do robotics. I just do a, but I'm curious, we're inthe credit unions. Do you see those things being most immediately deployed?I mean you: Can I can think of almost new nearly infinite list of places. Icould apply those kinds of capabilities. Are there specific focus areas whereyou see the credit unions trying to apply those technologies in the nearterm versus what might happen over the water term? Yeah everything looking foryou know if a credit union has a...

...relationship with a member and theyonly have two products of services being utilized, there's Byby, seven oreight that can be upsold to them. Where a I could be a very powerful tool toget that done. They have so much data and the best majority of emerant surewhat to do with all that data, and so then they meet a partner with a Icapability to do it, but most of it in the application process and theapproval process, and everything else is the AI and finding it the roboticsand the processing of it and to make it quickly instead of having a whole bunchof people. Looking at things, you have a bob looking at it and and trying toexplain and make the process a little bit smoother throughout theorganization. All that is is crucial, and then I think it's they don't ifthey're not doing it, they're going to get smoked because the bank down thestreets doing it the tin tact, that's in the space is down the street, doingit the other crediton that is embrace, it is doing it you're going to be leftbehind and then so it's going to be so important, so folks to focus in on onAI and other platforms in order to be successful. In my opinion, I agree. Itreminds me a lot of you know. I was at Google in the very early days when wefirst coined the phrase cloud computing and I remember, having a conversationwith the CIO show remain nameless. Who said, I think anybody who moves to theclouds going to be fired for gross and competence in the next five years, andI guys anybody C who doesn't move to cloud be fired for gross ing, Copinis,the next five years and well. I was still around to have that conversationin my job five years later and they were not so yeah. I don't know thatit's five years, but I do think ultimately the competitive advantagethat accrues to those who can use these technology as well will make those thatdon't non competitive and you know, be a rural hindrance and there's a lot ofadvantage to being earlier on the bandwagon and later at this is wherethe world's going being there earlier, what should be better at and faster,adapting it, and I think, there's real vantages to that yeah. I think that youhave to have the mindset that you've become a digital first company, andthen I imbared we're a digital first company as a trade association, whichis really really rare, but you have to have that digital first technologyranny saw so who's the president of nate services. We talked about thisliterally on a daily basis and we talked about it. If I was Runnin toCretian I'd, be a I'd call ourselves at least internally a technology companythat provides financial services, and then I would build it out. We justhappened to have a credit union mission. We have to happen to be not for profit,and we do really take really good care of the American consumer, but in ourmindset to create a mindset throughout an a culture throughout theorganization throughout the Credit Union, we would be a technology companydelivering financial services and that's how I would build it upon thathand, that would include a eye that would include momotus. It include a lotof things in order to give you that competitive advantage going into thefuture, and I agree if you're not already working with an organizationlike yourselves. I think you get smoked. I just think that you have to leasthave the process begin the discussion and have a firm understanding what thepower behind a e- and I think, that's overwhelming- to some people, becauseagain, everybody's all. It's all about data. It's about data, this, a ton ofdata, the core processor controls all your data. They got tons and tons ofinformation that you have. What do you do with it? A D An if you could drilldown into your data and in utilize the tools, ai tools, the power there I meanit's, the economy's a scale again: You're operating in a low interest rateenvironment, your margins are miniscule and then, if you can use a tool or anyplatform that helps you get a benefit. Why wouldn't you utilize it? It makesno sense to me and so re urge that from a nephew service is in acu standpointyou got to embrace the ten texts out there that'll help you grow up. Do youhave advice for the Fin Tex? I most of my listeners are not FINTAC.Occasionally, I'm curious for those Fintech that hear the message that thisthe future may be really is a combination of fintech players andfinancial institutions. What's your...

...best advice for the Finte and how howto be the best partner for a financial institution and prepare your prepareyourself for actually playing that role effectively yeah. I would start bytreat him as a partner from the very beginning and realize understand salespressures and sales goals, but tread im as a partner, not just a sales prospectand really develop a relationship and get granular. What is their membershipneed? What is there, what is their member need? What are they trying toaccomplish? How are they trying to better serve their members? Whateconomies a scale are they trying to look for within their institution, sothey can better serve their member and and really become a thought leader inthat space, and so it's a long sales process- and I understand the pipe line-is slow and moving and then and and folks, like yourself like it to bequick- and I do too in fairness, but but you want to be the thought leader.So when the time comes to choose somebody to go, you know what theydidn't come in there and it bring me a bunch of cookies and do this hall hardsales pitch. They were the thought leader at here's, the data, here's whatyou members, what they generally explored, a collaborative relationship.They have a a very strong understanding of my credit union. They have a verystrong understanding of my membership and in my member and then when the timecomes, for them to choose in a I partner or any other vendor, and he hada thin tech. Then we go. You know what that Jeff Cat. You understood whatexactly our problem. He understood our needs and who they're going to call todo business with is going to be Jeff, and I so that matters and you have yousee that old school approach and it just doesn't work anymore. These days,you have to be a genuine partner and be collaborative N. that'd, be mysuggestion. I like, I think, it's the advice. We certainly give our team andwhat's a lot of listening and less talking, is, I think, a good part ofthat. If you're not coming a dialogue, you're not really doing it right yeah,I something matter. Expert you're going to be the subject matter expert, betheir partner, you're, helping you have to member they're doing the best. Theycan a lot of times with. You know very limited resources and that's time andmoney and and personnel, and so if you can be a partner to help them navigatethrough all this, not just a sales pitch and just bombarding him with thesales speak. That's out there that we all we've all heard over and over again,but you provide them with a subject matter: Abe, expertise, you're apartner, and I think, in the long run, that brings a a lot more business tooffend teper or partner that we deal with great answers. Not For all thePENTEC out there be a partner, not not a bad sales guy. No watching Glen GaryGlenross before yourself calls that's the wrong wrong approach. These days,yeah that old school use, car coffee is for closers kind of thing is just itdoesn't work I mean yeah Cretins tend to be a little smaller than most banks,but these are some sophisticated financial institutions. You know andd te they're, getting an inundated and so be a partner. So Dan, is there aquestion that you were hoping or expecting that I would ask that I didnot get to today. Til. I Miss Anything on the list. I think the question I would ask would why credunt of or sotrusted and- and I think I touched on it in the very beginning- and I thinkthat Matthew advocates on the best industry in financial services- we arethe white hats and we didn't get fine, two hundred and fifty billion dollarsfor fraud against consumers. I think that we are the best choice forfinancial services for the American consumer and that trust factor is hugeand we focus on it every day here to try to provide the best partners andbest resources and products and services to help credit unions grow.And that's that's our focus. We're here to help you know Cretins grow period.That's what we're here for us where they pay the dues for us, that's what Iadvocate for, and so we really appreciate the time that you've givenme morning, yeah. Well, it's a great...

...way to book. In the conversation, Ithink we started with grow grow grow. Now we know. What's your focus is foryour members. I do have an. I don't think I put these on the list when Isent them for you, but I have three questions. I ask everybody at the endof the PODCAST, so you'll have to go into these a little bit cold, butthey're, hopefully not too hard for you. One is what's the best piece of careeradvice, you've ever gotten the best piece of career, bio ever gotten wasthe enthusiastic and energetic no matter what task you've been given andwhether you were told to go, make coffee or back in the day, make copies,make the best darn coffee you can make the best clearest copy. You can't justalways go in with you're gonna have to do it anyway, so you might as well haveand do it with a really good attitude, and that reflects positively it. Justthat was the best attitude, because all have had things in our careers that wedidn't want to do, but you still had to do and the people that really rise upof or noticed or the folks that do it no matter. What with a good attitudeand enthusiasm, reminds me those stories of the pikes place fish market,the guys who threw fish ship up in Seattle and with such enthusiasm. Ilike that. So my second question: What's the best piece of advice you'veever gotten about? You know: Consumer Banking, consumer lending, the kind offinancial services industry to be open to new products and services and in newplatforms, and it and really focus on on the member experience and thatthat's a really important from a lending standpoint. The back office,stuff and an AI is extremely important, but also is the experience on the frontend as well and really focus on their experience, and if this hick up, ifit's slow, it's just it's not going to work, because I goin t be others outthere that don't have those pickups, and so I think the front end at thatexperience of the member or the customer is is crucial with any lendingproduct. I lot you get. You remind me of technology companies, TA. True toyour true to your statement. The user comes first, put them at the middle ofall you're thinking and processing and- and you probably will end up in apretty good place. So my last question is always: What do you have a boldprediction for me about the future? Well prediction, I think credit andwill continue to do really. Well, I think they'll do extremely well in thelending space I mentioned earlier. I think a lot of the thin texts that areyou know creeping into the lining. Space won't be here in five years andthen will be the credit uns and the banks that will still be here andthat's the reason that you know partnership so within text a soincredibly important. I bet you. Ninety eight percent of them are gone. Twopercent of them remain, but banks and crediting will always be here. That isa bull prediction. I give you credit for that one Finte a popular spaceright now for equity dollars. I know, but you know the belief that I think wecertainly agree that credit unions and banks are probably not going away andthat the right strategy for most of the technology players it's the partnerwith the the FIS that that will remain and to provide the best consumerexperience that way. Well then, this was a great conversation. I appreciateyour joining me. I had a lot of fun. You did a great job not having beenprepared for the last three questions. So sorry through those Achan yeahthanks again for joining US Jep. Thank you so much for the opportunity I'll doit again soon. Yeah we'll have you back up star partners with thanks and creditunions to help grow their consumer long port, Molios and deliver a modern alldigital lending experience as the average consumer becomes more digitallysavvy. It only makes sense that their bank does to upstarts a eylandtplatform, uses sophisticated machine learning models to more accuratelyidentify risk and approve more applicants than traditional kind ofmodels which brad rates near Sero upstarts. All digital experiencereduces manual processing for banks and offers a simple and convenientexperience for censurers, whether you're looking to grow and enhance yourexisting personal and auto lining programs. Were you just getting startedup star can help e up star offers an...

...into in solution that can help you findmore credit worthy borrowers within your risk profile, with all digitalunderwriting on boarding, long closing and servicing it's all possible, withupstars in your corner, learn more about finding new borrowers. Enhancingyour credit decision, ING process in growing your business by visitingupstart com for dash banks, that's upstart for Dash Banks, use themlistening to leaders and lending from upstars make sure you never miss anepisode subscribe to leaders and lending in your favorite podcast playerusing apple podcast, leave us execrating by tapping the number ofstars. You think the show deserves thanks for listening until next time.

In-Stream Audio Search

NEW

Search across all episodes within this podcast

Episodes (41)