Innovation | 07.21.21
Credit Unions Embrace New Technologies With a Helping (Robotic) Hand
Collectively, America's 5,000+ credit unions are on a mission.
Simply put, they help people. As far as the daunting task of trying to wrestle with rapidly-changing technology in a world gone digital, credit unions could use some help. And they are getting some.
Credit Union Service Organizations (CUSO) have always functioned as a back-stop of pooled resources for operational support and revenue enhancement. CU NextGen is a Wilmington, Del.-based CUSO that is focused on providing technology to improve the bottom line.
That can come through reduced expenses, increased efficiencies, or enhanced revenue-generating services. Top priority these days: guiding the complicated, cumbersome task of rebooting for the 21st century.
Improving a "tech stack" can require fintech partners and vendors that perhaps generally focus on financial services. Solutions are outsourced and providers are often acquired by a new owner not exactly keen to work with smaller, community-based institutions.
Owning their own intellectual property, CU NextGen is operated by credit unions, for credit unions.
"We work with clients to determine what their strategic initiatives are," said Andrea Brown, CU NextGen's head of client engagement. "Our goal is to give credit unions control over their employee experiences and member experiences. Once we know what areas they want to control, then we build solutions to make that possible."
Focus: Experiential Enhancements
The core offering right now is CU NextGen’s Member Relationship Management (MRM) platform. About 40 credit unions from Phoenix to Atlanta are in various stages of overhauling technology with an eye toward experiential enhancements. Brown describes it as a suite of modules that puts credit unions – task forces of technology leaders and business development chiefs, usually working by committee – in control of upgrade missions. There’s a combination of tools, including robotic process automation (RPA), no-code app development, and artificial intelligence (AI).
Examples include conversational AI, voice assistants and a robust video banking platform. Improvements to credit union employees' daily work life can translate into a better customer experience.
More and more, tedious tasks are out (e.g., entering the details of a new account beneficiary into a computer manually) and replaced with automated, self-service processes (allowing customers do it themselves). In one fell swoop, customers gain a sense of control, and employees save time.
"Credit unions are all about helping people," said Kent Zimmer, CU NextGen's President and CEO. "And as they move to deliver a more modern, seamless experience to their members, it's a challenge. We want credit unions to know that we have their back, and that they remain in control."
"Most of our work is done on top of legacy systems that are known for creating silos and making integration difficult," Brown explained.
Using all the tools in the stack – APIs, databases, RPA, AI – CU NextGen can bridge the gaps that are left by so many of these disparate systems, she said.
Differentiators include: enterprise software licenses that renew on an annual basis; technical resources that can be contracted monthly for any skill from RPA to Java to system administration, and access to a well-versed client experience team.
CU NextGen prides itself on providing a consistent, measurable ROI to its clients. Their ideation and innovation portal, CU InkPad, enables both CU NextGen and the client to have full transparency into their opportunities.
Perhaps most importantly, a sense of community runs deep among CU NextGen and its clients. This is fostered through a variety of channels, such as quarterly roundtables where credit unions compare notes on everything from call center headaches to data validation.
Empowerment Through Ownership
CU NextGen was founded in early 2020, right before the start of the pandemic. It was an outgrowth of a successful project run by Members Development Company, a research and development CUSO and something of a heavy-lifting hub created by some 70 large credit unions, which, without banding together, would not be nearly as well-positioned to keep up with technology on limited budgets.
A technology-based firm, ClaySys Technologies, is also a co-owner. Based in India, ClaySys provides the technical resources that support CU NextGen.
Recently, CU NextGen expanded its ownership tent, raising $9.25 million of capital from ten credit unions which now hold a 20% stake.
Those ten credit unions have $41.2 billion in combined assets and 2.5 million members.
"The capital raise was extremely important to us," Brown said. "We want our credit union investors to know that we are not going to be bought out."
Zimmer shared, "The message we want to send to the credit unions is that by working with us they are always in control of their future."