Podcasts

Even before the pandemic, credit unions were the most empathetic collectors around. While credit unions clearly need members to pay their loans and credit cards, they have always approached collections with an eye for helping the member through financial difficulty and educating them about personal finance.

Enter the pandemic and many members were suddenly unemployed. Credit unions were on the financial front lines, working on ways to help, says Jeff Mortenson, VP/client services for the Financial Institution Group at CUES Supplier member SWBC, San Antonio, Texas. SWBC is the sponsor of this show.

“They clearly understood up front that they need to figure out how to help their members,” Mortenson says in the show. But they quickly discovered that calling their members every couple of days wasn’t helping them. “So they took a step backwards … and said, “Wait a minute. What’s best for our memberships and how can we help them?’ …

“They were proactive with it,” he adds. “Being proactive with it has been very successful for them. What they end up doing is creating loyal membership.

“The pandemic is an event none of us has experienced before,” Mortenson says. “Delinquency is something many of the members have never experienced before, either.” As a result, some members might feel embarrassed about getting a collections call. This can make self-service options like text or email great ways to communicate with members during delinquency.

But how can a credit union determine which communication channel a member really prefers? Mortenson says that can happen in one of two ways. The first is during member onboarding if a member specifically notes a preference for texts. The second is by watching member behavior. If a member more often responds to email, that is probably that person’s preferred method.

In the show, Mortenson talks about a new SWBC offering made possible by a partnership with FICO. This system helps track collections communications and, over time, discern members’ preferred channels.

“There’s no crystal ball that will tell us where delinquency is headed in the next few months. CUs need to be prepared at least on a temp basis to handle increased delinquency. They should consider adding multiple comm strategies for collecting delinquent accounts, including IVR, text and email with self-service capability. Omnichannel, along with the traditional collection models, will maximize their results.”

The show also gets into:

• Three things to do to prepare for the future of collections, no matter what the pandemic and the economy bring
• Statistics supporting the value of offering texting as a collections communication channel
• More details about the partnership SWBC has forged with FICO to provide members collections communications using their preferred channels
• Plans for using the FICO platform for early, mid- and late-stage collections
• The value of automation when volume is high

Links for this episode of the CUES Podcast

• CUES Supplier member SWBC, the sponsor of this show
• SWBC outsourced collections
• More CUES content on collections from SWBC
  • Three Ways to Manage Delinquencies with Indirect Borrowers
  • Five Qualities of a Well-Rounded Collection Agent
  • A Guide to Auditing Your In-House Collection

Laurie Maddalena’s vision is to create a place where people love to come to work. Gallup has found in its most recent workforce study, she says, that only about 34% of American employees feel engaged at work.

“Most people don’t enjoy their work and I think a lot of that has to do with leadership, the quality of leadership we have in our organizations,” says Maddalena, CEO of Envision Excellence, a leadership consulting firm that provides leadership development programs for managers and executives, keynote speeches, team building and leadership assessments.

As antidote, Maddalena recommends leaders look to be “modern” leaders, focused on facilitating people doing the work, not fixing problems themselves. Modern leaders get to know their employees and place high value on the people side of the business, she says. 

New leaders sometimes struggle with taking a modern leadership approach because they have been promoted because they are technically adept—not because they have leadership skills. So instead of leading in the modern, they are more likely to lead as they were led, in a more traditional, directive rather than facilitating way.

According to Maddalena, new leaders often struggle with: 

• Getting focused. This could be because they haven’t had the necessary leadership training or aren’t getting enough guidance from their leader.
• Delegation. New leaders might think their technical skills are most important, when in fact their job as leader is to facilitate other people’s work.
• Supporting their staff’s engagement. Engagement comes when leaders step back and facilitate solutions rather than fixing things themselves, she says.

To overcome these challenges, Maddalena recommends that new leaders:

• Ask for training and other help preparing for their new role.
• Look deeply at their leadership style and constantly develop themselves.
• Shift their mentality about leadership. “Leadership is a privilege and it’s a responsibility,” she explains. “It’s not a hat we wear. True leadership is service.”

“I often say, ‘If it weren’t for the people, leadership would be easy,’” Maddalena adds. “Preparing yourself to be of service to people” is a key part of the job. 

In the show, Maddalena says it’s hard for people to lead in a modern way. Leadership training is important both for new and experienced leaders to continue to evolve.

“We need active leadership” more than ever during the pandemic, she says, “meaning reaching out and checking in. People are really stressed. It’s going to take more energy and effort” than ever.

“Our job as leaders is to focus on the people and facilitate the people side of the business,” she underscores. “The technical side will get done. But the people are who put the effort in to get the results, so we need to make sure that’s a big focus.”

The show also gets into:

• How Laurie Maddalena fell in love with credit unions
• Laurie’s favorite quote from Zig Ziglar and how that applies to leadership
• Perspective on how leadership is the same or different during a crisis like the pandemic
• Maddalena’s assessment of leadership readiness at credit unions during the pandemic and beyond
• The value of modeling leadership
• The CUES Emerge program and how Laurie Maddalena and her consultancy supported it

In the Tampa Bay, Florida, region, migration from Spanish-speaking countries has increased more than 200% in the last two decades and that number continues to rise, creating social and economic change in the area, according to Lindsey Walker, executive assistant with $259 million/32,000-member Tampa Bay Federal Credit Union, Tampa Bay, Florida, and the 2020 CUES Emerging Leader, the first-ever winner.

That growth was driven by part by Tampa being a top destination for people from Puerto Rico escaping Hurricanes Irma and Maria. Other Spanish speakers have come to the Tampa area from Columbia, Venezuela, Cuba and Nicaragua.

According to Walker, a national survey found these individuals prefer having documents available in their native language. “There’s always room for misinterpretation when you speak dual languages,” Walker explains in the show. “This is especially true for older Spanish speakers. They often bring a grandchild or friend with strong English skills to help them.” If they don’t, they sometimes sign without fully understanding the terms, which can become a real problem.

In the Tampa Bay region 24.3% of the unbanked and underbanked population rely on payday lenders, Walker points out in the show. These organizations prey heavily on minorities who lack access to mainstream financial products, she says.

Getting their business at the credit union instead can be as simple as letting a consumer “know they can become a member of a credit union or that we will accept their identification. They actually can get access to products.

“Since 2015, Tampa Bay Federal Credit Union has begun changing the narrative in our community and helping get the word out that we are there and we can support” Spanish speakers, she explains. “We make it known that we accept alternative types of identification for membership and loans. We have staffed our front line with over 74% being bilingual. Our branches are strategically built in Hispanic communities. We facilitate financial literacy classes in Spanish. We have bilingual branch leaders who have undergone” … financial literacy education courses.

In all, “with completion of the Spanish outreach program … we’ve been able to provide materials to our Spanish speaking community such as member applications, loan documents, website, marketing materials,” she adds. “It’s a huge leap for the credit union. The feedback that we have received as each segment of the program has gone live” has been very positive. “They’ve been so grateful that we are listening to their needs and responding.”

The credit union invested $56,000 and now anticipates 1% growth annually. With 8,200 Spanish-speaking members now, that’s 1,900 new members in the next five years “that we’ll be able to help,” Walker says. “We also anticipate an on-balance loan sheet increase of $128 million. Of that, we anticipate $6.4 million being deployed to our Hispanic communities. I think it’s a huge win-win.”

The show also gets into:

• Walker’s professional mantra, “Seize every opportunity available,” and her favorite quote
• Tips for credit unions that want to do this in their own shops
• Grant writing and the National Credit Union Administration’s community development financial institution program
• The CUES Emerge program

In this show, Patrick Donohue tells the story about going to Home Depot to buy a power drill. He emphasizes that he didn’t really want a power drill. But rather he wanted to make a hole in his wall. And actually, his purpose wasn’t truly the hole. Instead it was to install his family’s new Ring doorbell. At bottom, it wasn’t that Donohue wanted to buy a power drill. It was his wife who wanted a better system for making sure delivered groceries got brought inside in a timely manner.

Product manager, Data Solutions Group for CUES Supplier member FIS, headquartered in Jacksonville, Florida, and the sponsor of this show, Donohue tells this story to underscore the idea that behind every data point is an intention, an intrinsic desire of an individual member.

 “The more we can use data to understand our customers’ stories—what’s going on in their life and what’s likely to happen next for them—the greater the chance we have to delight them and retain our members,” he explains.

During the show, Donohue also talks about key trends impacting credit unions’ use of data today, including fintechs—both startups and big tech companies—and the uncertainty associated with the coronavirus pandemic and what that means for members’ transaction patterns. 

Next, Donohue provides specific tips on how to better use data that’s currently “left behind” and not leveraged to credit unions’ advantages. He suggests looking to the transaction ledger for the rich information contained there about members. 

He describes an example transaction that credit unions could mine. 

“We can spot that a user has made a purchase—let’s say at a golf shop,” he says. “The merchant name is a little bit cryptic. We think it’s a golf shop but we can use a merchant name database and know that it’s Golf Mart. Then we can look at the whole landscape. Is this a one-time purchase? Is it a present for his cousin Larry? No, this is someone that also has a subscription to a green fee app. We can also see that their college tuition expenses are increasing. We might be seeing some signals in the data that his life is changing a bit. He wants to keep his golf going but he also has some additional expenses he has to pay.

“You begin to layer on data to better understand that unique customer’s story,” he adds. “It allows everyone in the value chain for that member to customize that experience from the personal banker who’s standing in front of John inside the branch to the digital experience that’s serving up insights in mobile banking … all the way to the customer service rep who’s talking to them via phone. We know more about John and what’s important to him.”

The show also gets into:

• The backstory behind Donohue’s professional mantra: “Move the authority to where the information is”
• What is meant by “single-threaded” apps created by fintechs, and how credit unions’ more holistic strategy can be a competitive advantage
• The top tough questions that credit unions should be asking themselves when it comes to making the most of their data to serve members on a personal level
• How FIS helps its clients with their data efforts

Links for this episode of the CUES Podcast

• CUES Supplier member FIS
• FIS’ new sponsored article, “Data is the New Oil”
• CUES Supplier membership

For this milestone episode, CUES Podcast listeners submitted their questions for experts to answer. So instead of featuring one or two experts, this show features seven! Instead of being centered on just one idea, this show covers three areas of major interest to credit unions and their leaders: reopening physical branches in light of the pandemic, reaching and engaging young members, and the future of credit unions 25 years out.

Our first question about when credit unions might reopen fully comes at the 5:12 mark from CUES member Ron Kraus, chair of the board of $2 billion Together Credit Union in the St. Louis area. Kraus’s question is first answered by Mike Carter, EVP of CUESolutions Bronze provider Strategic Resources Management, Memphis, Tennessee. A second response is given by Steve Reider, president of CUES Supplier member Bancography, Birmingham, Alabama. Neither expert expects 100% reopening across the country by Thanksgiving and each has ideas about the larger implications of the pandemic on the financial services.

The show’s second question is from CUES member Karen Bruce, associate board member at $1.7 billion America’s First Credit Union, Birmingham, Alabama. It's about how credit unions can best reach and engage young members and comes at 12:04.

Bruce’s question is answered by three experts: Ben Stangland, president/COO of CUES Supplier member Strum, Seattle; Keith Brannan, chief marketing officer for Kasasa, Austin, Texas; and Jeff Fromm, author of four books and the president of Futurecast, a subsidiary of Barkley, New York. The three say young members are a great opportunity for credit unions and offer ideas for connecting with them.

The third and final question in the show comes from CUES member Mary Gray, director of member engagement and programs at $1.8 billion A+ Federal Credit Union, Austin, Texas. It's about what credit unions will look like in 25 years and comes in at 25:06. 

Two experts with vision provide answers to Gray’s forward-thinking question: Steve Williams, principal with CUES Supplier member and strategic provider for technology and planning services, Cornerstone Advisors, Scottsdale, Arizona, and Chris Skinner, an independent technology commentator at The Finaser blog, the author of several books and chair of the Financial Services Club.

Williams says in 25 years there is great opportunity for both large banks and grassroots financial services. He notes four words that come to mind about qualities that credit unions that can stay the course will have—purpose, talent, technology and scale—then elaborates on each. Skinner suggests not trying to compete with big banks but rather standing for something other than shareholders and profit. He believes credit unions have a great opportunity to deliver on this idea.

The show also gets into:

• What listeners whose questions are featured in the show have appreciated about the CUES Podcast 
• A favorite memory of CUES Podcast founder and host James Lenz from the first 100 episodes
• How to submit your question for possible use on a future show
• The great story about how Jeff Fromm ended up studying young consumers