Podcasts

 

124 Steve Hewins Disruption CU Members Mortgage

December 2021

By Steve Hewisn

Lisa Hochgraf  00:04

You're listening to the CUES Podcast, episode 124. 

 

00:08

Thank you, CUES podcast listeners, for tuning in to the CUES Podcast. As I record today, we've already seen some light snow here in upstate New York where I work, and CUES' Madison headquarters has actually had some snow stick. Whether you're getting ready for winter or enjoying warm sunshine today, we're glad you're listening. 

 

00:27

As you know, on the CUES Podcast, you can hear from a wide range of cross-industry experts discussing trends and topics relevant to you. My name is Lisa Hochgraf, and I'm a senior editor for CUES and it's CU Management magazine. I will be your host today. 

 

00:43

Before we welcome our guest and jump into today's topic. Let's take a pause for a brief commercial. 

 

00:51

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01:40

Today we'll be talking about disruption and looking at what disruption means exactly, as well as how it compares to innovation. With clear definitions in hand, we'll take a deep dive into what's going on in the mortgage lending arena and what small trends credit unions may want to be tracking now, since these small trends may develop later into more significant market disruptions. 

 

02:05

Our guest, Steve Hewins, is senior vice president of CU Members Mortgage, a CUESolutions Bronze provider based in Texas, one of those places that is still enjoying warm sunshine. Since getting his degree in marketing from the University of North Carolina at Wilmington, Steve has worked in mortgage lending for a wide variety of organizations, including Wachovia Bank, Capital One and Trellex before coming to CU Members Mortgage. In all he brings many years of experience to the perspectives he shares during the show about the disruption opportunities in mortgage lending. 

 

02:41

My conversation with Steve really expanded my thinking about the mortgage lending space. And I hope you find it does the same for you. So let's get started. 

 

02:54

Welcome to the show Steve.

 

Steve Hewins  02:57

Well, thank you. I'm very excited to be here today. You know, it's always a pleasure to be here. And to do this with you. You know, CU Members and CUES have had a very long history of working together, probably about 20 years now, which is a great relationship. And we've always found the connections that we have built to be wonderful. And we certainly enjoying partnering with our credit union professionals and the board members to help them either through our own mortgage services or, like today, just sharing relevant information.

 

Lisa Hochgraf  03:25

CU Members Mortgage is a CUESolutions Bronze provider and a valued CUES partner. I’ve posted a lot of great content on CUmanagement DOT com from you, Steve, and from your colleagues. Thank you so much.

 

03:32

So on the show, lots of times we start by helping our listeners get to know our guests a little bit. We invite the guest to share a professional quote or a mantra that they live by. Would you have such a quote or a mantra to share?

 

Steve Hewins  03:46

I do actually and I use it on a daily basis. Keep it simple. And that's it. Just keep it simple, either in learning or in managing process creation or marketing or communications, I really just try to keep it simple. 

 

04:01

I used to say simplify, simplify, simplify, but that was redundant and didn't make sense so keep it simple as much better. And even a complex problem can be solved by really kind of breaking it down, getting to the root of it. Solve that problem, and then you can add back the complexity in a methodical way and still get to the right answer. So everything I do, I just try to keep it simple. Our conversation today, we're gonna keep it simple.

 

Lisa Hochgraf  04:24

I love it. That's a great mantra. I think I will think about simplicity for the rest of my day. 

 

04:30

So we're going to talk about disruption today and the opportunities that it might provide. Let's clarify what we mean by disruption. We often hear the term used to talk about changes in the market. But let's explore the deeper meaning of that. Is there a difference between disruption and innovation? They seem to be applied in discussions interchangeably these days.

 

Steve Hewins  04:51

You're absolutely right I ... on a couple of things. No. 1, disruption is used way too often and probably incorrectly in my opinion and it also is a lot of times mixed or confused with innovation. There are plenty of articles that talk about a new app or a new technology being disruptive or being a disruptor in the marketplace, and there's really when you look at the term disruption, it really is talking about a new entrant coming into the market and they're bringing a non-conventional business model, okay. And in a true disruption, those unconventional products normally take root kind of at the bottom or the fringes of the market. And they're addressed probably in underserved segments, the people that aren't getting the attention or getting the fulfillment that they need out of a service. And then over time, normally, you know, those factors could be because of low cost or really quick adoption, they start to grow and start to influence the rest of the marketplace. And typically, because it's a disruption, it's not the fact that it is changing the market, it's pushing something out of the market or changing the status quo. So a disruptor eliminates something that's in the market today. And it normally comes in a phase. You know, typically, it'll start off with initial disruption. And then you'll have very quickly some rapid or sequential evolution of that. And then there'll be, you know, everything kind of starts coming together, because people recognize it, they try to copy it, the the status quo tries to adapt. And then basically, the status quo typically doesn't adapt and then gets replaced with the "new normal" as we would call it. 

 

06:29

And so disruption is does have innovation in it. But it's more about the market dynamics of how it impacts the rest of the market and what they do and what or what they don't do. And so, again, the folks, the entrants that come into the new market, fringe support, and not necessarily initially coming in with a great reputation, because it's a low-cost provider, it's serving a subsection of the market, it's not widely accepted. But over time, it becomes accepted and becomes the predominant area and changes the status quo. 

 

07:02

And that's why it's different than innovation because we have innovation all the time. You know, one of the ones that probably comes to mind in the mortgage space is Quicken, right? Quicken in 2016 came in and they had their Superbowl commercial and it was mortgage with a button, right? And everyone's like, "Oh, they're a disruptor. They're a disrupter." But they really weren't. They were really an innovator. And it was a sequential evolution of where we were. We had online apps. We had online sourcing of information. They just really packaged it really well. They pieced it together. And it was the next iteration of a point of sale. 

 

07:38

That's the difference between innovation and disruption. Disruption, you're going to have a loss of the status quo. Uber, right. Uber started in the Bay area as an app for car services. And, you know, the taxi cabs didn't have them on their mind. They, you know, they were dealing with limousines and towncars and that type of thing. But early adopter adopted, then they all of a sudden they had linear evolution. They said, "Gosh, we're doing this for cars. We could do this for anyone that needs a car." And then now they are going to use a different workforce. They don't have hardware that they need to purchase. They don't need to buy cars, they're using the people's cars. And there was quick adoption. And then once that started to catch on and start spreading, right, Lyft and others came in very, very quickly. And then the taxi cabs, even they even they tried to adapt, but you know, really weren't successful in adapting. I mean, cabs are struggling all across the country because of Uber.

 

Lisa Hochgraf  08:32

I was just thinking today about how I learned about weak signals in the market years ago from Kathy Pearson at a CUES event about emerging technology. And I loved that idea that we need to be listening for those little bits, right, those shifts that are happening, that are eventually going to grow like you've been describing into something that disrupts what we do. 

 

Steve Hewins  08:52

Absolutely. 

 

Lisa Hochgraf  08:54

So, I know that as an executive who specializes in credit union lending, you have probably thought about disruption that's specific to the lending space. What disruption opportunities would you say are available in the origination of a loan?

 

Steve Hewins  09:07

So right now, I think we are in the phase of early disruption in the mortgage space, and in origination. And I'm not talking about the fintechs that are coming in and creating point of sales. They're going to continue to evolve the point of sale. They're going to continue to evolve on and what Rocket did as far as you know, figure out a way to calculate income faster, get asset information that are, you know, get better property data and create all of this so they get a faster decision. And that, again, is evolution. That's not disruption. 

 

09:39

The real disruption that I think is occurring right now is starting to be the merge of finance and real estate. And so you start to have these disruptors coming in like Open Door, Zillow. You're starting to already see online real estate brokerages that are taking the realtor out of the process, right because it's cheap. You can list your house online. They, you know, put codes on the door. You don't have to have someone showing it. You know, there's all these things that they're starting to do. And then we have ibuyer, you know, ibuyer being where someone comes in and uses technology, based on the technology makes you an offer on your house. You sell without even listing it, and then they turn around and sell it again. And so all of these things are little bits and components of the merging of finance and real estate. 

 

10:27

We're starting to see, you know, it's going to be an end-to-end process a lot of it online. Because right now, in today's world, the realtor controls the purchase transaction. People don't talk about that a lot. But if you're going to do purchase transactions, you have to have a really strong relationship with a realtor or a builder, because they have the ability to steer their member to their lender. And you know, a lot of your credit unions here, you know, I'm guarantee they've experienced it. They're in the middle of talking to someone and they're like, "Oh, my realtor told me to go with so and so because they can close it faster." "Oh, they do mortgages all the time." It's like we're a credit union; we do mortgages, too. You know, they really control that piece. And you have to really build those relationships. 

 

11:07

But what I see is coming is this technology use and the blending of the online real estate broker with lending and Zillow for shopping and searching. And then you start marrying in all these services where, you know, you can get your appraisal through here. You can get your title through here. It becomes a one-stop shop. It's an omnipresent experience for someone. And that's really the disruption that's starting to happen. 

 

11:32

And we're in the very early stages, and a lot of people have tried to figure it out. And they, and there's different people who have different pieces of it, but no one's really got the holy grail yet. I mean, you're gonna start to see insurance, you know, homeowners insurance, being part of that process, or, "Oh, you need a cleaning service," or whatever those things are, you're gonna start to see this omni experience. And it's really the blending of finance and real estate. That's the big disruption. 

 

11:55

I think the other one that I would love to see is I think what is ripe for disruption is also affordable housing. And, right now affordable housing and affordable lending, some of those folks are being left behind, because they may not have the means for online experience. And they we need to figure out how to reach those people and not be impacted as technology leaves them behind. So I think there's some really good opportunity there. And then I think you'll start to see things that will, you know, like terms of the loan may be different timeframes, payment schedules, those type of things. But you've got to simplify the online processing experience that they may not necessarily have access to, because they may not have internet. They may not have, you know, pervasive wifi, you know, in certain areas, but can you do it on your phone? And then how do you translate that and how do you translate income in those other pieces? So I think that's the other piece that's ripe for disruption, I just don't know that anyone's in a position to do it yet.

 

Lisa Hochgraf  12:54

It seems to me like credit unions are always working to have good relationships with the realtors in their area. And similarly, I know of credit unions that own an insurance agency, for example. So those credit unions are kind of starting to follow this disruption that you've described of  financial services and real estate merging. What else can credit unions do? Or are they kind of at the mercy of the disruptors at this moment?

 

Steve Hewins  13:19

Well, I think the relationship in the role of the realtor is going to look a lot different in the future. I think you're going to have these online providers that are going to push them out a little bit. And people will say, "Oh, people always want a person." But with the adoption of Zoom, you know, virtual exchanges and those experiences, I think that's a group that's going to feel the pinch, and they're going to have to adapt. And it may be that they're functioning as a different way as a realtor. And they're not going to be earning, you know, 6, 7%, or, you know, whatever their percentages, you know, these online brokerages are doing it for a half or a 1%. And so that's, you know, when you start talking large homes $400,000, $600,000. That's starting to talk real money for people, and even $100,000 house, everyone wants to save a percent. And so I think the role, the relationships they have today may not be as important in the new status quo. But that doesn't mean you can lose them because you need to get to the new status quo. And I say this every time I people ask me about surviving in a purchase market: You have to build those relationships in selling mortgages 365 days a year. You can't just put it in your newsletter in June and think you're gonna attract people. You have to show those realtors that you're in the game and you're in the game every day. And so you've got to continue to build those relationships. You have to train your frontline staff to understand that you do mortgages, and when they start hearing people talk about renting or transition or things that would cause people to purchase a home or refinance a home for cash, you need to be on top of that and your frontline staff has to have the confidence to be able to push the staff to the appropriate person. They don't have to be a mortgage expert, but they have to know the key words and have the ability with confidence to send them to the right person in the branch or within the credit union that can support them from a mortgage perspective.

 

Lisa Hochgraf  15:00

So my sort of synthesis of what you were saying about the relationship that credit unions now have with the real estate agent, might be that they need to continue to nurture what they have, while at the same time listening for weak signals of other partnerships that they might want to make with, like you were saying, an online brokerage or ...

 

Steve Hewins  15:18

You're completely expanding my thinking about mortgage lending. Thank you, Steve, for that.

 

15:18

Yeah, or bringing their realtor partner along with them. What strengthens the relationship even better than to be a voice of knowledge and expertise for your partners? How much loyalty do you create with a realtor when you talk about these changes that are coming in the industry? And how do you two partner together to ride those out? Let's be real. Insurance companies and credit unions, as depository institutions, are not positioned to be disruptors. They really aren't because of the regulation around them, you know, the oversight and all of those things. And we're not hiring staff in our credit unions who are those kind of thought leaders, and we need to start doing that. So it's difficult for them to break the status quo when you have to operate within the regulatory confinements. And so part of, you know, we'll talk about a little bit later, I think about, you know, what can a credit union do? That's gonna be one of the things that we're going to talk about is, they have to be an advocate. They have to participate and hire people, make sure those people know what they're talking about, you know, and are ready for change, and then listening for change, and then making sure that they can work with the regulator to address the gaps in the market that they want to disrupt.

 

16:31

That's exactly why we're here to to expand the conversation and have people start thinking. We're not going to solve it today. And I don't have answers for everything. But definitely, these are things that I'm seeing and noticing, and we have to start thinking about them. And we can't we can't react, you know, when we're not in a garage with like two other people. We can turn on a dime, you know. We have, you know, board members and members and all sorts of things that a credit union needs to work with within their sphere of influence.

 

Lisa Hochgraf  16:56

So in keeping with what you're saying about the origination disruption, are there more disruption opportunities in the operational process?

 

Steve Hewins  17:05

Yeah, I definitely. I think the most pain point that everyone has experienced right now is collateral valuation appraisals, right. You know, right now, we have a shortage, we feel like we have a shortage of appraisals. Appraisers take a long time to pick up orders. They take a long time to deliver the appraisal, to make corrections. The fees are continuing to increase. And so, collateral valuation is definitely ripe for disruption. You know, and it's going to be very different and like things that you could kind of think about would be, you know, we've already started moving from, you know, a full appraisal to desk reviews or drive-bys or, you know, or AVMs, automated valuation models that we use. Those are still very limited. 

 

17:48

But think about what that next iteration of an automated or technology version of an appraisal is. Do you have connections with city governments around permits? "Oh, you got a new roof, we'll add that to value." "Oh, you have a new hot water heater." You know, certain areas and different municipalities have different rules around permits. Maybe you're connecting to mechanics or construction companies or builders or folks that have supply companies that you know, do tile. "Oh, I know that you purchase X amount of tile" or "You have you put in a new driveway. Oh, you put in a new septic system" or ... You know, you start being able to pull these points in, you would have a good understanding of the situation of the house, the condition that it's in. You start doing doing drone reviews. You know, drones fly over and look at the house and "Oh, the yard looks good" or whatever those things are, there's going to be new data points that we'll have access to, to come in, and there'll be able to leverage those to come up with a risk appropriate value for that property. 

 

18:46

And you know, then if you want to appeal it, then maybe you then you go to a full appraisal or some version of an appraisal, but you start using these valuation tools on 80% of the business. That's a that's a new opportunity. So I think people who figure out how to deliver a valuation quickly, I think the ABMs is the beginning of it, but I think there's a whole iteration, you know, what are the electric bills? What are your water bills? What are these things? You know, did you buy new bushes and how do you represent that? Those kinds of things will be very interesting. As far as home inspections as well, they'll look a lot different as well based on that information. 

 

19:22

So I think valuation is one. I think the other thing that is, you know, a challenge till today is even though we you know, we did TRID moons ago, we're still working through TRID and that whole relationship with the whether you're in an attorney state, closing agent, escrow company, title company. Whoever's closing your loans with the lender, that interaction is going to be continues to be a challenge and you want to make sure you have the right fees and do you start pulling in fee services and getting fees pulled in for that you both use? Is there a centralized fee database that we use or are you pulling it directly from the county recorders office to know what they're charging per page. Those type of things will be very interesting. And then the other piece is you want to secure that connection between you and the title company because we're hearing all sorts of fraud ah where people are doing phishing scams or other email scams around, oh, change the routing number, here's the new routing number, we've updated our routing number in our account number, people are wiring money to the wrong place, and, you know, don't even know it. And that's that's a reoccurring issue. So I definitely think that closing agent collaboration has a lot of room for disruption and improvement, not just from efficiency, but from a quality standpoint, but also privacy and security, making sure that we're protecting ourselves from fraud.

 

Lisa Hochgraf  20:44

This is all very interesting. Steve. Let's let's continue with the mortgage process. It seems like most lenders don't really focus on the activities occurring after the loan closes. Are there also meaningful disruption opportunities in the post-close function?

 

Steve Hewins  21:00

I agree, I think a lot of lenders and credit unions, when they when they finally get to closing, it's just like, "Thank goodness, let's just move on to the next one." But there's a lot of activities that happen after closing, you know, depending on the size of a credit union, what they're doing. Some are shipping and some selling those loans, some growing the portfolio. They're going to service these loans or be a part of that process. And there are opportunities in the post-close world. 

 

21:23

One of them I think, is really about payments. Today, everyone, you know, there's people send ACH, or they draft or they do online banking, that type of thing. But are millennials and Gen Zers really aren't into that type of payments, you know, they use other things, they use Venmo, Zelle. And then also, we've got Bitcoin and cyber currency. And so we'll have to see what that looks like as well. So I think that's a disruption opportunity in the servicing world is for people to really think about payments and how they use payments. And they process that. 

 

21:55

And I think the other piece that is it will be very, very interesting ... right now the most of the securitizations that we do are through governmen-sponsored entities through the GSEs, Fannie, Freddie, Ginnie and that type thing. And I think it's less than 4 or 5% is private securitizations. Back in the heyday, before the credit crunch, we probably maxed out about 20% of all mortgage-backed securities done were private label, probably never over 20%, certainly never over 25%. That's the bulk of the securitization. But now, when we start talking about things like crowdfunding, Kickstarter, and these other funding sources, what does that mean, for the, for those groups to kind of fund other investors? You know, you do still have some real estate, some REITs, you've got some insurance companies that will buy and do securitizations. But if you have this other alternative of these crowdfunding Kickstarter, or something like that, what does that do for them as the investor, what their requirements are? Does that mean we'll have more flexibility in guidelines or what they would accept as documentation? You know, so it opens up a world of possibilities of what could happen in the mortgage space, because you're no longer tied to what Fannie and Freddie say, right? Fannie, Freddie or Ginnie, these are the rules, and everyone kind of follows those rules. And because private securitizations haven't really kicked off and gotten to a huge point, that's when that's a disruptor waiting to happen. Having these other funding sources, these crowdfunding opportunities, and what that does if you have different investors or money backing you what you're able to do from a securitization, what you're willing to buy, what you're willing to net as a yield. And so what does that do to the price? And so all of those things could really have a fundamental shift of securitizations of mortgages.

 

Lisa Hochgraf  23:46

Yeah, you continue to expand my thinking. So Steve, why have we not seen these opportunities tackled yet? 

 

Steve Hewins  23:54

Well, I think there's a couple reasons for it. First, is, you know, credit unions really aren't built to be disruptors. You know, they they're operate in a very regimented, regulated market. And like I said before, a disruptor has to change the status quo. But for credit unions, a lot of their status quo is dictated by government oversight and regulation. And so they're going to have to, I think that slows down the amount of innovation or disruption that can occur. Because you still, regardless of what you do, you still have to operate within the guidelines of the rules and the regs if they're managed to today. And so they may want to take all these exciting things about, "Oh, we're going to do these new valuation models," but they may not have the ability to because it doesn't align with current regulation. And also credit unions really aren't built or aren't hiring for that. They're not we don't have credit unions are out hiring disruptors, they don't have an environment or a culture of "let's turn things upside down." And I think that's why and then even if you start hiring those people, you have to have a culture inside the organization to retain them for those people to execute on that. And so you really have to have an opportunity or intention to do that. You know, and the other thing that we talked about briefly was, you know, there are a lot of stakeholders and partners in the mortgage process. You've got the GSEs, the government entities. You've got the private markets. You've got real estate agents. You have fintechs, lawyers, closing agents, county recorders office, municipalities. All of these things and all of these stakeholders are kind of woven in there, and it becomes very difficult to peel them off one by one. And so that's another reason is just the complexity of it, the regulation, and then the fact that, you know, we're just not at that point as institutions to be ready for.

 

Lisa Hochgraf  25:41

Lots of talent opportunities there. As a talent development organization, I'm very interested in that.

 

Steve Hewins  25:46

Yeah. You've got to create an environment. You can hire them all day long but if you don't give them that environment for them to be themselves and to expand that thinking and to look at things differently, it's gonna be a rough road to be a disruptor. I mean, you see it already. I mean, just think about the things that credit unions face with even even marketing to millennials and to Gen Z and to those, how difficult that is, for some credit use just to wrap their head around because it needs to be done in an entirely different way than a traditional marketing plan would have been done 15-10 years ago.

 

26:20

Thank you so much for all of this insight, Steve. Before we go, I'd like to ask you if there's anything we didn't talk about today that you think would help our listeners with opportunities for disruption in their lending? 

 

26:31

Well, again, I think what we didn't talk about is, well, what should a credit union do? Right? We didn't talk about what can a credit union do to be successful even because now I've labeled them as a non-disrupter. And I'm more than happy for credit union to prove me wrong and be a disruptor. I'm supportive all the way. But if they're not a disruptor, what can they do? And probably the most important thing is start hiring staff that has that type of mentality. You have to make sure your staff is prepared to do change management and be ready for the changes that will be coming. And you have to be able to react to and start listening to, as you said, the small signals, the quiet signals, and piecing them together. Start drawing the lines between them and connecting the dots. And even though you may not be a disruptor, you certainly can be aware of what's coming, and maybe be a fast-follower instead of an initial participant. 

 

27:22

And so I think when you start looking at that, and even if you can't do it because the cost is too much or the culture is not right, maybe you start looking for partners who can do it for you, and start thinking about that, and asking those questions of your partners, when you start building vendor relationships, and making sure that they're understanding the signs of disruption that are coming, how are they preparing as a vendor or as a partner for you, so they're ready and not displaced? And I think those are really important things: training staff, keeping an eye on what's on the horizon, and three, questioning your partners to make sure they're doing the same. And that should be a you know, that really should be part of your vendor management and oversight, is asking those questions like, "What do you see?" and "What's coming?" and "What do you prepared for and how are you going to react to it?" It's not it's not a bad thing to ask those questions.

 

Lisa Hochgraf  28:09

And there you have it, CUES Podcast listeners, ask those questions. Thanks so much for being on the show today, Steve. 

 

Steve Hewins  28:16

Thank you. It was a wonderful time. I had a great time.

 

Lisa Hochgraf  28:21

Thank you for taking time out of your busy schedule to listen to today's episode of the CUES Podcast. 

 

28:27

And many thanks to Steve Hewins for sharing such great perspective on mortgage lending, a topic that's near and dear to credit unions. You can find CU Members Mortgage on the web at CUmembers.com. 

 

28:42

If you'd like to learn about becoming a CUESolutions provider, or a CUES Supplier member, or how to sponsor CUES content, please email kari@cues.org. That's k-a-r-i @cues.org. 

 

28:57

If you would like to read the shownotes for this podcast and a full transcript, please visit cumanagement.com/podcast 124. You can also find additional credit union-specific content on CUmanagement.com. Please check it out. 

 

29:14

If you're a CUES member, you have access to invaluable membership benefits to further enhance your development, many of which are available virtually. Make sure to visit cues.org/membership to learn more. 

 

29:26

Thanks again for listening today. 

 

29:28

CUES is an international credit union association. Our mission is to educate and develop credit union CEOs, executives, directors and future leaders. To learn how CUES can help you realize your potential, visit cues.org today.

 

CUES 123 Leadership and Learning Are Indispensable to One Another Alex Hsu, CCM

By Alex Hsu, CCM

 

Lisa Hochgraf  00:04

You're listening to the CUES podcast episode 123. 

 

00:10

Thank you CUES Podcast listeners for tuning in to the CUES Podcast. It's getting chilly in some areas of our listenership. And if you're not listening on the go today, I hope you can enjoy a hot cup of tea or coffee as you learn from the show. 

 

00:24

As you know, on the CUES Podcast you can hear from a wide range of cross-industry experts discussing trends and topics relevant to you. My name is Lisa Hochgraf, and I'm Senior Editor for CUES and its CU Management magazine. I will be your host today. Before we welcome our guest and jump into today's topic, we have a commercial from one of our sponsors. 

 

00:51

Frustrated by disparate planning and reporting systems, clunky old software or poor customer experience? Plansmith's unified planning solutions automate the process of creating annual budgets, long-range forecasts, custom board reports and ALM. 

 

01:08

Our professional advisory and outsourcing services led by former NCUA and FDIC examiners help you stay ahead of evolving regulatory demands and examiner requests. Whether you need help with budgeting ALM, CECL or are looking to outsource any of those processes, visit plansmith.com for details or to schedule a discovery call today. 

 

01:32

Get Plansmith for an exceptional planning experience. 

 

01:40

Today we'll be talking about innovation, and specifically what credit unions can do to embed innovation into their organizations. We'll also be learning more about the CUES Emerge program and what it's like to go through it. 

 

 

 

01:54

Our guest, CUES member Alex Hsu, CCM, is the 2021 CUES Emerging Leader. He's the VP of planning and change management for $25 billion SchoolsFirst Credit Union outside of Los Angeles. In the show, Alex talks about his CUES emerge project, which was to describe a framework for a center of innovation. Alex purposely designed his project with flexibility, so that his own credit union and other credit unions, including small ones, could customize it to their own needs. You can learn more about the CUES Emerge challenge and about Alex's project specifically from the recording of the pitch show found at CUESemerge.com. 

 

02:39

During the show, Alex also weighs in on his experience as a lifelong learner, the relationship between leadership and learning, ways to manage change most effectively, and how members of the 2021 CUES emerge cohort are still staying in touch. I think you're going to be impressed at how much you're going to learn from this conversation about the CUES Emerge program and cultures of innovation. So let's get started. 

 

Lisa Hochgraf  03:09

Welcome to the show, Alec,

 

Alex Hsu  03:10

Good to be here, Lisa, thanks for the invite. 

 

Lisa Hochgraf  03:13

To help our listeners get to know our podcast guests a little bit. We often start by inviting them to share a professional quote or a mantra that they live by. Would you have such a quote or a mantra to share?

 

Alex Hsu  03:25

Sure, Lisa, as an alum of UCLA, I'm a big fan of coach John Wooden's wisdom, one of my favorite quotes is "Listen, if you want to be heard." It is short, to the point, and I feel like it's impactful. And I consider myself a better listener than a speaker. So I do try to actively listen to learn, rather than to respond. So it's been an approach that's worked well for me. 

 

Lisa Hochgraf  03:46

I certainly have enjoyed the speaking that you've done in the CUES Emerge program, and then in your acceptance. But I hear you about the importance of listening. And that's a wonderful quote to share. 

 

03:57

So speaking of your speaking, I watched your impressive, award-winning pitch at the CUESemerge.com website. And I want to encourage all of the listeners to check it out too. Your project was about a model that credit unions can use to implement and run an innovation center of excellence, sort of a hub of innovation, if you will. I'm curious, where did you first get the idea for having an innovation COE? And what were some key steps to putting this idea into action at your credit union?

 

Alex Hsu  04:28

Yeah, so I've been working at schools first for almost five years now. And during this time, I've just been, you know, able to work, with just fantastic leaders. So I was able to brainstorm some ideas with our chief operating officer, Jose Lara, as well as my boss, SVP of strategic planning, Kevin Martin, and we talk about ways to accelerate the introduction of new products and services to our members. So currently, we do such a great job of serving our members current needs, but it's really challenging to be ahead of the curve to provide the latest and greatest even if we're one of the larger credit unions.

 

Lisa Hochgraf  05:01

So how long has Innovation Center of Excellence been in place at SchoolsFirst, and what's been the innovation that you've been most pleased to see take shape through the work of the center? 

 

Alex Hsu  05:11

Yeah, so one of the reasons why I chose to write about the Innovation Center of Excellence is that we currently don't have one in place

 

Lisa Hochgraf  05:18

Gotcha.

 

Alex Hsu  05:19

You know, and formal processes to drive innovation in our organization. But the efforts are really not centralized. And sometimes it feels a bit fragmented. So what we do have in place right now is a centralized Project Management Office, which has been in place for about three years now. And just the ability for us to have a dedicated group to achieve projects has made a significant impact in our ability to deliver these new products and services to our members. For instance, prior to the Project Management Office launch, we had some challenges with project delivery. And since then, we've been able to more than double our project completion rates. So that's something that I'm really proud of. We've been able to undertake one of the largest mergers in credit union history and in the past three years, in terms of innovations, we've been able to deliver Zelle money transfers, a new online mobile platform, as well as Zoom appointments for our members. So ultimately, you know, it really is all about our members. And these are products and services that they're asking for. And we have many more in our three-year road map that we're updating every year,

 

Lisa Hochgraf  06:22

I certainly hear you when you say it's a big job to stay out in front of the members and what they desire, especially with leaders in our market like Amazon and the like. So is SchoolsFirst now looking at adding a center of innovation to supplement the project management office?

 

Alex Hsu  06:36

Yeah, so the Innovation Center of Excellence is something that is being considered by our senior leaders for implementation in the near future. So one challenge that we've had is that with the pandemic, we've had to be a bit cautious about new FTE additions and investments. So at this stage, it is being considered and hopefully we can get the momentum and support to formalize it soon.

 

Lisa Hochgraf  06:58

You certainly have done a lot of the legwork and planning with your CUES Emerge project. So that's very cool, and hopefully very helpful. 

 

07:06

So far, we've talked a lot about your CUES Emerge project, which is part of the competition phase of the program. I'd like our listeners to learn more about your experience with the other elements of the program as well. And to that end, I have two questions for you. One is, what was your top takeaway from the learning part of the program? The second is, what was the camaraderie like among the other participants and the five finalists? Will you stay in touch with the CUES Emerge network going forward? And if so, how will that happen?

 

Alex Hsu  07:37

Yeah, great question. Lisa, I really had a wonderful experience being part of the 21 cohort for CUES Emerge. So, in the first half of the program, we had seven sessions with experts in different fields. We talked about problem-solving; we talked about change management. We also talked about communication. So and we also have those mastermind sessions, which were led by prior CUES Emerge finalists, and my top takeaway is really that all of us must be able to better tell stories to engage our audience. So I attempted to do that with my live pitch. I talked about my love of the Jetsons cartoon as a child and just, you know, being able to kind of hopefully, engage the audience there. 

 

08:18

So regarding your second question, I had, you know, really a blast being part of the larger cohort. We had 32 participants from all over North America. And also, you know, my smaller team was the Fab Five. And that was also a blast and our meetings, we just had a lot of fun, getting to know each other, sharing stories, and really pushing each other to be better as relates to our business cases. 

 

08:41

So I even had the opportunity to end up meeting my mastermind mentor, Geoff Bullock, in person. So we ended up you know, just by coincidence attending the same conference. So it was just great to make that connection live and in person. So in our cohort, you know, I really heard wonderful ideas from so many participants and you know, from my end, and I wanted to help them develop those ideas, further and vice versa. So we've all kept in touch virtually. We're connected on LinkedIn, and I was thrilled that so many joined in the watch party for the live pitch in early October.

 

Lisa Hochgraf  09:12

You know, Alex, I'm a big fan of the Jetsons too; such a fun show. And it really sounds like it was a wonderful cohort of people working together with the idea of helping people. So a great CUES Emerge, credit union philosophy experience, I'm so glad about that. 

 

09:27

To kind of change gears a little bit, I can tell from your LinkedIn profile that you are dedicated to continuous learning. In addition to your formal education, you have completed programs and certificates about everything from IT to change management to diversity. For completing the CUES Emerge program, you've earned the CCM designation, Certified Credit Union Manager. You've also earned your tuition to the CUES Advanced Management Program through Cornell University. How will having this designation and this additional learning opportunity be of benefit to you?

 

Alex Hsu  10:00

Yeah, at least I'm just so grateful for, you know, all the prizes that have been earned here. So I'm someone that really thrives on their environments where where learning is encouraged. So, when I completed my Gallup Strengths Assessment, for instance, my top strength was achiever, which is great for someone who leads projects, right? And my second top strength was learner. So really, throughout my career, I've sought to blend learning into everything that I do, which included going to grad school while working full-time and also pursuing these certificates. 

 

10:29

And earlier, when you asked me about favorite quotes, if I may I'd like to share a second favorite quote that I have, and this time it's by former President John F. Kennedy, and the quote is leadership and learning are indispensable to each other. And that's absolutely a mantra that I live by. And I encourage my team as well as mentees to learn as much as they can. And, you know, I feel that the CUES, learning opportunities will help me become a better leader in the credit union movement. And perhaps equally as important help me build a solid network with other credit union leaders or you know, probably just as equally as passionate as I am about helping to grow the overall movement.

 

Lisa Hochgraf  11:04

I love that idea that leadership and learning are indispensable to each other. Fabulous second quote. 

 

11:10

This is a great time, as you say, in your CUES Emerge presentation for credit unions to embrace innovation so they can better serve members and better compete in the marketplace. In your experience, what are some key things credit unions can do to help their teams fare better with the requisite change that comes with innovation, especially in these uncertain times?

 

Alex Hsu  11:29

Yeah, I hope that credit unions are able to formalize their innovation efforts. So when I wrote the business case, I did it with assumptions for SchoolsFirst, but I also designed it so that the plan being proposed was built based on the framework. So what that means is that everything that I put down in terms of timing and steps and budget can be modified to fit a smaller credit union or a credit union that wants to move faster than us or a credit union that doesn't currently have a focus on projects. 

 

11:55

So one of the things really is for the buy-in to occur at the most senior levels of the organization, meaning really starting with the CEOs and the rest of the C suite. So innovation can't be really something that the IT department works on when they have time, but rather something that really is embedded in the culture of credit unions. Most credit unions have a culture of service, which is wonderful. You know, we really need to expand service to include self-service, technology-based service, so that that's something that I feel that the members are asking for in today's competitive landscape.

 

Lisa Hochgraf  12:27

So would you say in part that success with innovation comes from having sort of a plan, a strategy, a framework and not going at it more hit-or-miss?

 

Alex Hsu  12:38

Yeah, absolutely. I think in terms of being able to formalize something and set certain goals and say, "Hey, this is what we're shooting for," that really allows the credit union to have focus and be able to set certain milestones that they're, you know, aiming to achieve for the long term.

 

Lisa Hochgraf  12:55

I think that's an important perspective because sometimes I think we think innovation is like these lightbulb moments, and then everything changes. But it sounds like you're talking about being prepared for it and setting a framework so that when big ideas bubble up, they have a reasonable pathway to follow. 

 

13:10

Thanks so much for all this insight, Alex. Before we go, I'd like to ask you if there's anything we didn't talk about today, that you think would help our listeners on their journey in promoting innovation and managing change in their organizations.

 

Alex Hsu  13:24

Yeah, thank you so much for having me, Lisa. I've had the pleasure to be interviewed by CU Broadcast. And during the interview I mentioned I'd be glad to be a resource for any credit unions who are seeking to drive innovation. And I'll make the same offer here as well. I really want the entire credit union movement to succeed long term. So it'd be my pleasure to share my business case, discuss possible approaches that change ideas. I'm definitely open to that collaboration with other credit union leaders.

 

Lisa Hochgraf  13:49

Marvelous. That's a wonderful offer. Thank you so much for being on the show today, Alex. 

 

Alex Hsu  13:54

Yeah, my pleasure, Lisa. 

 

Lisa Hochgraf  13:56

Thank you for taking time out of your busy schedule to listen to today's episode of the CUES Podcast. And many thanks to Alex Hsu for being such a great guest. Congratulations again, Alex on being named the 2021 CUES Emerge leader. 

 

If you'd like to learn about becoming a CUESolutions provider or a CUES Supplier member, or how to sponsor CUES content, please email kari@cues.org. That's kari@cues.org. 

 

14:28

If you would like to read the show notes for this podcast and a full transcript, please visit CUmanagement.com/podcast123. You can also find additional credit union-specific content on CUmanagement.com. Please check it out. 

 

14:45

If you're a CUES member, you have access to invaluable membership benefits to further enhance your development, many of which are available virtually. Make sure to visit cues.org/membership to learn more. Thanks again for listening today. 

 

15:00

CUES is an international credit union association. Our mission is to educate and develop credit union CEOs, executives, directors and future leaders. To learn how CUES can help you realize your potential visit cues.org today.

Transcript of CUES 122: How to Better Engage Members at the Critical Moment of Account Opening—an Interview with Andy Saner

 

October 2021 

 

By Andy Saner

 

Lisa Hochgraf  0:04  

You’re listening to the CUES Podcast, episode 122.

 

Thank you CUES Podcast listeners for tuning in. Fall is a busy time of year, and we hope that these shows are useful to you while you are listening on the go. As you know, on the CUES Podcast you can hear from a wide range of cross-industry experts discussing trends and topics relevant to you. 

 

My name is Lisa Hochgraf, and I’m senior editor for CUES and its CU Management magazine. I will be your host today. 

 

Before we welcome our guest and jump into today’s topic, we have a commercial from one of our sponsors. 

 

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Today we’ll be talking about member engagement and specifically how to engage members with products and services when they are opening an account online. Our guest, Andy Saner, says account opening is a moment when members are in a buying mood. So credit unions need to make the most of this opportunity to match them with appropriate offerings. 

 

Senior Vice President of Product Engineering and Data Services at CUES Supplier member Harland Clarke, a Vericast business, Andy leads technology teams that create outstanding customer experiences. Andy and his teams partner with sales, delivery and production to provide a seamless experience for their credit union clients and, ultimately, their members. 

 

Andy brings with him to today’s show a deep background in technology and operations. Before joining Harland Clarke in 2018, he was the senior vice president and director of strategic banking for MainSource Bank. This work included responsibility for digital banking and the context center. And he also held the role of director of operations at the bank and oversaw day-to-day operations, including document management, printing, facilities and bank processing. 

 

Notably, our guest is passionate about helping credit unions ask their members and potential members the kinds of questions that will reveal their true needs at whatever stage of life they’re in, so the credit unions can better serve those needs. 

 

I think you’re going to be impressed at how much you’re going to learn from this conversation about engaging members during online account opening. 

 

So let’s get started.

 

Welcome to the show, Andy.

 

Andy Saner  3:24  

Hi there, Lisa. Good to be here.

 

Lisa Hochgraf  3:27  

To help our listeners get to know our podcast guests a little bit, we often start by inviting them to share a professional quote or a mantra that they live by. Do you have such a quote or a mantra to share?

 

Andy Saner  3:39  

I do. It’s relatively simple but has proven to be effective for me. And it’s, it’s really just be curious and inquisitive. I have found that that has helped me really better understand and, and learn so much throughout my career. And specifically one of the areas I’ve really worked hard to master is the art of asking questions. It’s a skill that, like anything else, gets improved over time. And so as a leader, whether in sales, whether in operations, asking good questions, leads to good information, good data. It helps that curiosity and being inquisitive and just helping to find great ways to adapt and learn more.

 

Lisa Hochgraf  4:18  

I love that Andy. You know, I’m, of course, a journalist and magazine editor. I ask a lot of questions in my day. And that’s how we find out great stories from the people that we’re working with. 

 

Andy Saner  4:28  

Absolutely. 

 

Lisa Hochgraf  4:29  

So I’m looking forward to talking with you today about engagement with members. It’s so important, especially as the digital realm becomes ever more present in our lives. So let me start off by asking you: What are some times that credit unions try to engage members with additional products and why does the moment of account opening consistently turn out to be the best time to do so? 

 

Andy Saner  4:53

Well, so, as probably your listeners know, there’s lots of opportunities to engage their members and find opportunity to provide them the products and services that meet their needs best. What I think we’ve learned, what I’ve certainly learned over my career, and it’s, it’s substantiated with some good information, is that at account opening, you have a willing and an open buyer, if you will, right? Your member has already made the decision. They want to open the account. And so at that point, it’s, it’s the opportunity to really ensure that you’re matching them with the best products and services to make that account the most effective vehicle for them for their financial needs. 

 

It also is the time where you’re collecting information. I don’t know about you, but you’re right in the world we live in, you give your information on so many things, right, whether you’re signing up for an app or going to the doctor, you know, a rewards card at your local grocery store. And so giving that information once and allowing that to be the the only time I have to do that is really a good experience for me because then they can leverage that to do all the other things they need to do. Same thing here during an account opening process. You’re giving a lot of your confidential information, a lot of your personal information to open the account. If if they can take that same information at the time of account opening to, for example, sign you up for online banking, for getting you set up with e-statement, for getting you a debit card. They don’t have to ask some of that information later and make that process even longer. 

 

Deloitte actually did a study just about two years ago. And they found that when you match a member with products or services at account opening, 32% of the time, those become more profitable members to you as a credit union, then when not. That’s a 30% lift in your profitability. And so that’s that’s a benefit to the credit union. Another study that I saw, which actually came from CUNA, they were saying that member satisfaction is 48% higher when they are matched with their products and services at account opening as opposed to later on. And the No. 1 reason given was because they they got the advantage and the benefit of that product day one. They didn’t have to wait. They didn’t have to learn about it two, three, six months into an account relationship to understand the benefit. They were getting that benefit from the time of the account opening. So it’s just one of those times in your member’s lifecycle where you get a unique opportunity. They’re in kind of a buying mood and you also get a get a chance to leverage the information in the data that they’re sharing to really benefit the matching cycle that takes place.

 

Lisa Hochgraf  7:23  

I love those numbers. Those are great supports to the idea that working with a member when they first open the account is a wonderful time to talk to them, essentially about the opportunities they have with the credit union. We try to do that with CUES membership too. When someone joins CUES, we have a list of things that we talk to them about because we want to find out more about them and try to help serve their learning needs, in our case. 

 

Andy Saner  7:44  

Sure, exactly. 

 

Lisa Hochgraf  7:45  

So Andy, you’ve told me that using a guided approach to product selection at that moment of account opening when as you say, and I like this very much “they’re in a buying mood” is really a lot better than if they just kind of do it when they want to do it.

 

Andy Saner  8:00  

Yeah, so let me let me first start off by saying for those listeners that maybe aren’t aware, a guided approach would be leveraging a tool or some form of technology, maybe even it’s just a placemat. Some some credit unions have effective use of just a static placemat that help guide you through the account opening process, not only to ensure compliance and regulatory needs for the account opening are being met, but there may be opportunities during that that questioning that open up avenues to product matching. 

 

So a guided approach really is just what it sounds like a guided approach to walking a member, a new member or an existing member if they’re opening up a secondary account, through opportunities that may match or suit the needs of that account best. And so the reason guided product selection methods have become so much more popular--and like I said, some are low tech, or just a simple placemat or a piece of paper, some are getting much more high tech with digital matching and the opportunity for data to really help drive that matching process--the reason they become more successful or more prevalent is because it does an effective job of two things: introducing products and services to the member during the time of account opening, which we just mentioned was a good time to be doing so, but also creates an awareness, making sure that the credit union employees don’t forget some of those critical opportunities or benefits of products that could be available. So it’s just a tool like any other tool that we have at our disposal, but during account opening, it does provide a bit of a pathway, a framework, if you will, for matching up products and services with the account member during that account opening process.

 

Lisa Hochgraf  9:37  

So you’ve just talked about kind of a menu of ways that credit unions could do the product selection with someone that’s opening a new account. Talk to me a little bit more about digital now that we’re well into the pandemic era where digital has become so important. How does digital play a role in making the account opening experience better?

 

Andy Saner  9:59  

So digital really starts, and you heard me mention it maybe even my last response a little bit, but digital really starts with data. And so the data and the advancements in data collection, data management, the engineering of data, that capability has continued to grow to a point that it’s now allowing, I mentioned low tech versus some high-tech options for that data to be consumed and used in these digital systems that help with a more automated, more efficient, more even effective guided selection process. The data around not just you as an individual member, or a customer in front of you, but how their specific information matches up with the success of other members in your database. So if someone opening that is a brand new 18 year old opening up their first checking account, if you’re looking across your entire member base, the likelihood of hey, this member is more apt to need a debit card than checks, and it’s the best time to sign them up for a statement, then, as soon as you start putting in the information about the member their their demographics, their geographics, where they’re located, so and so forth, it starts taking that data in and matching it against the products and services that best have traditionally best met that demographic’s needs. So the digital aspect is great. 

 

And then what really happens is not only does that become a an effective tool, again, in account opening face to face in store kind of opening, but also online, it translates into the proliferation of these online account opening systems and their extensive capabilities to match you up with products and services during account opening. 

 

Now I’m using debit card, e-statement online banking because they’re simple things to match up with. But in a more complex member relationship, you may be able to match them up with some wealth management, some auto lending opportunities, credit cards. And so those take a little bit more data, in addition to credit scoring, and the like to really match a member to the best products and services. 

 

So digital has just been an extension, what started as a placemat, a piece of paper, got to be somebody writing down some information. And then that same person the the credit union employees that, hey, you know, the last 10 of these that I’ve opened, I found that these people really benefited from this product. And that’s just all getting put into databases. It’s the proliferation of products and services is so great now, it really helps make sure that you’re not over selling, and not not putting people into products they don’t need, but rather ones that really can help them and really get them to take benefit, full benefit of the credit union account. 

 

Digital is fascinating, all the recommendations we get when we’re out shopping online, and what you’re describing of using the data to help match a new account opener, if you will, to the products and services of the credit union they might need sounds like it could work really well. On the flip side, though, credit unions are all about people helping people. So where are the people in this picture? How do credit union employees contribute directly to the success of guided account opening?

 

That is a, it’s a really good dichotomy of experience, right? Because the online digital experience is designed to be effective and efficient, quick, if you will. credit unions, and rightfully so really value, the high-touch component that they bring to their member base. And so, just because you have a digital offering doesn’t mean you don’t want to be able to provide high-touch, good quality, in-person customer service, I think I would actually go back to my opening mantra, when you’ve got employees that during the time of account opening are inquisitive and they’re curious, you’re asking questions, you’re learning more about that member’s needs and what they have to have. You’ve got a tool in front of you that’s assisting you but doesn’t have to 100% drive you. And you understand through that relationship through those questions by by really getting a better understanding of what it is the account is meant for or that the interaction is meant for by the member, then you gain insight into the member’s needs and what he or she has worked in the past, potentially what hasn’t worked in the past. Maybe they’re open to trying something different in managing their money or a different vehicle for payments and the like. You’re learning that during some of that account opening stage. 

 

And it really does two things, right? It, it helps you match up better the products and services. But it also deepens that relationship. That’s really what we’re all after. You work so hard to get the new account opportunity by matching them up and showing and creating value for those members, both of the products and services but also that relationship. It creates a deepening, long-lasting engagement that really becomes not only profitable for the credit union, let’s be honest, that’s part of it. But the other extent is that you really feel good about helping your members serve their needs. 

 

Again, I’ve been in the industry for almost 15 years now. And one of my former leaders talked a lot about how it’s a noble profession, financial institutions, you know, in the work that we provide. You’re getting people into their potentially their first home, the first time that they buy a car, student college loans and being able to further their education. Maybe they’re they’re taking a lifelong trip for the first time and they’re needing just a little bit of help getting through that. It’s it’s really kind of a unique opportunity where you meet people at the point they may need you most. And so that high-touch, having somebody in person asking questions and learning more about the individual is still a really, really key component for the account opening and engaging the account opening member.

 

Lisa Hochgraf  15:27  

All through this discussion, Andy, I’ve been thinking about how years ago, when I first started writing about credit unions, we wrote a lot about indirect lending, and how people would go to the dealer and they would get their loan there, and then credit unions would never hear from them again, and how to deepen the relationship with a member that just had that one loan with the credit union was a point of a lot of discussion. And this kind of reminds me of that. So I can see why trying to do a lot at the very beginning makes a lot of sense. On the other hand, there’s going to be the one that gets away, there’s going to be the one that got the indirect loan even still, right, and we need to try to find a way to follow up with them. What would you say is the best way to reengage account holders? They’ve already opened an account. They would benefit from additional products from your credit union.

 

Andy Saner  16:13  

So you’re very right, at least I mean, you you have to be careful not to over I mentioned previously oversell because it is an account opening, it’s not a soup-to-nuts kind of opportunity. You’re trying to match them up with the most beneficial products and services at the time of account opening. Maybe that is just simply checks. Maybe that is just simply a debit card. That’s great, that’s definitely a good start. But to your point, once you’ve gotten the member into your credit union, you want to be deepening that relationship and finding ways to engage them even beyond the account opening process. Just because you didn’t sell them something where they didn’t take a product offering at account opening doesn’t mean that you won’t get another chance to do so. 

 

But again, I’m gonna go back to some of the data aspects I’d mentioned before. And that’s where you can often tell that as a relationship grows, months of account balance information, usage and transaction data, it starts to create some profiles, if you will, of members that maybe have benefited from some of those lending vehicles. Maybe it’s simply a credit card for a new account holder. Maybe it is an offering where you’ve noticed they’ve they’ve had a large influx of money into their accounts. Maybe that’s an opportunity to find a wealth management vehicle for them that might suit their needs. Maybe it’s some refinancing of debt, because you can see that they’ve got several loans and consolidating that is actually going to provide them a benefit for reduction in not only payments, but also complexity of their financial situation.

 

Using that data and creating data-driven campaigns that target those groups of individuals is a great way to really deepen the relationship by offering them not just all products, not just that kind of smorgasbord, but a much more, you know, surgical approach to the kinds of offerings you think fit best with that member. Again, I’ll hearken back to the leader I had mentioned or referenced earlier. And he would, he really had us focused on what he would call building a fence around your members. Obviously, as we all do, right grass is greener on other side of fence. But if you can keep people from looking, or at least enjoying the pastures that they’re in, you get a chance to deepen that relationship. You don’t lose so many members because they find that vehicle or that opportunity, product, service elsewhere when you could have been providing it to them all along. 

 

So it’s really important that you don’t just open the account, whatever you get opened at that time is all the all you focus on, you continue to engage those customers. There’s so many new channels that create really good, focused, personalized communications. That can be simply email. Certainly, that’s one that’s been out there for a while. Direct mail, actually, during COVID continued to be a really effective channel. And it’s high-touch, especially for younger generations, believe it or not. They have found that the touch and feel of postcards and letters that is personalized and has a touch and feel to it, they enjoy getting mail, right? It’s something that those of us are a little bit older kind of take for granted. But a younger generation hasn’t enjoyed that kind of an experience as much. And then there’s really some great new channels out there: social media, SMS, text, even contact center outbound calling for some of your high-value clients with a personalized communication message, just touching base, inviting them to join a a webinar, educating them about other things, small-business needs, the list goes on and on. But the point being: just getting the account opened and adding that member to the credit union, that’s a huge start, right? That is that you can’t do all the other work without that. But don’t forget that once they’ve joined, their needs are going to evolve, they’re going to change just like all of ours do. So engaging them using the data as best as you can within your environment or finding a trusted third party that can assist, there are a lot of great ones out there, that can help you and assist in that are really, really important ways to continue to deepen the relationship after the account is opened.

 

Lisa Hochgraf  20:03  

Thank you so much for all of this insight. Andy, before we go, I’d like to ask you if there’s anything we didn’t talk about today that you think would help our listeners on their journey to better engage members and potential members.

 

Andy Saner  20:15  

Yeah, I thought about that, Lisa, as I was sharing some of the comments earlier. I think the two things that stick out are the environment we live in has changed. High-touch, personalized communications are really going to continue to be a welcome vehicle for a lot of our members and even our employees, right? We can’t forget that a lot of them need that same kind of high touch and personalization. Likewise, it’s going to be more important that we’re secure and compliant in how we’re doing a lot of this work. And so far be it for me to step into the security realm. But I do think that’s an element that our members are now expecting more than ever, that they expect secure data management. They expect compliant use of their data. So making sure that you’re following those steps, making sure that you’re getting the opt-ins as needed, continue to be super important because you don’t want to over communicate or oversell unnecessarily. That will turn members off as much as anything. So you know, I think the evolution of the environment, and really taking ownership of that data and that experience really ensure long-term success for not just the credit union, but the members that you’ve brought in as well.

 

Lisa Hochgraf  21:24  

Wonderful. Andy, thanks so much for being on the show today.

 

Andy Saner  21:28  

Yeah, this has been great. Thanks for having me.

 

Lisa Hochgraf  21:32  

Thank you for taking time out of your busy schedule to listen to today’s episode of the CUES Podcast, and many thanks to Andy Saner for being such a knowledgeable guest. 

 

We also want to extend our deep appreciation to Harland Clarke, a Vericast business, for being a CUES Supplier member and for sponsoring today’s guest.

 

Harland Clarke has also been the sponsor of CUES’ quarterly Advancing Women online publication, helping us to provide information and inspiration for current and aspiring female credit union executives and those who support them. 

 

If you’d like to learn about becoming a CUES solutions provider or a CUES Supplier member, or how to sponsor CUES content, please email kari@cues.org. That’s k a r i at cues dot org. If you would like to read the show notes for this podcast and a full transcript, please visit cumanagement.com/podcast122. You can also find additional credit union specific content on cumanagement.com. Please check it out.

 

If you’re a CUES member, you have access to invaluable membership benefits to further enhance your development, many of which are available virtually. Make sure to visit cues.org/membership to learn more.

 

Thank you again for listening today. CUES is an international credit union association. Our mission is to educate and develop credit union CEOs, executives, directors and future leaders. To learn how CUES can help you realize your potential, visit cues.org today.

 

 

CUES 121 Famous or Not, We All Have to Work on Mental Health

By Dee Baker Amos

Tony Covington  00:00

You're listening to the CUES podcast episode 121. 

 

Thank you CUES podcast listeners for tuning in to the CUES podcast. We appreciate how busy you are, and I hope that these shows continue to be useful for you while you are listening on the go. As you know, this is the place where you can hear from the wide range of cross-industry experts discussing brands and topics that we hope are relevant to you.

 

My name is Tony Covington and I will be your host today. At CUES. I'm the vice president of new markets, where I am tasked with helping to design customized talent development strategies for nonprofit and social profit organizations. I have worked in the nonprofit sector for over 20 years with established organizations such as the American Heart Association, Special Olympics, the United Negro College Fund, and the NAACP to name a few. I'm a former NFL player with the Tampa Bay Buccaneers and the Seattle Seahawks and a graduate of the University of Virginia, where I currently serve as the radio color commentator for UVA football. I am a motivational speaker, author, husband and proud father.  

 

Now, enough about me. Let's get to today's topic, which has always been an important one. But many have felt or feel that it's that elephant in the room that no one really wants to discuss. As of late, however, its importance has been underscored by the pandemic. And now athletes are beginning to come forward to discuss it as well. Today's topic is mental health.  

 

I'm incredibly pleased to have Dee Baker Amos as my guest on the show today. I've known Dee since our days back at the University of Virginia. And now she is the vice president of marketing and communications at DFW, the Dallas-Fort Worth International Airport. Previously, she worked in executive roles at the American Heart Association and she earned her MBA at Clark Atlanta University.  

 

Dee has a lot of insights to share about the role that executives play in caring for the mental health of their team members. She also talks about her efforts to take care of her own mental health and the importance of respecting those key moments of reflection that occur in all of our lives. I think you'll really enjoy this conversation with Dee and gather some ideas you too can use right away.  

 

So, let's get started. 

 

Welcome to the show Dee. 

 

Dee Baker Amos  02:33

Good to be here. I certainly appreciate the invite. Thank you so much. 

 

Tony Covington  02:37

Well thank you for your time and blessing us. And we cannot wait to hear what you have to say.  

 

Why don't we help our listeners to get to know you a little bit? And I wondered if there's a professional quote or mantra that you live by that you'd like to share? 

 

Dee Baker Amos  02:52

You know, my quote, and it's actually more of a scripture, but what I live by is "to whom much is given, much is required." And that is how I view both my professional life and even my personal life because I have been blessed. And I believe at the end of the day, you are blessed to help others. And so that is how I lead. And that is how I raise my children. 

 

Tony Covington  03:19

That's awesome. Absolutely fabulous. I got chills, because I'm a fan of that quote, too. So we are seeing simpatico right now. 

 

Dee Baker Amos  03:26

Awesome.

 

Tony Covington  03:28

The past year has brought the topic of mental health and self-care to the forefront. Obviously, there's been COVID that has affected a lot of us. But there has also been high-profile examples in sports recently, where athletes have set boundaries for their mental well-being. What should we be saying and taking away from this discourse? 

 

Dee Baker Amos  03:49

So first and foremost, I think the notice about how you have high-profile people and athletes talking about their own mental health. First and foremost, I applaud that, because I think far too often, we don't feel comfortable in sharing it. But to your point and your question, I really think the importance of mental health and well-being, No. 1, it's real. And I think that that is what you're seeing in the discourse.  

 

I think the other piece that you're seeing is that we all have to work on it, famous or not. And I want to actually repeat that because I think that it's something that people have to hear. We all have to work on our mental well-being, famous or not. And what I think you see in the latest discourse from the athletes is this whole need for boundaries. And I believe that things like social media have really been a part of what I call the blurring of the lines, where you don't have the same level of boundaries perhaps that maybe even we grew up with that I think are impacting people's mental well-being. 

 

Tony Covington  05:02

I think it's fabulous, quite honestly, from the standpoint of being a former athlete and the issues that are out in the mass now. It's issues that have been going on, things that mean, I know, it was difficult, the loss of my mother, when the game was taken away, when it was over for me, and it was time to start the next career. And you know, it was depression, that you didn't know was depression. It's very refreshing to see these athletes being able to step to the forefront and feel comfortable because it is kind of something that you don't talk about in the African-American community and so to see these athletes coming out to the forefront, I think is extremely important for the next generation of athletes as well. 

 

Dee Baker Amos  05:45

I couldn't agree more. And I want to underscore something you said, two points. No. 1 about the fact about depression. And even you have shared what I would probably call reflection points in your life. Everyone has things that happened to them that it is okay to feel sad, just like we celebrate people feeling happy. And when you have reflection points, like the loss of your mom, and I've seen your posts, and so I know how amazingly close you were to your mom, and how instrumental she was in helping you to be who you are today. I want people to know it is okay to be sad about losing your mom, period. And I want us as a people, as a world, to be comfortable with not only accepting that people are sad because it doesn't necessarily mean you have to put a label like depressed or bipolar. It's a feeling. And I think we rush and move so fast that we stop being respectful and caring about feelings. And I love it that you are really one that would No. 1 share those the way you do, because you're absolutely right. And the Black community, we haven't gotten to the place that I would love to see us get to where we accept that, we are open with the dialog. And most importantly, we're open with giving the care and concern that anybody needs when they go through any period of reflection of sadness, of loss. 

 

Tony Covington  07:26

Yeah, and just to kind of piggyback on, you know, when we talk about the sports aspect, and then we move into how tricky it is to have that mental health discussion in the workplace. Most of us don't feel comfortable disclosing our struggles in detail anyway. And besides that there are a lot of legal issues related to health privacy at work. So managers need to take care of or figure out a way. How do I talk about mental health? I want to make sure that I'm not making anyone uncomfortable, you know? And so with that said, how can leaders approach mental health and self-care in the workplace? 

 

Dee Baker Amos  08:04

You know, that's a really great question. And it's actually one that I myself over the last year have found myself having to not only answer, but lead through that just because of I think the increased level of anxiety that COVID and the pandemic has brought. But to answer your question, I think leaders must first be willing to discuss and acknowledge mental health. And I think it becomes a part of the discussion around the benefits that a company or an organization provides. I think that's the safest way to your point about legal issues. And I'm also going to add HIPAA issues, most companies as a part of their benefits will offer some level of mental support, the same way they offer for physical health and wellness. And I think the first thing is for leaders to be aware of that. Be aware of the resources to be able to direct their staff and your employees if they have a need. 

 

And then here's the second part that I have found that is really been probably the most impactful. Leaders must be willing to share and personalize their own journey and what they're going through. In my team at DFW Airport, I have conversations where I share when I am tired, when I am stressed. We just had a department meeting and just like everybody else, we're all on Zoom, and we're on camera and I asked everybody to raise their hand if this has been a really tough week. And most of the times, I raise both of my hands because I tell them that I'm counting for two because it is a lot to deal with. And what I have found is when I am willing to be vulnerable and to share, I have found that whether they share within the group, they will always come back to me via text or individually and say, "Thank you. I'm feeling the same way." And so leaders must decide that it's not just about leading people for the work, but it's leading people for the lives that they live. And this whole notion about mental health is really real. And you have to get to a place where you feel comfortable with sharing your own journey. 

 

Tony Covington  10:30

Yeah, and I think, to your point, providing an atmosphere where there's psychological safety, because without that piece, they're not going to come forward and have those conversations, you know, by you making yourself vulnerable and sharing your story and your journey, that gives your staff then the opportunity. Well, you know what, maybe it is a safe space that I can talk to my supervisor about what I'm going through, because ultimately, things that impact you outside of work will impact your work. So being able to have that space, that safe space is extremely important. But from an organization standpoint, how do you bake taking care of mental health into policies and culture? You know, for example, how would a manager or supervisor react to an employee who calls out for a mental health day?

 

Dee Baker Amos  11:18

So it's a great question. And again, one of the things that we faced at DFW Airport, so I manage our communications. That includes, of course, our employee communications, our internal and at the very beginning of the pandemic, it was important for us to share information about COVID from the perspective of what are those protocols that you must do to feel safe and to be safe and to keep your family safe? Well, where we really netted out was, we really needed to balance that message with the balance of what must you do, in the midst of a pandemic, to really address the emotional, and the psychological on top of the physical impact of a pandemic and what was going on in our world. And so we actually started to include articles about emotional well-being and mental health in our daily employee messages. 

 

And it was interesting because the moment that we started to include those, I would get emails across the organization, 2,000-plus employees, where people will say, "Thank you for including this. his is really great." And so now, as a practice, we include those types of articles in all of our employee communications. And we also take the opportunity to include those in our leader messaging, where we say, "Here's some additional articles that you may want to share with your team." 

 

Because as I said earlier, I feel comfortable being vulnerable and customizing and sharing my journey, but not a lot of leaders do. And so what I would recommend is, if that's not the area that is your strong suit, then find great resources like articles and things to share so that, to your point, it creates a safe space, where people can say, "This is not a good day for me," and I have had those conversations with people on my team, where they have said, "Today Dee, I need the day off. It is not physical. I can't take anything else today." And what we have done, and what I'm very proud of, is I think we do a good job of listening. And we do a good job of saying, "Take the day off." But here's the caveat, "Take the day off and here are the resources that the organization has. Consider calling and either talking to a therapist or going and get a massage. Go and get a physical cause see, it should be connected to something that allows people to be able to improve or get some help.

 

Tony Covington  14:04

And that's great. Those points of connectivity and letting them know that their resources are there and available for them are extremely important in you being able to feel comfortable sharing your vulnerability and your journey. With that being said, what are some of your self-care practices?

 

Dee Baker Amos  14:21

So you know, you asked me this question and I laugh about it, because probably one of the things that I need to work on the most, and I recognize that, but I will tell you what I do and I started to do in the midst of the pandemic. I didn't do beforehand, but it's really made a difference for me. So just like everybody else, at the very beginning of the pandemic, we were all in lockdown, and we were all in the house with our loved ones air quote, for a long, long period of time. A long, long period of time. Let me say that again, a long, long period of time. 

 

And so one of the things that I started doing on Saturdays is I actually started getting out the house, and I would get in the car. And I would simply drive around and be by myself for about an hour to an hour and a half. I finally decided that I wanted to go to a couple outdoor shopping plazas and so because shopping is always a great therapy for me. And here was the thing. I didn't always go into the store. Sometimes I would drive to the place, and I'd sit there, and I would think about the people who I hadn't talked to, and I'd catch up with people. A couple of my friends know they can get me during this. She's in the car time on a Saturday. And it became one of those things that I really look forward to. 

 

What I liked about it was it was me saying, "I need to do something different." And I point that out, because that, to me is what self-care is about. Self-care is about you identify what you need, and it may not be the same as your best friend or your spouse. One of the other things that I started to do since the pandemic because we are always sitting in chairs a lot. And I don't know about you, but I keep a lot of stress in my lower back and in my shoulders. I started getting a massage every month. I had someone that had suggested for me to do that years ago. And I kept saying, "I don't have time. I don't have time." I decided, after my right hip kept hurting me to the point that I knew that it was because I had been sitting in this chair, I had to make the time. So I go and get a massage. I drive around on Saturdays. And, you know, I probably will continue to add to the list as I need to.

 

Tony Covington  16:47

And I think that's the biggest thing, just finding a space for self, bottom line, you know, and to just be whatever that is for you. You know me. I have this thing with chasing greatness to find what greatness is to you, and then go out after it with relentless pursuit. I think when it comes to that self-care piece, that it has to be that type of journey for each individual, and no journey is a life, you know, and so to keep moving forward, taking kind of a overall understanding of what you're going through into your earlier point. It's okay. It's okay to show emotion to break down some time because you recover. And that's the biggest thing. You can recover. But you got to be in tune with self sometime and the overall taking an inventory of how you're feeling, we have to do it. We have to take time to do it. If we don't, then we do ourselves a disservice. And the ones that we love a disservice if we don't take care.

 

Dee Baker Amos  17:45

Absolutely.

 

Tony Covington  17:46

Kudos to you for having done the inventory and are looking for ways to continually develop self-care techniques. Thank you for sharing that.

 

Dee Baker Amos  17:57

You're so welcome. It was actually out of necessity. You know, and I think that's the other piece about self-care. I liken it to the gas indicator on your car. You guys think about your gas indicator on your car. We don't wait until we are past the E to go and to refuel. Most of us don't. I remember a time when I did do that. So I can admit that. But now I do try to make sure that I don't get past the E and that to me is what self-care is. It's about you having your own obdomiter, your own metric, your own measurement, and figuring out what do I need to do to refuel? And I think the reality about, you know where we are right now in the pandemic, and how our worlds have changed is what worked for probably a year ago may not work now. Be flexible with finding something new. 

 

Tony Covington  18:54

Indeed, indeed. Well, before we get out of here, we want to close with one little segment called message in a bottle. And what that is, what is the message that you would leave to your younger self?

 

Dee Baker Amos  19:06

You know, because I have a son that's just gone off to college, I have been thinking about this because I've been trying to figure out how to give him advice. And the one thing that I would tell my younger self is one of my favorite words. And it is perspective. I think when you become older and more mature, you start to see things and your perspective grows. And I think that that's the one piece that if I could do anything differently, I would make sure that I was looking out for perspective. 

 

And let me give you my analogy and how I see this. The best one that I think of and I even used to use this before going to DFW Airport is about an airplane. When you are in the terminal and you're looking at a airplane out of the window, the airplane looks really big. When you're walking on the jet bridge, and you're getting onto the airplane, the airplane, again, looks really big. When you are in, whether it is a building, or outdoors and an airplane is flying above, that same really big airplane now doesn't look as big. That is how I think about perspective. When we think about challenges in our life, things that we're facing, I ask people, "Are you looking out the window? Are you on the jet bridge? Or are you watching it soar?" And oftentimes, no matter what the challenge is, if you can look at it through those different lenses, more than likely, whatever seems like it is the end of the world and it is just never ever going to be right, you will figure out how you can soar in it. 

 

And so that's what I wish I could tell my UVA, Delisha self is, "Think about perspective. And don't just look out the window at the big airplane. Figure out how to look above at the sky." 

 

Tony Covington  21:11

Wow, thank you for blessing us with our first show. And this has been awesome. 

 

Dee Baker Amos  21:17

Well, it has been a blessing. And again, thank you for the invitation. It's always a blessing to talk with you.

 

Tony Covington  21:26

Thank you for taking time out of your busy schedule to listen to today's episode of the CUES podcast. And many thanks to Dee Amos for being our guest. 

 

If you would like to find the show notes for this podcast and a full transcript, please visit cumanagement.com slash podcast 121. You can also find additional content on mental health and wellness on cumanagement.com as well as lots of other credit union-specific content. Please make sure to check it out.

 

If you're CUES member, you have access to invaluable membership benefits to further enhance your development, many of which are available virtually. Make sure to visit cues.org slash membership to learn more.  

 

Thanks again for listening today. 

 

CUES is an international credit union association. Our mission is to educate and develop credit union CEOs, executive directors and future leaders. To learn how CUES can help you realize your potential, visit cues.org today.

CUES 120 Lending in a Two-Lane Economy By Harry Singh Lisa Hochgraf 00:04 You’re listening to the CUES Podcast, Episode 120. Thank you, CUES podcast nation, for tuning in to our latest show. Whether you’re listening from your office, your home or your car, we are grateful to you for joining us. As you know, this show is where you can hear credit union industry experts and cross-industry leaders give a wide range of perspectives on trends and topics relevant to you. My name is Lisa Hochgraf, senior editor for CUES and our Credit Union Management magazine. The pandemic has affected people’s financial situations very differently. While a third of consumers report being concerned about their finances, some individuals currently have more cash than they had when the pandemic started—and they’re ready to spend it. How can lenders best navigate such a dichotomy? Our guest today will offer insights into both what credit unions can do to make smarter, more efficient decisions now and also what might be coming next. Harry Singh is a senior vice president with Experian, a CUESolutions silver provider. So let’s get started. Welcome to the show, Harry. Harry Singh 01:24 Hey, Lisa. Thanks for, thanks for the invitation. Really glad to be here. Lisa Hochgraf 01:28 To help our listeners get to know each guest on the show, we often ask if there’s a professional mantra or a quote that our guests live by that they’d be willing to share? Do you have such a mantra or quote? And why is it significant to you? Harry Singh 01:44 So great question, Lisa. So, I do actually I use it both professionally and personally, to different effects. So “less is better.” For those of you who may be familiar with Dieter Rams, you know, he was a German industrialist web designer. But, but the principle essentially resonated with me because what it focuses on is the less design when you’re creating a service or product, wherever it’s going to be the better. Because essentially, you’re focusing on the job to be done for the end user. So, so less, but better. Lisa Hochgraf 02:21 Kind of a contrast to the old, less is more, right? Harry Singh 02:25 Absolutely. I mean, I think you can over engineer things. I think some of the, some of the products and services and, and some of our greatest achievements in technology have always been with the simplest products. You know, things have evolved, if you think about our first, our first Mac, you know, back in the day, and what what it can do now, our first iPhone, our first iPod and how they’ve evolved over time, but the initial was always less, you know, start with something simple that resonates, that works, that answers a job to be done. And, you know, starting from there, you can always build an industry, but you really focus on the end user and the job to be done. Lisa Hochgraf 03:03 And how do you apply this idea in your work for Experian? Harry Singh 03:08 Regularly. So, you know, as a, as a business that supports both consumers and end organizations of varying size, we are always thinking about the end, the end product, the end user, and you know, 99% of the time, that’s consumers, and we’re thinking about their financial health, the fiscal ability to obtain credit, how do we protect them? You know, those are, those are key principles of our strategy. So you know, when we think about less is better, all the products that we develop, and the services and solutions that we take to market are always really driven from that end user applicability, and why it resonates and is important and meaningful to consumers, or the organizations that serve? Lisa Hochgraf 03:55 Well, that’s a wonderful quote and a fantastic application. So today, we’re going to talk about your new ebook, “Navigating a New Era of Credit Risk Decisioning. And it takes a look at consumer spending behaviors and how lenders are navigating today’s complex landscape. What were some of your most interesting consumer findings? Harry Singh 04:16 Good question, Lisa. So I think I mean, we find a find a range of things, actually. Largely, I think you could predicate it around changing consumer behavior. And what do I mean by that? Well, you know, when we looked at the data, we looked at the findings from our report, some really, really interesting and meaningful insights became apparent, one of which is that there’s potentially an underlying two-lane economy developing, which potentially was there pre-pandemic, but it’s really being accelerated and exacerbated that, you know, because of the pandemic in the in the, in the, the nature of the fiscal and macroeconomic implications of it. When we looked at the sort of data points underneath and some of the findings, we found, actually one of three consumers that we talked to are still quite concerned about their fiscal health, their finances, both today and going forward. Yet, conversely, at the same time we spoke, we saw a lot of individuals who have substantially more cash and savings then they had before the pandemic actually began. And neither at this point where they’re thinking what to do with it, do they spend it or they continue to save it. We also discovered that consumers are, you know, not reducing their discretionary spend as much as they were six months ago. So that’s starting to materialize now into the economy. 7% are spending more than they were a year ago. And you know, really interestingly, high income households, which we define as earning more than about $100,000 a year, they’re spending the most. So as you can see, there’s a there’s a range of findings, but it really does support the principle that consumer behavior is changed. And the question is, is it going to maintain and sustain as a change in behavior but underlying that there’s probably different segments of society that are impacted very, very differently by the pandemic. Lisa Hochgraf 06:10 That’s all very interesting. Why does this environment make it more difficult for lenders to be able to offer the right loans and products to the right consumers? Harry Singh 06:20 Yeah, so it’s probably one of the main questions that the industry is trying to trying to navigate and deal with right now. I think there’s a couple of areas that, you know, you’d have to you know. Organizations really do need to understand the needs of their, their customers. And that has to be a deep understanding, you know, leveraging a range of different data sets. And that can cover any, any any end of the spectrum within society. We’ve had, you know, we talked about a macroeconomic impact of the pandemic. This is one of those that have been legislated. So the great deferral, or forbearance, in a lot of organizations and lenders have offered their customers payment holidays. Some of those have deferred payments. So, you know, if you’ve got a mortgage, you might be able to pay that at the end of your mortgage. A lot of them haven’t. A lot of them have said for a period of time, you know, you can have a payment holiday. But you still accrue, you know, you still have an outstanding balance at the end of it. So there’s material changes in in society, that there weren’t there pre-pandemic. I think it wouldn’t be when we start to look beyond some of those significant changes, and then trying to understand those changes, and what they mean for our, for our society, we need to go way beyond our traditional data sources. And think about utilizing, you know, not just traditional data, but alternative data, and new types of data that we haven’t really thought of, of utilizing within this space, such as synthetic data. And, you know, we can, we can talk about that in a little bit more detail. And now, there’s a lot more in the way of tools that weren’t there, you know, in the last in the last downturn, you know, which was several years ago, 10 years ago, maybe a bit more now, the use of advanced analytics, the use of machine learning, you know, that just didn’t exist in the same way and availability as it does today. So the environment is difficult. people have changed that behavior. Some of the historic data that we we would have used or lenders would have used is no longer relevant. You know, yesterday’s data is probably the most predictive, you know, rather than the last two or three years because the world has materially changed. Yet at the same time, I think we have the opportunity to utilize technology, advanced analytics and you know, both traditional nontraditional data in a way that’s never been used before. Lisa Hochgraf 08:40 That sounds kind of exciting, although also kind of challenging. What would you say lenders can do to make smarter and more efficient decisions as they navigate this landscape? Harry Singh 08:51 Yeah, it’s a great question that some it’s a constant conversation, we have Lisa, with our, with our clients. You know, we partner with a lot of clients in this space. And they’re, and they asked that question regularly. I think, you know, if we if we just reflect on the decision and report that we published, I think we identified probably three areas that you know, lenders need to think about, that helps them to navigate the complexity of the current landscape. I think probably the first area that spend a minute or two on you know, it’s how do you leverage data and advanced analytics? I think I touched on it a minute ago. How do you create a comprehensive understanding, not just a risk, but also the opportunity within their portfolio and and, you know, the visibility and the transparency into how the behavior of the profile of the consumers in their in their portfolio is changing. Now, those those are important those important areas. What are what are consumers doing differently? What are they adopting differently, such as in a digital channels for for lending. You know, are they are they shopping in different ways? We’ve seen that in our report as well that you know an acceleration and an adoption of online, as you know, just been exponentially seen across the globe, not just in North America. So leveraging data, the use of advanced analytics, you know, such as machine learning, I think is important. And the secondary we sort of identified with, and we spend a lot of time to clients talking about is, how do you know, proactively engage your customers, the people that you serve? And how do you tailor and personalize offers, solutions, products to their needs? Right, so and that’s not just, you know, we I think historically, we talk about personalization and offers, people always think it’s about buying something new or, you know, obtaining credit to do something. When we talk about personalized solutions and outcomes, and outcomes as a really important, really important term for us as a business. We’re thinking about the needs of that consumer at point in time. And it may be, you know, they’re getting married, and maybe they need to buy a car, but it may be they’re in financial difficulty, and they need a different type of offer or treatment that helps them through a difficult period, such as the pandemic, but as they come out the back end of it, you know, they become a very, they become a very profitable customer for the lender. So we’re really, you know, encouraging our clients to proactively engage their customers. And in going back to my first point, leveraging data to truly understand their customer base, and utilizing analytics to really come up with outcomes and treatments that that reflected with their needs. And I think finally, and this is something that I think people are aware of, but I think it’s somewhat masked in the current in the current climate, there is going to be a potential wave of delinquency. Like I say, you know, a lot of consumers that they have taken payment holidays right now. But if you if you look at their trajectory, and their trended affordability, pre-pandemic, you know, either their affordability has not improved, or potentially it’s got even worse. You know, as they come out of payment holidays in some countries around the world, you know, fair, low payments, where the government is picking up, it’s picking up salary checks, once that comes to an end, affordability changes, and you know, how people can in a service, their credit commitments, materially changes as well. So payment, holidays are coming to an end. I think it’s going to become apparent that that two speed economies is more visible. And what lenders are really doing, and they’re working with us on this, and you know, we’re partnering with them today is how do we make it easy for consumers that are really struggling to find the right outcome, the right treatment for them. And that’s been done, you know, in a very different way than it was, you know, 10-12 years ago. Digitally now, a lot more of its online. How do we how do we allow people to self-serve and really, you know, understand their fiscal position and the implications of it. How did they find the right treatments and information that they need? So, like I said, the three areas that are really important too, is leveraging data analytics, how do you proactively engage your customers and consumers, and I think the industry has to prepare for a, you know, a significant wave of delinquency. Lisa Hochgraf 13:07 Very interesting Harry. At the beginning of the pandemic CUES did a lot of coverage about how credit unions were working with their members on both ends--on making loans, things like mortgages at the drive-thru and also on the payment holiday that you’ve been talking about and working out loans and making plans so that they could continue to stay solvent. I think it’s very interesting that you’re saying that now as things come to the end, in terms of the supports that were put in place by governments and other organizations to help everybody get through that credit unions are again, going to need to be creative and working with their customers. It’s very revealing to me, and you mentioned at the end of your answer to the last question that digital and being online and self-service will be very important to this moving forward after the pandemic. Your research found that consumers continue to prefer digital banking too. Do you expect that trend to continue upwards? Harry Singh 14:05 Yes, I mean, I think it you know, essentially, the simplest answer I’ll give you today, Lisa is yes. If you look at the, you know, any sort of data, any sort of insight report, pre- pandemic, that trend was already there. It’s just accelerated. I think there’s been a range of things that have done so. I think, to your point, that pandemic forced, you know, a lot of people to bank online. And I think people have discovered it’s actually quite convenient to do so. You know, we worked with a client, you know, not getting into too much detail, that had all of their operational centers closed, their bank branches closed. And they, you know, they’re quite they’re their customers, their consumers couldn’t access anybody to speak to, to actually get a payment holiday. Now that has an implication on their credit file, has an implication, you know, a number of ways on you know, obtaining credit going forward. You know, we worked with them and we help them develop, you know, we developed for them, actually self-service capability that consumers could access and just ask for a payment holiday or a different make a payment, for example. And in what we’ve seen as a result of that is that that’s just persisted. You know that and that change in the the portfolio, the dynamic of the portfolio for that particular bank, has just persisted and continues to grow. And what was interesting is, when you look at the demographic of the people that we surveyed, a really interesting one for me is we generally hear a lot, and I don’t think this is fair, a fair reflection that certain members of society, especially older members of society, you know, don’t like being digital. Actually 40% of the consumers that we surveyed that were between the ages of sort of 60 to 69, all applied for a new card or loan online during that period. And that’s particularly different to some of the data points that we’ve seen in the industry before then. And I think the expectations are such on the rise, you start there and then what else can I do? What else is convenient from and I think more than half I think it was 55% of our consumers that we we reviewed, they all have substantially higher expectations of the experience that digital experience that they would, they would expect with any any organization though, since the pandemic began. So I think you’re starting to see a real fundamental change in society. It was already there. I think it’s just been accelerated now. Lisa Hochgraf 16:20 I have to confess, I’m a credit union industry editor, and it wasn’t until the pandemic that I fully embraced mobile deposit. So, I think there’s all kinds of people that were on the fence and then got pushed into digital and then said, like me with mobile deposit, “This is awesome. Why did I do this sooner? This is great.” So, there are some new payment options coming along, like subscription models and buy now, pay later. Tell me a little bit more about how that fits into this picture. Harry Singh 16:51 Yeah, happy to. I mean, you know, I think I think we’re starting to see the adoption, I think, probably more the adoption of buying IP later, globally. You know, not just in North America. I think we’re seeing that being fairly pervasive everywhere we are. You know, and I think I think that’s really looking at a couple of things. One is affordability of a consumer, you know, I might not have the funds today, and therefore, you know, can I, can I future-date my payment? That requires a very different model around how you assess customers for risk, requires a very different model about how you continually assess customers for risk, and make sure that it’s affordable, and make sure it’s a sustainable payment that they’re going to get. I think utilizing both traditional, nontraditional data helps you get to a better and healthier level of propensity around, you know, how those consumers are going to behave. So I think, I think that model is here to stay. I think it will be regulated, is an opinion that I have personally, quite, you know, quite quite substantially, depending on what region you’re in, you know, globally, but I think buy now, pay later is here to stay. I think it will manifest itself. But what’s really interesting about it is most of the organizations that we work with the you know, they use our data, they use our analytics, then they use our software to make those decisions because they really want to leverage the power of advanced analytics and nontraditional data. I think we look at subscription models. You know, one area that we’re seeing a lot of interest in is in vehicle and auto. The world is changing. The, you know, the world is evolving. We’re seeing electric vehicle purchases go up. We’re seeing auto leases go up over time. And now the natural transition, you know, depending on if you believe some of the industry leaders or not in this space will be that as you start to evolve, you know, individuals and households will probably subscribe to cars. If you live in a village, depending on the climate that you live in, you might have quite severe winters and quite dry summers. Do you need a very different vehicle, for example, in the summer than you do in the winter? Probably. And therefore subscription models you know across industries will be quite interesting for us. That requires constant evaluation of data, constant evaluation of affordability and consumer need. You know, there’s there’s a component that says is that risky is that a risky one but but essentially the product that you’re building and creating needs to understand the needs of the consumer. And I think subscription models, you know, really do bring that to life and you know, the use of advanced analytics, real-time decisioning is important in that space. If we look at some of the data points that support that, I think just under a third of consumers that we, we spoke, I think it’s about 27% reported that they have purchased products using buy now, pay later. That’s, that’s huge. That’s material. You go to most online retailers, you know, there’s always one if not multiple, buy now, pay later programs that you can, you can access. I think businesses need to and will have to adopt this type of a payment capability. I think that’s, that’s becoming apparent. And just having purely self-serve digital strategy probably isn’t enough anymore. It needs to be the experience. Do you understand the consumer? Do you understand their needs? Are you, you know, are you lending them money? Or are you providing an outcome for example? Those are two very different things. And actually, more and more consumers want to be understood, their needs. And the, you know, they they expect a fair value exchange of their, for their data, for example, for an outcome, and a service that really helps them with a job to be done or an outcome that they wish to achieve. Lisa Hochgraf 20:24 So, a couple of times during the show, we’ve talked about traditional and nontraditional metrics and data to help credit unions with decisions. Would you talk a little bit more about what you’re thinking about when you refer to the nontraditional data? Harry Singh 20:38 Yeah. I think I mean, depending on where you are globally, and depending on regulation and legislation, we’re seeing, you know, traditional data sources, such as credit bureau, you know, we that, you know, that’s our, that’s what we do as an organization, as a business. But we, you know, growing, growing analytical models, or utilizing alternative data, such as social media data in certain markets around the world. They’re using location data for personalized offers. And, you know, as that starts to evolve, and especially now with the pandemic, some of the analytical models that, that were there before aren’t really reflective of the behavior of, of society. An example being, you know, how do I know the affordability of my portfolio. You know, is today as reflective as it was 12 months ago? It isn’t. Everybody’s been in a position where they’ve either taken a payment holiday or they pay down their credit. Now, that’s good. You’re right. That’s, that’s fantastic for certain segments of society. At the same time, that two-lane economy that we’ve been talking about, the people who are, you know, fiscally disadvantaged, what, how do you understand their profile, their affordability, how they’re going to behave going forward? How do I know how to reserve against that, if I’m a lender? You know, what might have what was my balance sheet implications of it? Now, this is where you can utilize potentially things like synthetic data that allow you to generate artificial data, machine-generated data that you can put into your models. And then as your as your portfolio starts to evolve, the number of models that you’re assessing, you start to align those models against the behavior of your portfolio. You start to get to a predictive level of understanding of consumers, their behavior, their affordability, you know, what they’re likely to do, what they’re likely to need. And, and that really changes the dynamic. I think, with machine learning, the ability to use large data environments and, and really utilize those models in a real-time manner, you know, if you think about the convergence of data, software and analytics, data, we understand that various types of data analytics, the ability to, to make sense of all of that various data, but then what do you do with it? And that’s where, you know, software, decisioning software, for example, having that ability to real-time execute those models, test them understand them, means that you will have a better understanding, and a real-time way of your customers and their needs. And therefore, you can go product, services, outcomes that really resonate and service the needs of your portfolio, rather than just thinking about it purely from a prudential perspective. Lisa Hochgraf 23:13 Excellent perspective. And forward thinking, my next question is about forward-thinking. But I feel like you’re already leading up to that. So you’ve been doing research, and you’ve been looking at the payments landscape and the current landscape. What is the next question on the horizon? What’s the next thing that you think you’ll be researching? And what’s your prediction for how the answer might impact credit unions? Harry Singh 23:37 Yeah, it’s a good, it’s a good question. We could, we could, we could spend all day on this, Lisa, to be honest. I think, you know, there’s a couple there’s a couple of there’s a couple of areas there. You know, if I think about, you know, the the landscape that we certainly that we certainly support our clients and, and consumers, then, you know, we’re actively thinking about that buy now, pay later piece, but then what are the transition in payment behavior? We’re seeing crypto on the increase. What does that mean? We’re seeing greater adoption of crypto as well as a payment model. Now, you know, legislation and regulation may hinder and slow down the progress of, of such payment technology. But we’re seeing, you know, countries now recognize it as an underlying digital currency. What does that mean? How will people pay? You know, how do you how do you assess the authentication of that currency? There’s a there’s going to be a whole bunch of jobs to be done, questions to be answered. And that has a material impact on society because the type of people who currently today utilize cryptocurrency aren’t representative of society more generically. So, you know, how do you understand who those people are, how they’re going to behave? I think the subscription piece that we talked about is fundamental. I think, you know, we talked a little bit about auto. I think as we evolve and go forwards, the need to constantly understand consumers, to have a fair exchange of data, you know, consumers have shown and and regularly shown that they’re happy to exchange data for a fair exchange. To understand their needs, for example, and then give them personalized offers, I think it will become an area of exploration. I think subscription, not just in auto but in everyday life. You know, you’re already seeing it, we’re already seeing, do I subscribe to certain services from my house for a period of time? Do I subscribe to where I live? Do I subscribe to different types of energy providers? These are all going to be things that I think as you go forward will require real-time, large-scale analytics, advanced analytical capability, and real-time decisioning and execution of those models and understanding of consumer behavior. So like I say, subscriptions, absolutely there. Cryptocurrency and payments technology and how that’s going to evolve. And I do think there’s going to be a change in behavior more broadly about lending. I think, I think, I think, you know, we’re gonna see different types of organizations enter into, you know, what would be traditionally classified as credit lending, not just banks and fintechs. But you might start seeing, you know, larger software businesses entering. You know, some of the big organizations globally are thinking about how do they how do they play in this part, how do they play in this space. So there’s a there’s a lot of areas we’re gonna explore but I think the payments cryptocurrency, script subscription, and the changing and the changing behavior of, of payments are probably going to be the three areas. Lisa Hochgraf 26:25 That’s fascinating. This has been so informative Harry. Thank you so much for being on the show. Harry Singh 26:30 Thanks for having me, Lisa. It’s been it’s been really informative for me. Hopefully, it’s been informative and thought-provoking for the listeners. And, you know, I’ve hopefully intrigued some people to think differently about the practices that they’ve got and and what they have to think through as they go forward. Lisa Hochgraf 26:50 Thank you so much for taking time out of your day to listen to the CUES Podcast. And thanks to Harry for being our guest. I hope you got lots of good ideas you can use. You can check out the Experian website at experian.com. If you’d like information about how to become a CUESolutions provider, please email Kari at kari@cues.org that’s k-a-r-i at cues dot org. Find the show notes for this podcast and a full transcript when you visit CUmanagement.com/podcast120. There’s lots of other credit union-specific content on cumanagement.com as well. I hope you’ll check it out. If you’re a CUES member, you have access to invaluable membership benefits to further enhance your development, many of which are available virtually. Visit cues.org/membership to learn more. Thanks again for listening today. CUES is an international credit union association. Our mission is to educate and develop credit union CEOs, executives, directors and future leaders. To learn how CUES can help you realize your potential, visit cues.org today.