OLYMPIA, Wash.—Credit unions have a reputation as early adopters of new technologies, but developing and implementing in-house grass root inventive ideas has been more vexing.
"A challenge in the credit union industry is that we want to be innovative, but we can't break out of the mold to be perfect," said Ben Morales, senior vice president at Washington State Employees Credit Union.
With 32 employees in its technology department, the $2 billion-asset WSECU has the ability and resources to affect change from within, but Morales concedes that an outside partner is needed to achieve goals. "We have the talent but not the execution," he noted.
When Morales learned that John Best had recently launched the consulting firm Best Innovation Group (BIG), he wanted to work with him. Best was previously SVP and chief technology officer at Wescom Resources Group (WRG).
"John's been known in this industry for a long time-he's a known entity," said Morales. "And we use WRG products."
As a credit union industry veteran, Best has always sought ways to enhance technology platforms. Most recently, he sat on the governing board of the Credit Union Financial Exchange (CUFX).
The organization's goal is to develop vendor agnostic standards for the credit union industry, which in turn would make product and service integration easier and less expensive.
A Catalyst For Going BIG
"CUFX was a catalyst for BIG. There was a lot of industry involvement," said Best. "The credit union industry is a victim of a fractured market. I've been consulting for a long time in this environment and I feel like there is so much opportunity now."
Best explained that there is no shortage of great ideas emerging from credit union IT departments across the nation. The problem is that innovation strategies are expensive and often hard to navigate.
"Innovation requires an open-minded culture that is often difficult for credit unions to embrace due to boards with less familiarity in technology and a less than favorable regulatory environment," noted Best. "It also requires expertise in the art form of ideation. The process of gathering, developing and communicating ideas can be difficult inside an organization built on operational discipline."
Another innovation issue is accepting failure, which Morales agreed is a continual stumbling block.
"Innovation requires a high tolerance for risk and failure. A common barrier to providing state of the art consumer technology is that innovation groups are often difficult for credit unions to fund," said Best. "Good innovators understand that failing fast and pivoting from the failure is a crucial part of the innovation process, however most credit unions will struggle with multiple failures."
Moving Quick
While a young company, BIG counts CU Wallet, WRG and WSECU as clients. For the latter, Best and his team will work with Morales to identify innovative ideas and determine quickly if they should be brought to fruition via a piloting program.
"BIG is going to help quickly get to the piloting phase," said Morales. "We want to quickly know whether we are going to kill it, shelf it or implement it. We are cranking the innovation engine and BIG is going to be our facilitator."
Morales' intent is to bring the first innovative ideas to piloting by mid-to-late summer. Teams of three or four WSECU employees from varied departments will receive funds and resources to determine if their innovations are worthwhile.
"We want the people with these ideas making decisions and setting parameters, such as how much money to spend and the time line. We expect this process to take 90 to 120 days-no more," said Morales. "And whether it is then approved depends on ROI and employee and member feedback."
A subscription to BIG (www.big-cu.com) requires an annual fee of $500. Members will have access to technology prototypes, software code, white papers and newsletters, among other things.
"We really want to excite developers," said Best. "We want to unlock the ultimate member experience by finding the most innovative technology and applying it to the right channels. Creating unique business partnerships with up-and-coming companies that will be leaders in these new spaces, and attracting top talent to be the next generation of technology professionals at its member credit unions."
As Morales looks forward, he predicts this new partnership will soon bring new member-facing technologies to WSECU.
"2014 is a wide open door for innovation," he said. "We [as an industry] can no longer get stuck in the Mensa mindset. We need to take the best ideas and implement them and not be afraid to fail."
