10 things we learned from our digital banking journey

Two banks discuss their journey: American Commerce Bank, N.A. digital bank launch and how Members 1st FCU took control of its digital future.

Learning Objectives:
1.Knowing what questions to ask makes all the difference
2. Just because a fintech says I do doesn't mean that they can
3. Your urgency doesn't change your place in line

Transcript:

Bob Koncerak (00:05):

Do you know how many versions of driver's licenses there are in the US do you think in the state of Georgia? Do you think everybody's driver's license looks like this? The answer is no. So if you're using a vanilla online account opening document and you're supposed to be able to delight your customer, just take a picture of your driver's license and upload it because it'll pre-populate all these fields and it's going to be fancy and your customer will be delighted. Well, that sounds really good, but the fourth time that the customer tries to take the picture and load the fricking picture and the customer isn't delighted, the customer is ready to throw your, so the things that you think are intuitive aren't necessarily intuitive. So testing in the sandbox environment over and over and over again before something goes live. The things that you learn by going through the experience are probably a whole lot different than what you can imagine. But that's why I wrote that thing because there's so many findings in there that are lessons that things we'd rather not have known.

Miriam Cross (01:15):

Are there a question you're really glad you asked, or one you wish you'd asked.

Bob Koncerak (01:23):

That's yours. I talked enough.

Mark Coleman (01:24):

Yeah, I wasn't sure you were looking at, so for me, the questions that brother ask us a little bit of the actual partner themselves because understanding about what they can do well, what they can't do well, also looking at referrals, seeing who other credit unions that might've used the service. Also understanding what went well with them. But the part that I think is really critical is that you can ask so much of your partners out there, but if you don't ask questions internally as well, that's also a thing that's going to cause a lot of problems. If you don't have internal alignment around what it means between all of your various stakeholders and business units, you're also going to be set up for failure because someone's not going to be engaged, someone's going to have a different assumption put in place, and even though this might be perfect, there's chaos internally and it causes everything also to fall apart from a different angle. So that's kind of, for me, it's like the internal alignment of what are we trying to solve? What's the actual problem we're trying to solve versus, oh, here's a nice solution, let's do this. That might be great, but if you don't understand the problem internally and everyone understands that it's going to be a problem.

Miriam Cross (02:30):

And this isn't on the list, but Mark, when I asked you for your thoughts about what was resonating with you, one thing you said was that financial institutions need to move from a project mindset to a product mindset. What do you mean by that?

Mark Coleman (02:42):

So of course, huge bias on product engineering for this, but working with credit unions for 20 years now out of college, there is always the typical aspect of projects. We have projects, we've enter size, price projects. We have a defined start and it'll end eventually once it ends, the project team vanishes and then someone has to work on making it operational and keep it going. If you just apply it like that, that project will be done. It'll be operational, but it'll wither on the vine and die over time. And then maybe a leadership changes in the organization. They think, well, why isn't this system working like we should? Well, you probably didn't devote any resources for it for five years. Of course it's not going to go very well. So that's why I'm trying to help change some of the fuse members. First, be more product mindset.

(03:42)

What are our products that we actually deliver to that we build or maybe partner with? Digital banking, new account opening, lOS systems, the core financial system. Those are things that will always exist internally. If they stop existing, chances are the industry has changed or maybe your organization collapsed, hopefully not, but that means they don't exist anymore. So devoting product ownership, having teams devoted to that, maybe partner with staff augmentation, maybe your partner, maybe internal resources ensures that that gets the proper attention needs, has a vision, has a roadmap, has a strategy behind everything, and you're delivering stuff that your associates, your employees, customers, and members actually want and need. So changing that, once again, technology I view is incredibly easy. You can plug anything together and get it done, but changing the view of organization takes many, many years and you will eventually get there if you commit to it.

Miriam Cross (04:39):

Bob, how do you feel about this project versus product mindset?

Bob Koncerak (04:45):

I've worked for half a dozen banks in the last 20 years, and I think all of the bankers and credit union folks here will recognize this statement. Bankers are really good at being reactive. When somebody walks into one of our lobbies or calls one of our help desks, we're really good at reacting to their request. But as I've heard from a couple of speakers already, okay, the big banks are getting an outside share of new clients and all of a sudden fintechs are taking all of our customers away and the whole next generation is going to go do something in crypto and who's going to bank with me? Well, people last time I checked are still people. They appreciate outreach, they appreciate being valued, they appreciate being asked, Hey, is everything okay? Can I do anything else for you? At least in the remaining expected useful life that I've got in banking, I'm satisfied that's going to work. And so I think that rather than trying to get too slick and make it too complicated, if we become more proactive and just make sure we're taking care of the customers we have. If it's true in several of these sessions that I've seen, 25% of new accounts are open because of referrals. Okay, we'll be fine.

Miriam Cross (06:04):

And Mark, another thing you said when we were preparing was that fintechs need to be your biggest champion. What's been your experience in this regard?

Mark Coleman (06:12):

It depends. It depends. That's the thing. Depends. I've worked with many fintechs over the years, many different partners of various of dinosaurs or you might say, or the nimble new startups.

Bob Koncerak (06:23):

My apologies to the Jack Henry, you're fantastic dinosaurs,

Mark Coleman (06:30):

But there's ones that we work with where once that project is done, they go away. Maybe we'll talk to their customer success manager, maybe quarterly, maybe we have to, don't talk to them at all. We have to try. Our procurement office has to reach out and be like, who's the most recent person we can contact in case of an issue? And it might be silence. Those are the partners that need to go away. They're not valuing your actual relationship together. But then we have some that are startups. They're nimble, they're very scrappy, and where members first ends and the FinTech starts is so gray where it's kind of there an extension of our team. They're an augmentation team. They're giving stuff back to the credit union about use cases, potential scenarios, understanding how we deliver service to our membership, what our some smart technology needs might be.

(07:26)

And there's times where they even change their platform around to because they see a niche there for us, and they truly are the partners we want because they want to enable us. They want to make us better because if they make us better inherently we're going to say really good things about them and kind of tout them off to everyone, volunteer our time that speak at anything that might say because we're so excited to have that relationship put together. Those are the partners we need. Not everyone does that, and that's the thing that if you're big or small in terms of a credit union or a bank, that still should exist because it needs to happen.

Bob Koncerak (08:02):

I like when you brought that up in the pre-planning because there are a fair number of FinTech sales folks represented here, and all of you are looking for the way you can get a bank to say yes. How do you take a little stodgy bank and get them to say, yes, I choose. You all are looking to do that. Well here, and I'll use the same analogy I did about the third party technology contracts with CSRs and lenders stacked on top. If you want me to choose you for some critical part of my business that I'm looking to grow and make me relevant into the future, are you profitable? What's the tenor of your executive team?

(08:55)

How and why should I rely? What's your reputation? If I call Charlie Potts at the ICBA, what's he going to say about you? If I talk to my sales folks at Jack Henry, are they going to smile or are they going to turn away? That's hugely important because you're asking me to rely on you and to strap you into something where yes, I've got customers as a constituency. Yes, I've got a board as a constituency, I also have regulators as a constituency. You all know that it's hard to get a bank to change anything, and people wonder why that is. That's because every single process in a bank is reviewed by an internal auditor. Every single process is reviewed by a regulator is subject to examination and question. And so to get banks to change processes, even for something that looks a whole lot better, there's a reason why it takes so much. And so for me to be convinced to choose a new FinTech company, especially something that looks fantastic, but yet doesn't have many customers who are live and mapped to the core and can give me real operating experience because they've been using this vendor for a while. I'm sorry. That's hard.

Miriam Cross (10:22):

We have two minutes left. Does anybody have any questions?

Bob Koncerak (10:26):

Can I, yes. Richard's sitting there videoing me, so I'm going to get a chance to watch this later. What did we say that you would add to Richard Rotondo is our branch manager for digital.

Audience Member (10:36):

Well, you talked about questions. Questions to ask. What I found in the process, there was a huge difference between talking to the tech provider and they say, yeah, we can do that. But the question really was is have you done, the next question is going to be with whom and where's contact? And that's where a lot of disconnect occurred. I've vetted, I think seven companies from my front end account opening portal, and a lot of them have great demos, great technology, but again, when you asked who had you done this for? And they double, right? My answer was, I can't be your test kit. I got too much on the line and I'm sorry. And I don't think I'm different from a lot of banks out there. Nobody wants to be customer number one. Nobody That may be unfair, but we had a stake and a lot of money and all kinds of stuff involved. So that was one of the big takeaways early on, approved to actually find the right partner.

Miriam Cross (11:56):

Somebody has to be customer number one though, right?

Bob Koncerak (11:58):

They do. They do. But here's what I'd say about that point also is my deposit ops manager has a day job. My CIO has a day job, okay? When you drop this on their heads and say, we're going to go do this too. It's one thing if it's done in three months and it's live and running, it's another thing if you're six, seven months into it and you're still talking to the developers because they're putting together code they told you that existed to begin with, they've got a day job. And so the recognition of this is why we can do this for you and get it done in the timeframe that we've scoped out is huge. That's a good point, Richard.

Miriam Cross (12:36):

That's all we have time for, but Bob, if people want to read your entire list of 10 lessons, how can they do that? Is it as easy as adding you on LinkedIn? Oh,

Bob Koncerak (12:44):

Yes, it is. Thank you.

Miriam Cross (12:47):

Thank you very much.

Bob Koncerak (12:48):

I've received some good feedback from it, so I hope it's valuable to people. And thank you for mentioning it.

Miriam Cross (12:52):

Thank you very much.