Transcript
Hi, Mary Wisniewski here, Cornerstone Advisors editor-at-large and host of Money Isn’t Everything.
Today on the show, I speak with Ben Maxim, who is chief operating officer at the Reseda Group, and he’s also the chief innovation officer at MSUFCU.
In September, I joined Ben in Detroit, Michigan, for the Reseda Summit, which showcased a bunch of cool product demos from outside companies that are designed to help credit unions refine their products and services.
In our conversation, we chat about what gets missed in financial education, what a tech-led branch looks like, and, frankly, existentialism.
Here’s our conversation.
Ben, welcome to the show. Welcome to Money Isn’t Everything.
Hey, yeah. Thanks for having me on.
I know. I just had to follow you along because we were just in Michigan recently together, and I’m like, so here we are.
Congratulations on the Reseda Summit, a bunch of your promising technology and technology you’re already piloting in different ways.
I thought, how cool would it be to sort of do the gossip of what happened right at the event?
Exactly.
Cool.
One of the things that I was struck by, and I’ll let listeners know I was emceeing, so I was a little bit like, woo, the whole time, but one of the things I was struck by was there seemed to be a recognition by all kinds of folks there, either the credit union or the startup side, of what is value in a financial product.
One, it’s changing.
It seems to be like yesteryear’s was, “Hey, we’ll make it hard to leave this account, and that’s how we have a sticky customer.”
But at the Reseda Summit, it was showcasing a lot of different interesting things, such as, “Hey, this is how you get a discount at the local small business,” or, “Here’s some confetti to celebrate your paying down debt.”
There were just all kinds of things.
But I’m curious, Ben, I know this is a huge question to start us off with, but let’s just get into it.
Let’s get into the existential question the whole industry is up against and has been for a long time.
How are you seeing, what is value today, from, well, let’s take it from the credit union perspective?
Yeah, absolutely.
I think in general, we’re all acknowledging that people have multiple relationships.
There’s this misnomer that we’re all fighting for top of wallet, being the primary financial institution.
Yes, wallet is important.
We also need to figure out how we carve out our slice of the pie, if you will.
I think the average Millennial and Gen Z customer has anywhere from seven to 20 fintech relationships, and those fintech apps are now considered to be, they don’t think of it as a bank or an institution or credit union.
It’s just this app on my phone, and iOS or Android is really organizing all the things for people.
How do you get that mindshare and experience?
It’s by giving people more to do with a credit union than just check your balance and move some money around every so often, and some of the not-so-fun things like paying bills and watching that money trickle out of the account.
By giving them these experiences where they can save money, or get more use out of their money, or understand how their money is flowing, it really is how you find that engagement with your members.
We’ve always been, as credit unions, relationship-driven businesses, really focused on that personalized service.
A lot of that was done in person in the branch for many years.
Those people who used to come in the branch every Friday to deposit their paycheck, they’re no longer coming in every Friday.
Maybe they’re coming in four times a year, maybe once every four years.
So how do you engage with them in between?
By adding these services onto what we offer and using these fintech partnerships to do these things that you may not always think of when you’re thinking of a credit union mobile app or digital experience, we’re able to engage with them and have conversations with them in a different way, like we used to when they were in the branch all the time.
Because that person they used to get to know would get to know them, and they’d be like, “Oh, how’s your mom? You’re retiring. Your kids are going to go to college.”
We’d be able to offer them products and services.
We’re having those same conversations thanks to these fintech partners now.
How do you, I mean, there are a lot of different ways to put on an add-on service, but when you’re thinking about, “Hey, I want to try this out. This might be particularly alluring to this segment of the population in some way,” what catches your eye?
What is catching your eye right now as you think, “Oh, this really could woo people, woo members”?
Yeah, absolutely.
Right now, we’ve all spent the past year trying to figure out how to steal all these deposits from each other.
What’s going to win?
There are people that are very much looking for rates.
There are generations of people that never got more than 0.025, whatever, 0.25% on a savings account.
So they thought, okay, well, why move my money to a credit union? Why move it to a bank?
I can just leave it in Chime or Venmo or Starbucks, for all that matters, because I’m not earning anything on it anyway.
Now people are actually able to make some income on dividends from having even small amounts of money in a savings account.
Looking at, again, these ancillary benefits to get people to choose our savings account, checking account, to really be their transactional focus and really be who they interact with and think of us as the enabler of the different things they’re trying to accomplish in their life.
One of the companies, they weren’t showcased at the summit, but maybe in future years depending on how our relationship goes, we’re going to kick them off at MSUFCU in our innovation lab, is a company called Wish, which is a micro life insurance company.
Really with the thought that a lot of people, especially on the lower end of the income spectrum, are not able to afford life insurance.
It’s not really a product that is first top of mind for them to want to add to their own personal budget.
As an institution, Wish gives you the opportunity to offer life insurance that kind of matches the amount they have on deposit.
Have $100 on deposit, they have an equivalent amount of life insurance.
That is something that may be making life insurance more accessible to people that would not have been able to buy it.
Then, as they are able to grow and have some stability with their finances, they’re able to move into some of the traditional life insurance products.
That’s one that’s really exciting.
Then on the more technology side, there’s a lot going on in the AI space as well.
Not just for conversational AI.
We had our keynote speaker at the summit talking about how do you interact in this conversational AI space, what does that look like, especially with ChatGPT and other generative AI solutions out there?
But also, how do you leverage that for personalization, to fight fraud?
I don’t think you can talk to most fintechs these days without them trying to figure out how to say the word “GenAI” at any point.
Okay, Ben.
Actually, I saw Wish at a trade show, and I would say another thing striking about it is, this will sound shallow, but I didn’t think it was, the branding.
The branding is really colorful and pretty.
So when you walk around...
Branding, absolutely.
It’s very appealing.
Yeah. It stands out just for that alone.
But I did want to, you know, one of the more provocative things that was said during the Debbie demo...
I know where you’re going.
Yeah, I know. I had to go there because I’m also like, this is something I think about a lot.
But Frida, the founder of Debbie, said financial literacy is BS.
I’m curious how you think about that.
For the audience’s sake, it was a comment about how financial literacy has effectively not done much up to date, was sort of the broader argument.
But Ben, how do you think about that?
Yeah. No, it was actually a really interesting time for her to say that, knowing that there were quite a few financial wellness or financial education companies following them later that day.
It seemed to be taken maybe somewhat personally, or as a challenge in that moment.
So I’m glad I have the opportunity to maybe share my thoughts on this.
Thank you.
Really, it was meant in a way to say, as Debbie focuses on the behavioral aspects and making it more than just talking about it, but giving people the tools to action and do it.
I would say the other companies in our portfolio do the same thing as well.
It’s not just, yep, okay, you shouldn’t spend more than you have coming in.
Okay, great, financial literacy.
Or, this is how a checking account works. This is how a credit card works.
To some extent, that’s what maybe some people think of in financial literacy.
It’s really just statements that don’t really help someone that doesn’t know what to do with that information.
By giving people the tools and resources to make it actionable and personal to them, it really is an opportunity for them to have an experience where they can learn what’s going on with their finances and become stronger.
Really, this empowered person to be able to take charge of the situation and not feel like it’s just overwhelming and people are talking at me, over me.
The tools within the Reseda portfolio, including Debbie, do just that.
They’re able to provide people different viewpoints, different vantage points, different perspectives on how they can do it, and they can give them the motivation.
Debbie focuses on doing that through gamification.
Others do that through connections to different actionable app providers.
They connect back to financial institutions to give them the tools, not just talk about it, but say, “Hey, this thing we’re just telling you about, you can do this with MSUFCU right now. Would you like us to help you open that account or start opening that product?”
Really just help get them the tools and resources they need.
So yes, at its core, financial literacy is BS when you don’t let people do anything with it.
Hopefully, we can say that on your show.
Absolutely. We can say anything on the show.
I should have maybe checked that.
But yes, great.
I was hoping.
I think it is to an extent, but within that context, it is actually probably one of the key differentiators between financial institutions today.
We all have the same kind of commoditized products.
But the more you can help people understand how to interact with their money and how to interact with different financial products, because many people don’t have home economics or, there was a class, I forgot what it was called, like personal finance or something, in high school where you could take that as your math class.
They taught you to write a check and how to balance a family budget and different things like that.
You had to buy your groceries.
We took a field trip to the grocery store one day and we had $100 to see what...
That kind of stuff isn’t actually happening in high schools now.
I think some of it is now coming back, now that there’s the requirement for financial literacy to graduate again.
We have our own financial literacy platform within Reseda as well, Evergreen.
We do tell people what to do, and we need some of these other solutions to help people make that actionable.
The kind of approach we’ve taken with the Evergreen platform was to have people who are living those situations be the content providers.
A lot of that content was originally created by college students to talk about the experience learning about money through their experience going through four years at Michigan State, or however many years it takes to graduate.
It really was tailored to that experience.
It wasn’t necessarily, “Hey, I’m a banker. I’m telling you how to use a checking account.”
All these different solutions have that angle to them.
Yeah, and I think that’s really important, what you just said, because it’s also tone.
It’s easy to be demeaning on accident.
But typical banker or executive, I mean, you’re going to be getting regular paychecks.
It’s not going to be this surprise number that’s hitting your paycheck.
I feel like that’s where some of these budgeting tools can get confusing between the creator and the user.
Absolutely.
Especially when you’re seeing a shift towards an entire generation of people who are doing a lot of gig economy work.
They have maybe what equates to what you think of as a pretty reasonable income, but it’s not treated that way.
They don’t have the same kind of cash flow experience.
Maybe one day they bring in a lot of money, and then it goes sparse for a couple weeks.
Being able to manage in that situation is a lot different than, well, when you get your paycheck every other week, then you put this much toward your savings and this much toward your investments.
It really is an opportunity to meet people where they are as well.
Yeah, and I think that’s a perfect segue to another theme that came up a lot.
It’s something that comes up a lot at any credit union type of event, which is, we need younger members.
That’s just a big challenge.
I know you’re working with multiple fintech companies that are geared at Gen Z, plus you have that university perspective as well.
But short-form video was one thing that was coming up during some of the demos, and I think that’s such an important thing to try.
I would say execution seems to be a little bit harder from a lot of the bank or credit union side when I’m thinking about TikTok or something like that.
But I’m curious how you’re thinking about short-form video content or maybe going on TikTok.
Does a credit union stand a chance at going viral?
Yeah, absolutely.
Interesting timing for the question.
In addition to the time spent at the Reseda Summit last week, we also participated in the lab at Filene, and one of the experiments that they want to take on is just that.
How do we figure out how to be finfluencers, right?
How can you leverage finfluencers in the credit union space?
A lot of the discussion that day is maybe where I’ll focus my response here, is really geared toward, oh, well, I’m going to go find this person that has this massive following and get them to talk about credit unions.
Then some of the worry is, oh, well, do they have a national audience?
But we’re hyperlocal, a lot of credit unions, so how is that going to help us?
I think it’s almost like you’ve got to flip the paradigm and really find people who are the hyperlocal people who you can then get to talk about financial services in a meaningful way.
Or you can create those people, help them create that brand, and really focus on creating their followership versus going the other way and finding someone who’s already got an established brand.
Yes, that’s great. Sure, you can get access to a bunch of people quickly.
But I think where we as credit unions can really leverage the short-form video is to find people who are going to talk about it.
What we’re experimenting with at Michigan State University Federal Credit Union is, we have the university.
We have some athletes that we have NIL, name, image, and likeness deals with.
We have a program called Women in Sparta.
We picked, I don’t know how many student athletes, women student athletes, from the various teams.
I think it might be about 20, 10 or 20, somewhere in there, from across the board.
What we do is we ask them to promote what we’re doing and almost treat it as though they’re quasi interns in the financial education space.
Talking about and leveraging, a lot of them have significant followership within the Michigan State community.
But then we’re also able to teach them the things about financial education because we’re teaching them as part of the program.
Then they’re able to turn around and teach their followers, who very much look up to them.
They come to our events. They bring people in to help us be able to then do some of that financial education and get access to financial literacy information as well.
So, not just thinking about it like you think about, oh, I’m going to use this makeup because I saw this person use this makeup.
It’s, “Hey, here’s this person that I respect in the community. They’re actually talking to me about how they can use this financial product I would have not known about or known there’s a difference.”
Some of where credit unions struggle is getting people to try a credit union.
I think a lot of us have this experience where once someone tries a credit union, people love it.
They move all their accounts over. They move all their products.
But it’s giving a credit union a chance and thinking, well, why are you any different than Bank of America or Chase, or even any different than Chime or Venmo or any of the other apps that are out there?
So I think it is something that we have to do, some of these things like figure out short-form videos to get people to give us a try.
Yeah.
I think that opens up an interesting opportunity too because, of course, on TikTok it’s a lot about buy, buy, buy, buy.
Even though we’re talking about a product here in financial services, it’s more geared toward saving or a long-term planning type of thing, whereas the outfit of the day isn’t that.
Also, this just happened in recent weeks where the viral thing hit about Chase, the “hack,” I’m air quoting, a hack was like double dipping the check.
Great.
I think there’s also an opportunity just to create content that’s accurate and won’t result in a record if you follow it.
Yes, promoting fraud just because you didn’t know that it was fraud.
So yes, at a base level, this may be where financial literacy is maybe less BS and there is some baseline information people do need to know.
Because the Chase thing, it’s what we used to talk about when I went through fraud training, about basically being check kiting.
You’re probably not learning what that is watching anything on TikTok.
So how do you learn about that?
How do you learn about that?
There was an interesting company, remind me of the name, but it billed itself as like the NerdWallet for credit unions.
Oh yeah, that was Nickels.
Nickels, yes.
I think that’s interesting too because you just mentioned how to resonate with someone that is a credit union and explain your mission.
But also, step one is find it, right?
Exactly.
I think that’s a really interesting notion.
I will say, I had worked at Bankrate, and one of the things that becomes really hard to find for some institutions is the rates they offer are really buried.
It’s still a manual process.
But I’m curious, this is slightly dated information from my experience, but is this still a manual process at times to find out, “Hey, this account pays X,” or, “There are this many fees”?
You kind of have to disclosure hop.
Oh no, absolutely.
I think that’s why Nickels is focusing on surfacing that, and then working with the partners to really get, here are all the different components of it.
Because yes, there may be a way to figure out maybe what the rate is, but then again, it depends on your credit score.
It’s very hard to find maybe your particular one.
They actually go through the process of doing a soft credit pull, and then they actually know what your actual rate will be because they partner to get those rates.
They’re not able to pull your rate if you have X credit score from maybe some of the bigger cards.
But that’s where they rely on user input because they’re saying, “Hey, you have a Capital One card. You have a Bank of America card. It’s typically this rate. What is your rate?” if you want to do it in a comparison calculator as well.
But then they also do a good job of adding up, here are all the percentages for the rewards, here’s the annual fee, things that you maybe don’t take into account that may be costing you money.
Or you’re not really getting an apples-to-apples comparison when you’re comparing it to a card that maybe just has straight cash back or doesn’t have an annual fee.
Some of that kind of gets lost.
A lot of what Nickels has talked about is people get distracted by all those different rewards and offers, and they don’t necessarily understand the cost that goes into funding those rewards because there typically are annual fees or higher interest rates.
Whereas it may be exciting to get a bunch of airline points or hotel points or whatever it is, or merchandise, you may actually be able to afford to buy that yourself if you use a different card.
Credit unions are capped at interest rates.
You’re getting rewards on a 30% card versus getting no or getting a cheaper interest rate on a, I think we’re capped at 16.9 or 18.9, or whatever it is now.
But that’s a 12% difference for every dollar that’s on the card.
Think about how much you could then spend.
They’re trying to highlight some of that stuff that maybe you don’t think about, and maybe what’s out there in marketing for cards is very much leading with that rewards portion.
Yeah, no, that’s really cool.
Because also, you start thinking about, this would be more true of just debit cards, but I know some people go wrong because they want this certain product, but then they have to pay fees for ATMs and they happen to be someone who wants to take out cash all the time.
It’s like, well, you just undid anything you thought you were getting.
Exactly.
Back to the short-form video, I think there are endless TikTokers or bloggers that over the years have been like, you use this card for this, and you layer this one in here, and you build all...
Yeah.
Right.
He’s one. I read all his stuff as well to try to maximize my own points.
It’s quite the game.
I know. Some people have like 22 credit cards, and I’m like, wow.
Yeah. That is bold.
No, it’s too much.
I have consolidated it all back to my MSUFCU card just to make it a little easier.
A little easier.
Cool.
Ben, you’ve mentioned the branch and we’ve talked about younger people, but also something that came up through your demoer, Silver, is this need for also designing better experiences and products for older adults too.
This is sort of a two-parter.
One, what do you think is still missing in the digital banking experience for older adults?
Two, no, I’ll get to two when we get to two.
Let’s start there.
Okay. Let’s start with one.
All right, sounds good.
I think Silver actually ended up being one of our early adds to the portfolio and an early experiment in the lab, really for the fact that most credit unions do have a majority of their membership that are over the age of 50.
Quite honestly, most of our actual depositors and all our assets are tied up with that group.
If we’re going to keep and retain the money to help attract the next generation, we do actually have to earn money, earn revenue, and that’s the group that affords us to be able to do so.
Quite often, many of them have been with the credit union for 20, 30, 40 years, depending how early they opened up their account.
Being able to provide solutions to help them, there are so many financial decisions that happen at different stages in life.
We’re really good at like, oh, you’re going to buy your first car, you got your first job, you’re buying a house.
We’re really good at credit unions to help you through those stages.
But it’s like, oh, then you have to make these massive decisions like, if you pick Medicare, and if you get one time to try it without having to do a health exam.
If you want to switch later, then you have to go through a health examination.
That actually could be a costly mistake because you may have been healthier when you first made the choice originally.
That’s just the nature of getting older and not having those kinds of solutions and access.
The founder at Silver has done a great job of educating that there are things out there like AARP that are trying to get this mindshare, like, “I’m the trusted advisor to you because I’ve been giving you all this information for the last 15 years.”
Great, now you have to make this decision.
You start to panic, and you’re like, well, this person actually has told me something for 15 years.
I’m going to choose them.
But, oh, by the way, they only have one option, so of course I’m going to pick theirs.
That was an interesting education.
By partnering with someone like Silver, we’re able to ride on, people do look to credit unions as trusted advisor roles quite typically.
So we’re able to leverage that to get them into maybe a more extensive opportunity.
It’s not like we have a horse in the race.
We can really say, here’s an objective, if you’re trying to do these things, here you go. If you’re trying to do these things, here you go.
Silver’s layered in a lot of AI into their platform more recently to tailor that solution based on your actual needs.
You get different responses as you’re learning about maybe some of these decisions.
Then maybe to the last part of your first-part question, what is missing for that segment?
I think we’ve seen a lot of fintech, and a lot being like four or five, spring up lately, which are more in the trust and will section.
End-of-life planning, divesting assets, different components that are kind of toward that, “I’m making some big decisions maybe not for myself, but maybe a parent went through it, and then I’m going to try to figure this out so my other parent, or myself when I get there, or to benefit my kids.”
A lot of people are going through these and learning the hard way that maybe they’re not as ready or not as knowledgeable to do these things.
The main thing Silver is trying to educate toward is, well, you’re going to have to pick Medicare at some point.
Here are all these decisions that go into it.
As you’re consolidating accounts, there are different effects on retirement, like if you move to different states or if you take your allocations for Social Security, or if you take your allocations from your 401(k) at different times.
They could actually have detrimental effects on it.
It’s been interesting to hear that and then see this almost micro-segment of fintech spring up for this end of the population.
It’s not just who’s going to get the Gen Alphas, Gen Zs, and Millennials anymore.
Yeah.
I think it’s so important because we’ve talked a little bit about that overwhelm feeling of interacting with your money on a budgeting level, but certainly in these moments, I can’t imagine how much emotional distress one is probably under.
The last thing you want to be doing is, like, Google, Google.
She said when she did this for her father, she went down to Barnes & Noble and got a 300-page book to learn about how to set up Social Security.
Like, no.
Who wants to read a 300-page book?
Well, not on that.
Certainly literature.
Yes, literature. Enjoy your 300-page...
Absolutely.
Because also, I’m picturing, you have this very tedious book, and I’m picturing myself and I’d be crying.
I’d be getting the tears on...
I’m glad to see some attention in this area, and I just feel like it’s going to keep revving up.
To be honest, all our Gen Z, Gen Alphas, and Millennials like myself are going to be these people who are going to have to retire at some point.
It is getting closer every day.
So, think technology.
Have the technology we want there when it’s ready, but maybe it’s not used in the same way by the current people in that cohort.
Absolutely.
Then this was my part two where I was jumping the gun again.
The branch.
You’ve referenced it.
It certainly came up.
I felt like attendees at the summit were definitely in defense of the branch because, of course, it’s the thing industry people tend to be like, cut, cut, cut, cut.
But on the other hand, there’s an opportunity.
I’d love you to talk a little bit about how you see the branch’s relevance today and also what makes it have a chance to get more of a tech edge.
You had Larky demoing there, for example, too.
Let’s unpack it a bit.
Absolutely.
I think what we found, and we left the Reseda Summit in Detroit to go to Chicago the next morning to open up a branch in Chicago to expand into that market.
We have 2,200 members in Chicago already.
They all have accounts with us.
The closest branch is maybe Grand Rapids to them.
Wow.
That’s a long drive.
It’s two and a half hours to Grand Rapids from Chicago.
But they have accounts with us.
We’ve seen the second a branch goes in, no matter the location, even if it’s 20 minutes down the road from another one of our locations, the number of deposits and product adoption of those members, and then the new members, all of whom could have had an account with us because we have the digital services, it increases for the first six months after opening a new branch.
So there’s some psychological thing about having that location where you can go in.
I’ve been making a joke lately where it’s like, people want to see their money in the vault.
So there it is.
I want to go in and see it.
Well, it’s not really there, but there’s some safety in it.
But really what they’re looking for is that advice center.
We see a lot of college students coming in when they’re starting to break off and figure themselves out on their own.
They’re going to self-serve all day long until they can’t.
Then they immediately want to come in and talk to someone.
They don’t want to chat. They don’t want to call.
They want to come in and talk to someone face to face when they’re dealing with maybe, and it could be something like budgeting.
It could be buying a car finally for the first time.
A lot of these things people are delaying to later in life and they’ve maybe not done it.
Or it could be, “Hey, my friend transferred me this money in Cash App and I don’t know how to get it out,” or, “I sent this to the wrong person.”
It’s like, well, if you had your account here, here’s some things you could have done differently.
We’re really transforming the branch into being less cash transactional places and automating that side of it, but really making them advice centers and also a place to explore.
If you take maybe some lessons from retail, if you go into some of the bigger cities, you go to maybe some of what’s known as a flagship store.
You go to the Nike store in Chicago or you go to the Nike store in New York.
There are a lot of extra things you can do while you’re there.
They measure your foot and then do some AI stuff and, here you go, here’s the perfect shoe customized for you.
There are different things you can do like that that you’re not going to be able to do at every single Nike retail location across the country.
But if you centralize those, that branch is almost that opportunity to tell that story, try new things, experiment, and show people what we’re doing from a technology space.
We have our innovation lab, The Lab at MSUFCU, at the credit union.
What we’re doing is putting in a mini lab area within each branch where people can see the different digital technology and other things like that as we’re rolling out.
So it’s not just, well, we hope they discover it when we send them an email, or if they log into digital banking they see it.
When they’re in the branch, “Hey, here’s this thing.”
We’re teaching our employees with a small team of individuals at the credit union how to talk about these different digital services in the branch and showing them how to use it while they’re there.
Then one way we’re using it as well, you mentioned Larky.
Larky does geofencing and push notifications.
Those of us who travel and get off the plane, before you walk off the, whatever, it’s not a gangplank, whatever the walkway...
You travel too much.
The Jet Bridge.
The Jet Bridge.
When you’re done with that, you get a survey that says, “How was your experience? Would you recommend someone to fly?”
We’re able to do that same thing.
If they’ve been in the branch more than X number of minutes, we then trigger, as they leave the geofence location to get to their car, “Hey, how was your experience today?”
We’ve tried this with paper.
We’ve sent survey follow-ups.
We’ve called people.
Using this push notification in the time when they’re leaving and thinking about it, it’s just the right mindshare.
It’s the right place, right time.
We’re actually able to get a high response rate and a lot more feedback than the other ways we’ve tried in the past.
Yeah, and that makes a lot of sense.
It’s just easier, and they’re still in that moment, might have actual feedback.
I love that idea of demoing the technology.
I’ve heard some other institutions mention this too.
It’s sort of like the Genius Bar at the branch, and there’s certainly a need to showcase, this is how you do it, kind of thing.
I’d also be curious.
Umpqua used to be known for having yoga classes, but I would love, you go to a store sometimes and they’re like, “Here’s some wine and some snacks, and we’re going to bring in this artist or something.”
I could see that happening at a branch too.
Ben, there’s only one official segment in this show, and that’s “That’s What You Said.”
This is what you said, not actually at the event, but before then.
I think it’s such a lovely thought, so hopefully you still do too.
You said, “I like to define innovation, as I talk about it, as making things better today than it was yesterday.”
Do you still define it that way?
Yes. 100%.
Yep. That’s like a core belief of mine at this point.
Absolutely. There’s no change in that.
Okay, good.
Because it’s beautiful, and I might borrow it and quote you because it’s a hard thing to define.
A little bit of a tangent just because of your other role at the credit union, I mean, you scout out innovation for a credit union.
That is, I don’t want to call it Mission Impossible, but certainly Mission Hard.
I wonder how you source possibilities of like, “Hey, this sounds like an intriguing firm to at least know, if not work with.”
Tell us a little bit about how you source ideas.
Absolutely.
I think we all joke about how many fintech events there are every day and how every event that’s ever been in the industry has become a fintech event.
So there’s no shortage of opportunity, no matter what events you go to.
Whether they’re League events that are more local, if they’re the big national ones, if you’re going to Finovate, Money20/20, Fintech Meetup, you can get access to ideas.
This wave of online versions of those sprung up during COVID as well.
So there’s easy access without even traveling quite far to get access to maybe some new ideas.
But knowing what to do with it is also maybe where it becomes challenging as well.
How do you actually pick from all the noise?
Maybe some advice there is really thinking about who are you as an organization, as a credit union, and what are you trying to accomplish?
If you really don’t know where to start, we all have who we call vendors, and maybe some of those have moved past that word vendor and you’ve called them a partner.
That’s probably the best place to start, and finding someone to explore ideas with.
Early on, before we were doing all the fintech scouting, we would talk to Jack Henry and Visa and some of the other key players that we had and ask them what they were up to and offer to test their new stuff.
At the time, they’re like, “Oh, no one’s ever really asked us to do that. Yes, please. We would love to have someone to co-create this with.”
I think there are a lot of tech providers, vendors, solutions out there that would love to just work with you that you’re already working with.
I would love to have that kind of mutual partnership and be able to try out some ideas and explore them.
Really, again, try not to think, I know people see MSUFCU as this large credit union, like, “Oh, we can’t do that. We’re too small.”
Well, we weren’t as big as we are when we started this journey.
When I started, the credit union was $1.7 billion, and we kind of set this in motion.
I know that’s so large for a credit union, but you could do this at any scale.
To the quote that you just heard, it’s about making things better today than they were yesterday.
You can incrementally make things better.
You could take something that was a paper form and then put it online, which is what we called digital transformation for many years.
But that little improvement is an improvement, and that is innovation.
We don’t have to innovate and create rocket ships and electric cars and all that.
We can make things easier for our employees.
We can make things easier for our members to interact with us.
Really, what I do now, I go to industry events to see what’s happening within financial services.
I also like to go to some other outside things like CES, Consumer Electronics Show.
I hope to get to South by Southwest at some point.
It always seems to overlap with other credit union events.
But these things that are maybe tangential to financial services and how people interact with the world.
We all are consumers.
We all go travel, experience the world, go out to eat.
We use our phones to do different things.
We use our mobile devices.
We get iPads, watches.
What are people using?
You could go sit down somewhere in a big crowded area and see what people are using to understand, how are people interacting with the world and how is it different?
Then it’s just about translating maybe what the core of that was and really this concept of a job to be done.
There’s a Harvard Business School professor, Clayton Christensen, that talks about breaking it down to the job to be done.
We as an executive team took a course of his earlier this year.
It really was helping us see, yes, people aren’t trying to come and move their deposit to us and get a better interest rate.
It’s like, they’re trying to spend money, right?
They’re trying to do these different things with their lives.
We’re just a small piece of that.
Understanding what they’re actually trying to do, then we can create payments products.
We can create the right card, or maybe it’s not a card.
This concept of pay by bank is coming up.
When we get out of our Ubers or order food nowadays, you don’t pull out your credit card to do any of these transactions.
You’re just pushing some buttons, and things show up at your house, or you show up somewhere with yourself and things just appear.
That opportunity to think, “Oh, I pulled out my credit union credit card and spent this money,” we’re more in the background.
How do you figure out how to live in a world where these other things are happening?
A lot of what we’re seeing, like with Netflix, is personalization.
People love Netflix because of the personalization.
People love Amazon because of the personalization.
Well, hey, how can we in financial services personalize the experience in a digital way?
Yeah.
Something that I thought about during the summit and was just reminded of it with what you just said about Netflix.
I kind of wish there was, I wish you could pause a financial product.
Like, hey, I don’t want to quit this bank or credit union, but perhaps I can pause this for a month.
Yeah.
I mean, the closest thing we have now is the skip-a-pay.
You get a one-month reprieve.
But if you could truly pause, because there is a smaller fee than if you were to overdraft or anything with those, but yeah.
I think that’s an interesting thing.
I’m starting up a product team at the credit union as well.
Maybe we’ll explore that pause button.
Look at this inspiration happening right on this podcast episode.
Ben, I don’t want to take up too much more time, but I do have at least two more questions.
One being the opposite of what I just asked, of how to find possibilities.
It’s like, how to cut when you’re like, this pilot isn’t working out so well or not what we need.
How do you do that?
When do you call it quits?
Yeah.
I think it’s really easy, and especially if you’re forming this relationship, you’re helping them start their company, this is all they do quite often, especially in the startup world.
It’s a little bit easier to tell the bigger vendors, they have other clients.
But when you’re their only client, or there’s a personal connection as well, what I found helpful to navigate that conversation, maybe it isn’t working out or it’s just not the right fit for us, doesn’t mean it’s not a good solution.
Doesn’t mean it’s not strong.
Maybe it’s a better direct-to-consumer solution.
It’s just not an offering that the credit union can directly offer to our members.
But by having the data and being in charge of understanding that data, when we first started out in this space, we’d be like, “Oh, we’re going to do this, and this is what we want to test. Fintech, you can give us this information, right?”
They’re going to tell you a story.
It’ll be like, “Oh, well, you had 800% growth on our platform.”
Well, that could have been from one to eight.
That’s 800%, right?
But maybe you want more than eight people to use their app.
So you do have to be in control of the data conversation.
Up front, set some metrics.
There are going to be some assumptions.
If we use this product, we expect to see people use X product three more times a month.
If they do so, it pays for itself.
Anything above that is beneficial ROI to us.
Okay, great.
You do your pilot.
You pick a set period of time, and you have a check-in.
Did they meet the criteria of what you set out?
Did you validate those assumptions?
If you didn’t, it’s a very easy, data-driven conversation that says, “Hey, this is what we talked about up front. This is where we are three months later. Is there something we should do differently?”
If not, maybe this is the wrong thing.
You can also, at every point, make a decision, okay, we’re going to try something new but keep going.
Or you can say, “Hey, we’ve tried three different things. It really is time. It’s not working.”
Maybe another thing to say too is you may get this, “Hey, this is great, but you need to do these three things.”
You don’t have to just hang out for them to do those things and keep having this cycle where you’re paying them month over month while they build their tech.
You could say, “Hey, great. You got what we want. When you build X, Y, and Z, we will come back to you, and then we’ll launch you full-on to all our members.”
But don’t be afraid to say that.
We all are businesses as well.
We like to be charitable and promote our economies and communities, but we don’t have to give it away for free.
We do have to run a business so we can continue to do this.
Totally.
In writing, they call it “kill your darlings.”
Absolutely.
You do have to do that sometimes.
I had to kill one many years ago where I thought voice banking was going to be the coolest thing ever.
We built up a little prototype of an Alexa banking app, and only I liked it.
It seemed so...
Members didn’t get it.
Employees didn’t know how to help people.
I was like, maybe it’s ahead of its time.
Could be ahead of its time.
You certainly weren’t the only credit union that ran up into that particular challenge.
But I do love the philosophy of keep the door open.
Certainly, I have found that if my idea isn’t greenlit immediately, I’m like, that’s coming back to someone at a later date.
Absolutely.
Ben, one last question.
Before that, any last things you’d like the audience to know?
I know you already have a date for the next Reseda Summit, so perhaps that’s...
Yes. Yes.
Next year, save the date, September 17th and 18th, back in Detroit at the Detroit Shinola Hotel.
Put it on your calendar.
Get in your budget approvals now so we’ll be ready for you when you’re ready to sign up.
If you are not watching this but listening to this, he’s in his Detroit hat and Reseda Group T-shirt.
I just want to point out I too am wearing a Michigan necklace.
It has two mittens.
Something I haven’t mentioned now is that I’m from Michigan.
Ben, it was especially wonderful to experience a fintech event in the state where I grew up, and my parents cameoed.
So that was both weird and fun.
Right. Right.
It was fun.
It was fun for the rest of us, maybe weird for you.
Yeah.
I was like, “Oh gosh, what’s going to happen next?”
I’m sure they were thinking the same thing.
Ben, last question.
What’s the photo on your phone’s lock screen, or image?
Oh, let’s see.
Oh, big reveal for him too.
Oh, the dog.
Yes.
That is a classic.
Yeah, and also true of mine.
Well, Ben, thanks so much for being on Money Isn’t Everything.
It was a true pleasure to see you today, but also at the summit, and I look forward to keeping chatting with you.
Yeah, absolutely.
Thank you so much.
Okay, so one thing I learned.
It’s extra fun to be at a fintech event in the state where you grew up, even when your parents cameo.
And two, killing projects is just as important as finding them.
But it doesn’t mean they stay dead.
Wink, wink.
Two weeks from now, I am on with Lindsay Bryan-Podvin.
She’s the founder of Mind Money Balance.
She’s a financial therapist, author, and speaker.
She’s also Cash App’s financial therapist through the end of December of this year.
We chat about financial therapy and the emotional side of money.
See you then.
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