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big. bright. minds.·Conferences·Crash·CUNA·Filene·Innovation·Technology

Bigger, Brighter, Mind…ier?

I just spent the past two days at Harvard for the ‪#‎bigbrightminds‬ conference, and 24 hours later my mind is still recuperating from being totally blown. I’m back in the office today reflecting on the experience and content, and it’s starting to sink in that I was just exposed to the ideas and leaders who will not only define the credit union movement in the coming years, but in some cases actually shake the broader financial industry to its core, drastically change how millions of Americans will view personal finance and put a spotlight on the interconnectedness of economics, culture and social movements.

Society of Grownups

Nondini Naqui, president and CEO of the Society of Grownups, and Brian Rich, marketing coordinator at Icon Credit Union

We heard from Nondini Naqui from the Society of Grownups in Boston who is less than two years into their Millennial-focused financial literacy campaign and has already helped thousands of young people better understand finances, all while growing their staff to 40 full-time employees (in 22 months) and securing an additional $100 million in funding to expand their much needed services to 10 of the nation’s biggest cities. Like their page and get ready for Naqui’s TED Talk in February because once the world hears her message (delivered with eloquence most presidents would envy), everything is going to change.

We heard Hope Jensen Schau, professor of marketing at the University of Arizona, discuss research showing how Millennials view large institutions with deep skepticism, but place enormous value in peer-to-peer institutions making a social impact. While Millennials are still poorly informed on the subject, her studies have so far shown an enormous interest in credit unions and how they can weave into the “pro-social” mindset of Millennials, who are largely uninterested in supporting institutions that don’t provide a clear social benefit along with their business model.

Jonathan Morduch, professor of public policy and economics at New York University, explained that household incomes today are as volatile as they’ve ever been, fluctuating more than 20% above/below their annualized monthly median income at least five months each year. These extreme spikes and dips highlight the importance of short-term savings – a product and habit that still today eludes consumers and financial institutions alike.

Crashers and Jim Nussle

Some of the Big. Bright. Minds. crashers with Jim Nussle, president and CEO of the Credit Union National Association.

Dennis Campbell, professor of business administration at Harvard Business School, spoke about the importance of freedom within organizational culture and how to design a framework or “boundary systems” that respects hierarchical integrity while empowering employees to make and own critical decisions. Campbell showed research that proved an organization’s culture is not defined by words, but tacitly by the decisions made by leadership and the prioritization of constituents in short term trade-off situations (e.g. when priorities conflict at Amazon or Southwest Airlines, Amazon puts the customer/price first and Southwest puts the organization’s culture first – and the decisions are made openly and in plain sight).

Campbell also discussed an incredible business/case-study in Turkey, where a collections business called TurkAsset is in the process of flipping a toxic industry on its head by simply choosing to view humans as its customers instead of the banks offloading subprime loans.

We were briefed on the latest products and services being developed internally by Filene Research Institute, including some incredible ideas around short-term loan options to neutralize the disastrous payday lending industry and a new credit monitoring app called SavvyMoney that will weave seamlessly into online banking systems for thousands of credit unions nationwide. This amazing program could finally and permanently end the elusive nature of credit scores, help millions of consumers put an end to identity theft, save members thousands by easing the process of debt consolidation and encourage healthier financial habits by providing instant feedback on the consequences of your good and bad financial decisions.

The depth and breadth of topics discussed in such a short window of time is a perfect metaphor for the very business model of Filene, which uses a small staff and enormous levels of talent to research and implement industry-changing ideas to benefit millions of credit union members – and consumers in general – across the country. And what better location but to host the entire event at Harvard, which established the expectation that we were in for a world-class schooling on economic innovations. An enormous thank you to Filene, CUNA, our hosts at the Harvard University Employees Credit Union, our crash host James Marshall, to all of the guest speakers and to everyone else who helped make this such a tremendous learning experience!

Canada·Careers·Change·Creativity·Ideas·Innovation·Leadership·New Release·Professional Development·Technology

Strategic Challenge 2015: What Will You Stop Doing?

Think back to the last adult conversation you had. I’m guessing it went something like this:

“Hi there. How are you?”

“I’m well. You?”

“I’m doing well. But so busy. I had three meetings today. The examiners were in last month and I’m working on responses to two findings. We are considering a core conversion and I’ve been working on committees to move that project forward. I forgot my son had a science project due, so I was up until 2 AM working on his project last night and my father is coming into town this weekend, so as soon as we are done with this meeting, I have to rush home to make sure the house is in order. Hang on, I’m getting a text from my husband.”

Human beings are busier than ever. Here are eight things you might not know about busyness in America.

Considering how busy we are, as we head into the credit union industry’s peak “strategic planning” season, credit unions across North America might be overwhelmed with the many important strategic questions that are under consideration:

  • What is our “why?”
  • Is our vision aggressive enough for the next 3 years?
  • What do our members and potential members need and want?
  • How will we attract the next generation of members?
  • How will we make using the credit union easier than ever?
  • What will the branch of the future look like and what purpose will it serve?
  • What will our digital strategy be in this omni-channel world and how will we meet our members where they are?
  • What will our payment strategy be?
  • How will we retain and attract top talent and what is our succession plan?
  • How will we integrate innovation into our daily lives?

Whew. Those are just some of the many questions credit union executives and boards are considering. This business of strategizing to create the best credit union to serve our members into the future is both exciting and challenging. It sure keeps us busy! Of course, asking the right questions is only the start. Developing the answers to those questions, prioritizing strategies and ultimately implementing new ideas all while continuing to improve the financial situation of our members takes determination, grit and the balance between pausing to strategize and relentlessly executing.

As we balance these strategic questions and the busyness we all feel, one question I’d invite credit union executives and boards to consider during the strategy sessions this fall is this: what will we stop doing? It might be the hardest question of all. We want so much to be all things to all members and potential members. We want to take on more so that we can differentiate ourselves in the marketplace and dominate the competition. However, there is only so much time in everyday. Having spent 14 years in three different credit unions, I know how many hats the average credit union team member is wearing. If you’ve come up with an exceptional strategic plan with great new ideas this year, challenge your team to come up at least three things that you’ll stop doing.

Here are a few suggestions to consider*:

  • Offering paper statements for free
  • Offering paper brochures
  • Mailing receipts
  • Requiring duplicate entry of information on membership applications and loan applications
  • Requiring members to repeat information when they are transferred
  • Running any report that hasn’t been read in the last six months
  • Kicking off new projects that don’t have a direct link to your strategy
  • Mailing newsletters
  • Blocking social media access
  • Holding meetings on Fridays

This is a challenge that I’ll take with you. I’m very bad at saying no and it’s unusual for me to stop doing things. I just keep adding on and wishing that someone would add an eighth day to our week. So, I’ll join you. Let’s touch base in six months and see how we’ve done.

What could your credit union stop doing? I’d love to hear your ideas.

*Disclaimer: These are only ideas and every credit union should investigate all new endeavors including the regulatory and compliance considerations before making changes to current practices.

Change·Gen Y·Innovation·Technology

Disruption Watch: Why the Banking Status Quo is Risky

“Banks that cling to the status quo risk being viewed over time more like utilities that conduct financial transactions.” — The Digital Disruption in Banking, Accenture.

What’s more commodified than money? Despite our regular complaints about regulation, competition and, yes commodification, banking is a remarkably desirable business. After all, if you want to make money, go find where the money is.

Google has been knocking on the door with Google Wallet for years. The telcos launched Isis before that name got in the news for all the wrong reasons. PayPal is reinforcing its empire, while Square makes steady inroads. Amazon is, of course, playing the game. What all these tech companies have in common is the recognition that customer relationships live in payments. The tighter you control the payment, the closer you are to the customer (and the better claim you get on that interchange revenue).

Equally noteworthy is the fact that few of these competitors have shown deep interest in actually owning and running a bank. Part of this is Walmart effect, but part of it is also the recognition that the compliance and treasury aspects of banking are not where the consumer sees value.

Source: Accenture, 2014

But consumers know good tech when they see it, which is why credit unions should worry when half of Square’s customers say they would bank with them if they could. Apple and Google could (would?) capture a quarter of their users if they offered banking. And even AT&T and Sprint might capture a quarter of theirs as well. As the world becomes increasingly digital, and as young adults lead that digital charge, credit unions cannot bank on the status quo.

Business Development·Change·Creativity·Ideas·Innovation·Technology

Our Crashers can THiNK!

Hi Team Cooperative Trust.

Have you heard about THIS?! It’s kinda cool – and this year, not one BUT TWO of our awesome family are finalists.

Brett Wooden with “Where’s my Allowance?”, a cool app which will help to teach young users financial literacy.  

And Chris Whalen with “MobileOne”, a complete mobile banking platform solution for credit unions.

This is all really exciting! Please support out community and vote for your favourite Crasher!

Click here to vote now. Voting closes on May 2nd, 2014.

Thanks,

James

Data Science·Technology

July Focus: Technology

Statistics show that a nerd is born every 6 seconds, well no, not really. It’s more like every 9 seconds, but the data is slightly skewed…Ok, you got me, I don’t really have any data on the nerd birth-rate per second.  What I do have though are some fun facts about our Technology discussion over the past month.

 

In July, the Cooperative Trust explored a number of burgeoning issues surrounding technology and credit unions. The awesome news is that the future is big, bright, and filled with some brilliant credit union minds. Here’s just a smattering of what was tossed around:

  • James & Theresa got us talking about how we can use technologies like geocoding and location intelligence to sharpen our credit union’s competitive advantage.
  • Zac brought up a great idea about utilizing predictive technology in a credit union app to help members manage their financial lives.
  • The idea of being paid in mobile data to watch ads was thrown around with the launch of tech startup Aquto.
  • We were intrigued by CUFX announcing technology standards across the CU sphere.
  • Chad got our juices flowing with an idea about integrating Google’s Prediction API into a product recommendation engine based on a member’s financial behavior.

Saving the best for last, we had the great honor of participating in a Google Hangout with Phillip Kallerhoff, PhD from Jumiya Inc, a rewards program aimed at linking a healthy lifestyle and financial wellness. Dr. Kallerhoff, a data scientist (fancy name for math genius), shared valuable insights from his breakdown of large, member data sets, encompassing over 250 million transactions from five credit unions. His analysis points to some really interesting opportunities for credit unions, particularly in relation to lending to borrowers with lower credit scores. The bottom line is that credit unions have a plethora of data that is just waiting to be analysed. The quicker we start integrating the tools necessary to extract and interpret that data the better.

Well that’s it folks, July was a whirlwind of discussion, idea sharing and overall Nerd-Dom. I hope you enjoyed it as much as I did!

-  Disclaimer: No nerds or technology wares whatsoever were hurt in the creation of this blog post.

 

Creativity·Ideas·Innovation·Technology

Filene’s Experiential Learning Colloquium an Experience for FL Advocates

Experience is the best teacher, if you make it so.

Lou Centini, University Of Virginia

If getting owned in a game of Monopoly by a 6th grader sounds like a joke, you have never met Tim Vandenberg. He teaches his elementary math class by playing the classic board game with his students, some of whom have beaten the reigning national Monopoly champion twice (Yes, that does exist). To Tim, Monopoly is more than a game– it is how he has inspired his students in the low income, high gang community of Hesperia, CA to excel in standardized math testing.

Tim was one of many uniquely creative speakers at the Credit Union Experiential Learning Colloquium presented by Filene in Atlanta, GA in January. Seventy credit union employees from around the nation listened, discussed and even “played” through many thought provoking educational methods at the colloquium, which was centered on some of the best practices of engaging financial literacy for credit unions to utilize.

Here is a list of the experiential learning gurus that spoke and the topics they presented:

  • Lou Centini, Professor of Business at the Darden School, University of Virginia, laid the foundation of experiential learning theory (ELT). Discussing pioneers in ELT research such as John Dewey and David Kolb, he presented the successful criteria needed and applications to utilize for creating experiential learning for adults and children. Check out some books on the historic race to the South Pole by Robert Falcon Scott and Ronald Amundsen for a real life case study on experiential learning — learning by doing.
  • Tim Vandenberg, Elementary Math teacher for the Hesperia School District in California teaches his students mathematical and social enrichment through the Monopoly board game. Students learn probabilities, expected value, exponential growth, financial literacy (of course) and much more by playing the game (who knew?) Interesting fact: Vandenberg took second place in the national Monopoly tournament and his students have competed with and beaten the champ. Additional interesting fact: In Monopoly, the orange spaces are King!!
  •  Ben Rogers, one of the many genius researchers at Filene, discussed “Gamification” being used by credit unions and leagues to promote saving and debt reduction. Whether you have to win, are looking for self-gratification, or are just competing for socialization, we all like to play games. Check out the GECU Savings Challenge or Astera Credit Union’s Save to Win for how this can be utilized by credit unions.
  • Jason Young and Tracy Moore of Mindblown Labs have created their business to fuse gaming and financial literacy. Through their game “Mindblown Life”, currently in production, young adults can create an avatar and guide themselves through financial and lifestyle  decisions. This simulation allows users to make financial mistakes in the game, hopefully avoiding them in the real world.  My only question is, should I be a rapper or a bank teller?
  • Lance Palmer, University of Georgia, and Georgia United Credit Union shared their success with fusing university finance students and the IRS Volunteer Income Tax Assistance (VITA) program. Students are graded by their professor as they assist those in the community that can use the most help, especially during tax time. This partnership is used to educate the community, through a short video, about saving money while receiving free tax assistance. It is a win-win-win for the university, credit union and community.
  • Lois Kitsch, NCUF National Program Director of Real Solution, presented the capstone of the colloquium, a Life (Poverty) Simulation (not a game) in which all participants were divided into families and assigned roles. Families were given weekly tasks to achieve (pay the bills, take the kids to school, avoid going broke) while living on a modest income. The ultimate in reality stores, all credit union employees would benefit from a “walk in the shoes” of some of our members as they struggle through life. If you have ever thought your week only afforded you 15 minutes to get it all done, you would fit right into this simulation.
Change·Innovation·Technology

A Game of Leapfrog

Progress is the replacing of the best there is with something better still.

- Edward Filene

Most people working in the financial industry are familiar with “unbanked” and “underbanked” people.

Underbanked people may have a credit union or bank account, but tend to rely on alternative financial services like check-cashers and payday lenders. Unbanked people have no checking or savings account.

At this year’s CU Watercooler Symposium, Ron Shevlin introduced me to the term “de-banked.”

Debanked: Mainstream consumers who willingly opt out of the financial system in favor of better and healthier options.

I hadn’t heard anyone put a button on it quite like this. People are getting better at not needing you.

The tools for people to provide themselves with full-service banking outside of the banking system are here, many of them better than the tools traditional banks and credit unions provide.

Peer-to-peer lending (like Lending Club) is one of the earliest examples. Using a little bit of technology, people skipped the middle man and directly invested in and borrowed from each other. Solidarity lending circles, like those used by Grameen Bank, demonstrated that social accountability can reduce risk. The Cooperative Trust’s Tru Account uses the same system of accountability to essentially create a revolving line of emergency credit that, rather than relying on a traditional or predatory lender, is entirely funded by your peer group.

Kickstarter has proven that it is comparitively easy to skip the small business loan and fund a compelling product.

Kenya’s M-Pesa leapfrogged the financial system entirely with a mobile platform that allows users to deposit, withdraw, and transfer money easily with a mobile device. No bank or credit union needed.

Paypal’s Zong also allows users to bypass traditional banking and pay directly for purchases directly through your mobile provider.

Square means small vendors all over the world can skip dealing with credit card processors and take card payments through your phone. If Square offered direct transactional capabilities (or, say, acquired Simple), they’d completely displace the need for financial institutions to offer transactional products.

Look outside of the financial world and you’ll see this is a snapshot of something bigger. DIY (do-it-yourself) movements are disrupting other legacy industries across the world.

Independent musicians can build a following, organize tours, and sell and distribute music and merchandise with the same (if not greater) power that a label provided less than a decade ago. So labels are scrambling to rethink their model.

Small businesses can do the same, so advertising agencies and retailers are scrambling to rethink their model.

Mobile health tools like D-Tree and Voxiva are bringing certain types of self-service diagnosis, check-ups, and treatment to people who lack access to the healthcare system.

Cheaper equipment and unlimited access to communities and information means major breakthroughs in the fields of biotechechnology, robotics and artificial intelligence, and manufacturing are coming from “amatures,” people choosing to tinker in their garage rather than working through large research and development institutions.

Open education platforms Khan Academy and MIT and Stanford’s open courseware provide the world’s best education without the entangelment and debt of the institutional learning.

Technology allows individuals to do things once reserved for billion dollar companies.

“It’s easier to build than to reform a system,” MIT’s William Haseltine said in a recent lecture. When systems are broken, when complexity overshadows capability, people build.

The thing is, I don’t think I’m telling you anything most of you haven’t already heard. If you read the news, you know this.

But meanwhile, many credit unions still don’t even offer online account opening. We’re saddled by regulations. We’re a weighty, slow-moving beast. We make excuses.

Consumer finance is not just begging for disruption, it’s experiencing it. In a few short years, many traditional institutions will be passed over. Leapfrogged. It’s easier to build than reform, and people are building.

Let’s build with them.

(Originally published on the CU Watercooler)

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