LAS VEGAS–CEOS and executives from five different CUSOs shared their insights and views on a host of issues affecting credit unions, ranging from why some partnerships fail, what they’re doing for small CUs, what all CUs can do better in working with CUSOs, and more.
The discussion took place during NACUSO’s Reimagine Conference on “Transformation Thursday,” which is hosted by Mitchell Stankovic Associates as part of its Underground Initiative.
The panel, which was moderated by Nick Evens, CEO of Curql Fund, included Jay Mossman, founder and CEO of AKUVO; Phil Dupree, chief revenue officer at Origence, Chris Otey, CRO and cofounder of CU 2.0; Sam Das, managing director of TruStage Ventures, and Melanie Munsey, CEO of Credit Unions First.
Here is a look at how each responded to the question posed to them by Evens:
Q: Tell us more about Origence’s mantra, ‘We go as credit unions go.’
Dupree: We’re owned by 120 credit unions so, obviously, this is really important to us. Our success is really intertwined with credit union success. If we can help them be more successful, we’re going to be more successful.
When you think about your competitive edge and when you look at what other people don’t have, I think collaboration is the power that we should use more. Let’s equip folks with skills and knowledge to be able to do their jobs even better. Hopefully, with AI and other things we can help you reduce some of the headcount.
Q: As a serial fintech entrepreneur, you understand scale. But how do you engage with smaller CUs.
Mossman: We focused on the top CUs when we came out with our product. We brought our first customer to live in December of 2021 and as of today we have processed 20-million members and 84 million accounts every night in a little over three years.
As a company we have started to look at how can we move downstream and we recently announced that we were taking our platform and breaking it into three packages:
- Digital, which is digital only
Essential, which is intended for credit unions with 37,500 members or fewer - Signature, for the those that are greater than Essential,
What we said is we’ve got to change our business model. So, we’ve done a couple of things. One, we’ve packaged it with best practices. What we’re saying to that Essential package group is, ‘Trust us, we have best practices already in place. Let’s not do what the big guys do and want to reinvent it and make it look just like what we did before.’
We said we’ve got to change our pricing model…We have some ters, but if you’re 10,000 or less in members it’s $833 a month…We really tried to rethink the pricing model. There are also no implementation costs.
We’ve also actually looked inside our own company and (looked) to improve ourselves to get our own costs down. We’re using AI and by the end of this year we’ll actually have a digital support assistant where people can either call on the phone and speak to it and ask questions by using chat on their phone and be able to get support from us. That way, we don’t have to bunch of people (and customers) get 24/7 servicer.
Q: Credit Unions First is a new CUSO. What was the impetus to start a CUSO?
Munsey: Our founders were really passionate about credit unions, and I understood CUSOs. If you notice our name, it’s Credit Unions First, and we are as transparent as we can be. If it’s a smaller credit union we’re going to meet them where they’re at. Pricing is set for each credit union. We want to help them share that revenue from all the ancillary products that we’re building out right now.
We want to help our communities, we want the members to get their money back, and if we didn’t we would not be a CUSO. We’re surrounding ourselves with other CUSOs…We want to show everybody this is who we are.
We brought on a new employee and the first thing we did was fly her to America’s Credit Union Museum (in Manchester, N.H.)…because we need to educate our team on what a credit union is.
Q: We know fintech partnerships are required to survive, and you are making that happen. How do you see this reimagination of technology evolving?
Otey: At 2.0 we are reimagining how you acquire technology and how the technology is sold to you. When we onboard new fintechs in CU 2.0, the first thing I do is I teach a class called Credit Union 101. It’s something that is important as an industry.
We try to work with fintechs that can scale from top to bottom right. We don’t want to work with fintechs that just want to break into the top 100 credit unions in the United States This is a partnership and a collaboration. Collaboration is when you partner with the fintech. And if you invest in a fintech and don’t use it, that’s the downfall…We don’t allow anybody to invest unless they use the product and then jump into it.
My takeaway is fail forward fast with these fintechs. But partnering is the key.
Q: You’re investing—55 or so—in fintechs. Tell us more about what you’re doing, what you’re seeing in big CUs vs small CUs?
Das: Whether you’re a large or small fintech, it’s all the same–you have to find those relationships. That’s what we’re really trying to foster and trying to get out into the world.
There’s a vast difference between a credit union that might have $100 million in assets that wants to become a $500 million or a billion-dollar credit union, and a credit union with $250 million in assets that aspires to be $260 million. It’s a big change in mindset.
Three Issues
There are three issues we see:
- The first is just general awareness. There’s a ton of great content and these types of conferences where we’re getting lots of collaboration between credit unions fintech CUSOs. It’s everyone under the sun. There’s problem solving, and that’s great, but a lot of times it doesn’t get (shared) with the broad audience and those who aren’t in this world.
On the venture side we’re briefing them on what we’re doing and the solutions that are within the portfolio that might be applicable to them. You’d be shocked at how unaware they are that these solutions even exist. So, right there we need to do a better job.
- Everyone has limitations whether it’s dollars or personnel, everyone’s struggling trying to figure out how to implement these solutions. Even if the CEO buys in they still have to go to their board and the board has no idea what’s going on in the space and they’ve been on that board for 30-40 years…Arm them with a tool to educate those constituents.
- Let’s say everyone bought in and now it’s a question of, ‘OK is there a tech stack compatibility? How can we actually get these things to implement?’ The good news is even with the incumbent tech stack they are opening up their APIs, they’re making it a little bit easier for these solutions. I would say the next generation of fintechs that are working with those solutions are creating this environment. They are making it that much easier to get implemented.
- One of the things we’re doing is actively promoting just within the portfolio and making sure that all these sister portfolio companies are talking to one another and if they are overlapping with the same credit union client, that they’re optimizing that experience for the credit union…There’s a ton of opportunity out there