Thursday, Aug. 20, is National Fintech Day, the third annual celebration of the collaboration between financial institutions and their technology providers, a partnership that has been powering a rapid evolution of digital products and services for more than 25 years.
Credit unions have long been forerunners in the fintech movement. It was Stanford Federal Credit Union ($3.3B, Palo Alto, CA) that launched the first online banking service CUOnline in late 1993. And in 2009, Element Federal Credit Union ($53.3M, Charleston, WV) became the first financial institution to offer remote deposit capture, even though USAA is routinely given credit for that feat. The movement also was the first to host ITMs.
Today, credit unions, banks, and non-banks all are striving to expand and integrate online offerings in a non-stop drive for innovation and competitive edge. The COVID-19 pandemic has underlined the importance of self-service options and pushed the fintech envelope even further.
Here, four industry suppliers across a diverse range of digital financial solutions share how the pandemic has affected their work and why fintech will continue to have a profound effect on consumers as well as banking.
Glia, New York, NY
Dan Michaeli, CEO, Glia
Dan Michaeli is co-founder and CEO of Glia, whose digital member service platform allows service representatives to support members conversationally and collaboratively through voice, messaging, video, and co-browsing.
The company was founded in 2012 and says it now has more than 100 financial institution clients a significant number of them credit unions across North America.
How can fintech help credit unions build on today s financial services technology? In what ways can fintech help cooperatives better serve members in the future?
Dan Michaeli: Credit unions have always put member service at the center, and fintechs can help them build upon that commitment and modernize member interactions in a digital world.
Often, credit unions don t have the time or resources available to develop the technology necessary to compete and provide a digitally optimized experience themselves. That s where relying on proven fintechs can provide a competitive advantage.
How has COVID-19 affected your strategic product planning and service changes?
DM: Glia has experienced strong momentum this year as COVID-19 has accelerated digital initiatives. The pandemic has emphasized what we ve believed for years: The future is digital, and credit unions must adapt their member service models to achieve meaningful digital transformation. To navigate this new normal, credit unions need tools that deliver seamless, efficient member service, ultimately improving the overall member experience.
Payrailz and CU Railz, Glastonbury, CT
Mickey Goldwasser, VP of Marketing and Chief of Staff, Payrailz
Mickey Goldwasser is a longtime technology marketer in the credit union space. He currently is vice president and chief of staff for Payrailz, a provider of secure advanced bill payment, bill negotiation, P2P, and A2A solutions to credit unions and banks.
Payrailz and its affiliated CUSO, CU Railz, count 14 credit unions among the clients using the company s platform three of those credit unions are among the nation s 15 largest, Goldwasser says.
How can fintech help credit unions build on today s financial services technology? In what ways can fintech help cooperatives better serve members in the future?
Mickey Goldwasser: As a member of the supervisory committee of my credit union, I believe it comes down to having the right services and getting the word out. Like every other cooperative, we ve had to deal with members not being able to go into their branches, but this tragedy that is COVID-19 is giving us the opportunity to build our brand as a financial institution that understands that and delivers.
Credit union membership is aging, and the future depends on engaging younger consumers. My own adult daughter asked me not long ago what I thought of Bank of America. I asked her why, and she said she wanted mobile banking.
Our credit union had mobile banking. That was one of those punch in the face moments for me. It told me we weren t doing a good enough job telling her and everyone else that we have what they need.
Fintechs like ours have to not only ensure credit unions have the right services but also help our clients make sure they communicate that to members and potential members in ways that resonate with them.
How has COVID-19 affected your strategic product planning and service delivery?
MG: The pandemic has accelerated the realization that credit unions and banks have to up their digital payments game because people aren t walking into branches like they used to. What used to be is not coming back.
Digital services used to be a kind of check the box thing, but that s no longer the case. Now, you have to not only ensure the member experience is good and real but also promote it as such. To everyone. Remember, we have grandparents using Zoom now. This crosses all demographics.
It s also important to realize a person s last experience is their newest experience. People don t mind being offered things online as long as they re timely and relevant. The whole notion of know your member has been accelerated by the coronavirus. Solutions that are directed, targeted, and simplify people s lives are those that will succeed.
POPi/o, Sandy, UT
Tim Pranger, Director of Solution Consulting, POPi/o
Tim Pranger is a co-founder and director of solution consulting for POPi/o, a provider of collaborative video banking software that began as a mobile app and now serves members on laptops and other PCs and inside branches.
The company s CEO, Gene Pranger, is credited as the developer of the original ITM and sold that company, uGenius, to NCR in 2012. POPi/o was founded in 2013 and says it now serves more than 90 financial institutions, 80% of them credit unions.
How can fintech help credit unions build on today s financial services technology? In what ways can fintech help cooperatives better serve members in the future?
Tim Pranger: Fintech should be advancing any and all digital touchpoints. In our current environment, some touchpoints are proving to be either effective or ineffective.
If fintech can be hyper-focused on innovation that creates effective digital interactions, then financial cooperatives can focus on coupling their strategic initiatives with fintechs that have solutions that meet the needs of their communities.
It might require multiple fintechs to achieve the credit union s goals, but the credit union must create the vision. It is then fintech s responsibility to help execute through continuous digital innovation.
How has COVID-19 affected your strategic product planning and service delivery?
TP: COVID-19 has, if anything, reaffirmed our company s strategic direction: Allow anything that can happen in a branch with a person to happen over video.
The technology shifts that credit unions and members are undergoing due to the pandemic are not temporary changes, especially concerning overall digital adoption. All advancements that we make to our product and are implemented by our customers will be long-term shifts in how financial transactions are completed. Once you adopt a better, safer way online remote notary, for example you can t reverse course.
Vertifi Software, Burlington, MA
Darlene Howlett is chief operations officer at Vertifi Software, a CUSO of EasCorp that claims the title of first provider of remote deposit capture for consumers and businesses made available commercially to financial institutions in the United States.
Vertifi was launched in 2009 and now has hundreds of clients, primarily credit unions, using its array of branch and mobile check capture software, electronic and print statement services, mobile banking apps, and voice-enabled banking skills.
How can fintech help credit unions build on today s financial services technology? In what ways can fintech help cooperatives better serve members in the future?
Darlene Howlett: In the past few years, the term fintech has become associated with unregulated, and sometimes unstable, startups poised to disrupt the traditional financial services ecosystem. The reality is Vertifi is itself a fintech and has been offering innovative check processing technology and digital banking solutions safely and securely for more than a decade.
We have seen radical transformations in our field before ATMs, check imaging, APIs, wearable devices and each milestone has been the foundation for another.
As credit unions build their membership with and derive greater revenue from digital offerings, we imagine our role will be to provide access to new payments systems, to ease the adoption and integration of new digital tools, to improve back-office efficiencies and the user experience, and to imagine the next generation of service offerings in service to our clients and their members.
How has COVID-19 affected your strategic product planning and service delivery?
DH: COVID-19 has not radically changed our overall product planning strategy or trajectory, but it did prompt our team to develop new tools to help our clients adapt to this new reality.
Vertifi s ongoing investment in the development of our proprietary RDC technology in particular readied our company and this service for skyrocketing channel growth and the changing fraud landscape at the start of the pandemic.
For example, to help our clients process the economic impact payments efficiently while minimizing exposure to losses, we released new, fully integrated U.S. Treasury check verification and reporting tools at no charge. Developed in cooperation with the U.S. Treasury, this new risk mitigation tool was released as the first round of EIPs were issued.
Since June 1, 2020, alone, the system has identified hundreds of red flag items, including nearly 125 stale checks, more than 300 checks found to be previously paid, nearly 500 checks with wrong amounts, and more than 100 checks with stop codes. That s more than $1 million in potential losses that didn t happen.
