CU QUICK FACTS
121 Financial Credit Union
HQ: Jacksonville, FL
Data as of 03.31.19
12-MO SHARE GROWTH: -1.8%
12-MO LOAN GROWTH: 0.4%
It’s been 11 years since Apple launched its App Store on the iPhone 3G, kicking off a fast-paced mobile consumer revolution and creating an unprecedented opportunity for financial institutions to offer trendsetting features such as multifactor authentication, app-only ATMs, rapid mortgage origination, and AI financial assistants.
Unfortunately, the proliferation of apps from an array of vendors has fractured the user experience. So, how can digital teams at credit unions stitch together disparate solutions under a unified corporate brand?
121 Financial Credit Union ($550.6M, Jacksonville, FL) is tackling the digital experience with a multi-phase program aimed at reducing friction across channels and creating a more agile foundation for adopting future technologies. To date, it has required hard negotiations with vendors, continuous feedback from members, and a double-time march toward IT modernization.
Wave 1 has a launch date of September 2019 and a two-year completion timeline. Wave 2, which the credit union expects to complete within the next five years, will provide a completely unified digital experience.
“This is not a one-and-done project, it has to be ongoing,” says Bruce Fafard, CEO of 121 Financial. “We’re listening to what our membership is looking for and what the demands of the marketplace are. It’s not something you put into a Gantt chart and when you’re at the end of the project, everybody has a party and plays with their swizzle sticks.”
The credit union’s journey began more than four years ago, not long after Fafard took the helm as CEO, with a string of new software implementations. At that time, 121 Financial needed to modernize and add functionality to its key systems, including core processor, internet and mobile banking, phone, lending, and new account systems. The credit union implemented the new systems using multiple providers under an aggressive 24-month timeline.
Chief strategy officer Paul Blackstone, who led the team throughout the software implementations, says it’s pretty common these days for credit unions to choose multiple vendors but rare to find fully integrated solutions.
“Every vendor, every product wants you to have a unique experience, but what they call ‘branding’ is really just putting your logo on it,” Blackstone says. “The reality is, there’s no consistency or even concurrency among these various platforms in the financial services space.”
Soon after the dust settled with the new systems in production, Fafard charged Blackstone with putting together a program to drive automation, correct inconsistencies, and bring apps into a common interface. The goal, Blackstone says, was to make 121 Financial “one of the best financial institutions with the best member experience” within five years.
To achieve that goal, 121 Financial aims to make its banking services completely contextual for members.
“If they’re on their mobile device and they want to use SMS to send us a text, they can do it,” he says. “If they want to use the mobile app? Great. Perhaps they’re at a car dealership and want to pop in a video session with our ITM call center, great. The idea is that they should be able to do what they want to do at that moment, predicated on that context of their life.”
7 Key Systems At 121 Financial
121 Financial has a new environment of best-in-class systems across numerous vendors. They include:
The secret to success for the credit union lies in a seamless experience across multiple apps and eventually getting rid of apps completely by providing the same functionality on a web-based platform.
For example, 121 Financial is planning to release a new feature on its internet banking website that will help members manage debit and credit cards in one place. Members will be able to turn off or turn on their cards, submit vacation/travel notifications, and view fraud alerts.
“The first step is to consolidate and get everybody under one umbrella,” Blackstone says. “We can all share the same data under one corporate app.”
Holding The Line With Vendors
The leaders at 121 Financial encourage other credit unions to talk with their vendors about their priorities and motivations in providing the software before starting any kind of integration project. In most cases, according to Fafard, software vendors aren’t interested in supporting integration with other systems.
“They want to hold you captive, so be firm in what your requirements are,” Fafard says. “We are the ones paying the bills. We are the ones using the technology. If we make a determination that Company X has a better solution for our members, then we’re going to go in that direction. But we’re going to require them up front to give us access so we can integrate and avoid the multiple app environment.”
Fafard says to expect pushback from vendors, whose business model is based on the profitability of licensing the same product to as many credit unions as possible. Often their initial quote for doing the integration work is highly inflated to discourage special projects for individual software clients.
“You’ll get pushback, but you’ve got to hold the line,” the CEO says. “You cannot allow them to dictate how you run your business. You have to run your business the way your members want it to be run. If we come across a partner that’s not willing to do that, frankly, we’ll find someone else who is.”
Maximum Return On Investment
In most cases, Blackstone notes, other credit unions are likely to be interested in making the same enhancements to their systems. As such, the credit union uses its investment in the integration work or new functionality as a negotiation tactic. If anyone else buys it, 121 Financial wants royalties. That strategy helps recoup some of the up-front development costs and creates a potential new revenue stream for the credit union.
Throughout the software industry, leadership changes at vendors have made them more accommodating than they were just a few years ago, Blackstone says. In fact, during a recent round of negotiations with a vendor, the vendor agreed to add new functionality to the system using its own development dollars, recognizing that other credit unions will want the same functionality when it becomes available. Blackstone applauds the move because it means the vendor is taking on more risk and betting on the success of the credit union.
Still other vendors are actively approaching 121 Financial to determine what integrations will make their product invaluable to the credit union.
“Rather than building the wheel ourselves, these guys are coming to us and wanting to work with us,” Blackstone says. “We’re seeing a lot more of that.”
Relevance In The Marketplace
With the entrance of Venmo, Zelle, and Rocket Mortgage, among others, members now expect fast, full-featured experiences in all their products.
Blackstone says 121 Financial reached out to Zelle because members were asking about it, but offering today’s hot person-to-person payment app presented a significant downside.
“They want your third child and all of the member data in order to license that technology,” the strategy officer says.
That’s why Blackstone says it’s crucial to challenge vendors to provide these new technologies and stay relevant in the marketplace.
“Technology providers need to get a lot more agile in bringing these solutions to market at a reasonable cost,” he says.
Member Beta Testing Feedback
Collecting and analyzing member feedback is a key part of 121 Financial’s digital strategy. Feedback about the member experience comes in online, over the phone, and in person. The credit union takes that feedback and incorporates it into project plans.
The credit union plans to enlist the aid of a beta testing group of approximately 100 to 500 members and actively solicit feedback on new features, user interfaces, integration among systems and more. Blackstone likens it to the Waze app, an online community of motorists who help fellow drivers find the best routes.
“As we’re making these evolutionary changes, we’re having people jump in and become part of the solution,” Blackstone says. “People like being part of the process. That promotes momentum. We’re also counting on them to be our advocates in the marketplace.”
New Rules For Member Loyalty
The pro-active approach to member feedback recognizes generational variances and the shifting norms for loyalty. Older, long-time members demonstrate higher levels of loyalty than up-and-coming millennials, but 121 Financial aims to change that.
“We have to be engaged with this generation, and our voice can’t be disingenuous,” Blackstone says. “If we’re going to ask the question, we have to be ready for honest feedback and be able to respond it.”
The new feedback system integrates with 121 Financial’s existing customer relationship management system, so the management team can consolidate all feedback into a single platform, assign communications to the right areas, and ensure employees respond to members’ questions and comments. It also captures sales opportunities and pushes them into the Symitar sales management platform.
“It’s great if we launch something,” Blackstone says. “But there needs to be a way to track it, put metrics in it, and prove its success.”
To be sure, technology is playing a major role in the future of the member experience at 121 Financial, but at the same time, the credit union also plans to continue operating branches for members who prefer that channel. After all, a successful future is one that reduces friction across all channels.
“The branch is not dead; however, our members have consistently migrated toward electronic channels,” says CEO Fafard. “We want to remove the barriers for our members and have the flexibility to help our members conduct business anytime or anywhere they want.”