Think of it as Shark Tank with a credit union spin, and it’s just been renewed for another season.
The 2023 Innovation Series from CreditUnions.com and Callahan & Associates is underway. Every year since 2018, this series has offered a select group of suppliers 10 minutes each to impress an audience of credit union decision-makers. It’s simple: Each vendor pitches its offerings and attendees vote on their favorites.
The Innovation Series was a hit from the get-go and continues to grow in popularity. This year’s focus areas include digital, member experience, and lending.
Read on for more from this year’s lending finalists: CU NextGen, Equipifi, Pulsate , and SYFRR. Then, register for the Innovations In Lending webinar.
CU NextGen
Describe your innovation.
Anthony Arizola: CU NextGen has developed a lending innovation that is solving credit union members’ needs in real-time and keeping them out of the hands of risky payday lenders. The Automated Microloan is a solution housed in credit unions’ online and mobile banking systems that allows members to request a personal loan of up to $2,000 at any time of the day — seven days a week. This loan is funded with no credit check and instantly gives approval and funding — all powered by CU NextGen automation and AI technology — providing members relief when they need it most.
What opportunity or challenge does it address?
AA: The Automated Microloan provides a solution to members when they need it most. Emergencies always seem to happen at the worst times — on the weekends, late in the evening, and when traditional financial relief might be closed. This solution allows members to get the cash they need for unforeseen circumstances right when they need it, allowing them to avoid a payday lender or placing a large balance on a high-interest credit card. The solution comes from their trusted credit union in minutes.
How does it increase member value?
AA: The Automated Microloan is a future-focused alternative to payday loans. The microloan quickly provides funds to hardworking credit union members. With only a few clicks of a button, members can see if they qualify for quick cash when they need it most. Approved members will instantaneously receive loan funds within minutes to their credit union account. The goal is to help members reduce their reliance on predatory payday loans and help them stay the course of financial wellness.
What differentiates this innovation from competitors?
AA: This loan is funded almost instantly, with no credit check hitting members. This is also 100% automated, which truly allows members to get the relief they need without having to wait on a credit union employee to review. Financial education is also a key factor. When a loan is funded, a trained financial counselor promptly connects with the member to help them set up a plan that works for them to pay back the loan and to set savings goals for future needs.
Equipifi
Describe your innovation.
Bryce Deeney: equipifi connects with credit unions to leverage its data to send BNPL [Buy Now Pay Later] offers to consumers via their existing banking app on purchases made on cardholder debit cards. When a consumer makes a purchase on their debit card, equipifi’s integration with the credit union’s banking core accesses their account and debit card transaction information. The data is fed into equipifi’s decision engine, which uses a propriety algorithm and the credit union’s eligibility parameters to generate and automatically send BNPL offers through their digital banking platform to debit cardholders. In this same app, the cardholder can view and agree to the payment plan in seconds and have cash deposited by their bank back into their checking account. The cardholder can access everything BNPL from their credit union with no additional downloads and no break in their user experience.
What opportunity or challenge does it address?
BD: BNPL is a form of a personal installment loan before, during, or after the point of sale (POS). It is an increasingly preferred way for U.S. consumers to pay, particularly with next gen consumers. Today, third-party BNPL providers like Affirm and Klarna are taking wallet share away from credit unions by capturing the purchase-to-payment journey. equipifi enables credit unions to compete with their own BNPL solution to their debit cardholders, providing a more transparent and financially aligned alternative to third-party BNPL solutions today. It also helps credit unions deepen cardholder engagement, grow market share, increase revenue, and provide a single place to view, accept, and manage BNPL plans on their existing banking app.
In the United States alone, BNPL payments volume reached $127 billion in 2022 and will see a Gross Merchandise Value of $464 billion by 2028. This payment method has emerged as a popular choice with Gen Z and millennials, with the CFPB reporting that 69% of BNPL users in 2021 were next gen consumers. equipifi is the only B2B BNPL solution that enables credit unions to compete with the existing solutions in the marketplace.
How does it increase member value?
BD: Our product is not only safer for consumers to use but also comes from a credit union they trust and can be tailored to their financial and shopping needs. They can see everything in one place without opening new accounts, downloading new apps, or changing purchasing and payment behavior. This is the first B2B product in history that can convert debit card purchases into installment loans.
What differentiates this innovation from competitors?
BD: equipifi is setting up credit unions to displace third-party B2C BNPL providers with their own, white-labeled product. Our platform enables credit unions to use account data, transaction visibility, and cardholder relationships to provide BNPL offers that are in alignment with the debit cardholder’s financial goals and health. This addresses major concerns the Consumer Financial Protection Bureau noted about the data security and spending ramifications in BNPL solutions today. What’s more, B2C BNPL only captures loans taken on by consumers through transactions made at the point of sale. Credit unions, with access to the entire debit card transaction history, can write offers for BNPL from a much larger pool of transactions.
Pulsate
Describe your innovation.
Sarah Martin: Pulsate enables credit unions to increase wallet share and deepen member relations through their mobile channels. We give credit unions the power to get the right financial offers out to the right members at the point in time they need them.
Every credit union wants to be there for their members when they need them. But with rise of online and mobile banking, it’s hard to have that personal insight and understanding of what members need and when. Often, there is no choice but to offer everything to everyone and hope something sticks.
This is the problem we fix — we help credit unions reach their members with the right offer at the relevant time and place.
How do we do it? We start with using rich data and behavioral insight to understand what members might need. We then use location insights to understand when they might need it, and then we streamline and automate the process of getting that offer of help to them directly at their moment of need through mobile — be that push notifications or personalized messages delivered via the mobile banking app.
For example, a member that has had a mortgage with you for the past few years might want to upgrade their home, but how do you know? With Pulsate, we can profile members eligible for a HELOC — which is a good start — but how do you know if that’s something they really want? Using our location-based insights, we can tell if they are looking in home improvement stores or the like, and we can reach them right there, letting them know the credit union is there to help should they need it with a great offer just for them.
The same goes for any type of offer — be it a loan, an account deposit, a credit card, or even vehicle repair insurance. But with Pulsate, you can go even further than that.
Often, people don’t make financial decisions on the spot. So, how do you keep front of mind as your members make their decision? By using behavioral insights, Pulsate can understand where members are in their decision-making journey and automatically trigger the “next best message” based on their real-time actions. And at every step of the way, we provide a frictionless experience with one click to activation at each stage of their journey.
The result — members feel understood and valued and credit unions get the right offer out to the right member at the right time, increasing engagement and wallet share.
What opportunity or challenge does it address?
SM: The opportunity lies in better serving members in the mobile world. The challenge we address is understanding what members need and when they need it — to be there for members at the relevant time and place with the right offer of financial support in their moment of need. It creates the opportunity to deepen relationships, increase loyalty, and serve members better, helping increase competitiveness and wallet share.
How does it increase member value?
SM: Pulsate enables credit unions to increase the value they bring to members by delivering the right offer of financial support at exactly the right time based on their individual needs. It makes their decision-making process simple by delivering the information they need based on their behaviors and streamlines the experience with one click to activation at each stage of the process.
What differentiates this innovation from competitors?
SM: Pulsate enables credit union to deliver a seamless one-to-one member experience in the mobile channels. The combination of data, behavioral, and location-based insights provide a unique member experience unrivaled in the market place. Resulting in higher member engagement, deepened relationships, and increased share of wallet. Our credit unions report up to 55% uplifts on offers delivered through Pulsate’s push notifications, in-app messages, and newsfeeds.
And it seems to be resonating with the industry — the more than 200 financial institutions that use Pulsate represent more than 10 million consumers.
SYFRR
Describe your innovation.
Scott Goessling: SYFRR humanizes digital lending by building technology to do technology things so humans can focus on being human during the most needed and impactful moments. SYFRR helps clients move quickly through important, and often time sensitive, decisions with less anxiety and complete trust using the latest developments in artificial intelligence, neural networks, machine learning, and high-speed algorithms.
SYFRR’s web-based application replaces multiple slow, error-prone, disconnected processes and systems with one highly integrated, real-time, end-to-end lending automation platform. The platform completes all underwriting processes, dynamically matches product, optimizes pricing, automatically creates all required lending documentation, and sends it to the borrower’s email in less than three minutes of the borrower starting the application.
What opportunity or challenge does it address?
SG: Teams are overloaded and unable to handle the additional loan volume required to significantly increase revenue and profitability. Team morale, limited team capacity, and confining technology slows opportunity and membership growth. Traditional products, services, and pricing are forced to compete with modern-technology-driven, fast-moving, highly capable competitors.
SYFRR creates 500-600% more opportunities with 15-20x return on investment when compared to traditional models. SYFRR’s automation reduces the workload on existing teams, increases loan volume, dramatically increases profitability, reaches potential members, and improves team morale quickly. SYFRR’s automation, advanced decisioning, and edge lending options provide more opportunities at exponentially higher margins than traditional lending approaches.
How does it increase member value?
SG: Increased opportunity and increased profitability are critical for member value creation. Previously unreachable or unprofitable clients become easily reachable and highly profitable in fractions of a second when using SYFRR’s latest developments in artificial intelligence, neural networks, machine learning, and high-speed algorithms.
Every credit union large and small wants more members, more borrowers, and, ultimately, better experiences for not only the members but also the employees working hard to help the members. Generally, more work and documentation are required when applicants are denied than when they are approved. Many more members could be approved with additional data and a look beyond scores and paystubs. Automation and modern technology make this possible and very profitable.
Previously loss-leading loan specials and microloans (<$2000) become highly profitable. Previously staff-draining processes become automated functions. Loan officers and specialists now have more time (+90-95%) to help those identified as within reach. Profitability increases significantly because product and pricing are matched and optimized to borrowers’ unique situations while lowering risk and safely increasing affordability. Credit union employee morale increases. Member satisfaction is much higher. Nearly every metric and key indicator reflects positive change.
SYFRR’s custom QR code technology and the ability to integrate with any core provider provides many more opportunities for lenders to meet borrowers on every device, for every transaction, at every minute of every day. In-platform marketing and cross-selling capabilities help lenders find and create profitable opportunities at every client interaction. Unified omni-channel experiences increase trust and confidence while simplifying and accelerating the lending process.
What differentiates this innovation from competitors?
SG: Gathering, organizing, navigating, and ultimately applying the thousands of potential data points applicable to optimal decision-making is out of reach without technology. Current market solutions are unaffordable for nearly all credit unions. Credit unions don’t have large technical, integration and development teams needed to implement current available solutions. Credit unions don’t have 6+ months to wait for implementation to complete and profit to start. Credit unions also cannot accept the risk of very complicated, hard-to-exit contracts heavily favoring the service provider. SYFRR can provide artificial intelligence, neural networks, complex algorithms, machine learning at the highest levels of data encryption all within a highly automated process that easy for the borrower and the lender. The service can be implemented in less than 3 hours with no long-term contracts on a pay-as-you-go consumption model. SYFRR is the only end-to-end, self-contained, lending automation platform that can integrate with any core, add new members, complete underwriting, dynamically match product and optimize pricing, and automatically create and deliver signature-ready documentation within three minutes of starting the application. Profit begins day 1. Implementation is completed in only a few hours.
Current lending models are built to minimize risk. Traditional lending solutions are designed to say “No.” “Yes” is a last resort. Today, loan default rates and charge-offs have dropped by more than 50% in the past three years to 0.69%. Risk is no longer the issue — finding and cultivating opportunity is.
Some buyers fit the mold; they fly right through. These are often the lowest margin clients. They shop all over town knowing they can demand the best terms and the lowest rates possible. Some applicants cannot be approved regardless of creative terms or solutions. Traditional lending throws out a very large band between those two types of borrowers. This group of applicants represent the largest, most accessible, highest potential margin opportunities available. SYFRR is built to assemble the most accurate story possible for each of these people as they try to achieve their goal or navigate their unique set of circumstances. For us, it’s about the people and their story. To us, they are far more than a score and a check stub.
