Jovia Financial Leverages Union Credit to Grow Membership in New Ways
By John San Filippo
Westbury, N.Y.-based Jovia Financial Federal Credit Union ($4.5 billion in assets; 232,000 members) won the 2024 Tekkie Award for Member Growth based on the credit union’s implementation of the Union Credit lending platform to provide loans where members and prospective members need them, at the point of sale. Finopotamus spoke with Chief Revenue Officer/Chief Lending Officer Casey Mauldin to learn more about this effort.
Union Credit is an embedded finance platform that makes firm offers of credit to members and prospective members as they traverse various high-visibility websites. Asked to comment on what initially attracted Jovia Financial to Union Credit, Mauldin told Finopotamus, “From a strategy perspective, we were looking at what do we want to be when we grow up? When you look at your net interest margins across the country, the thinnest margins are Long Island, N.Y. And of course that's the area we serve. It is for obvious reasons why: financially sophisticated, low delinquencies, you've got great balances in the accounts. But it’s also heavily saturated with other financial institutions, including larger credit unions.”
In the summer of 2023, Mauldin happened to run into Union Credit co-founder Barry Kirby, who Mauldin knew from Kirby’s days at CuneXus (now TrueStage Digital Storefront), another vendor currently deployed by Jovia Financial. “We were invited in on the initial pilot phase to be able to test out [the Union Credit platform]. The communication with the folks over there and I'm not a paid spokesperson at all for Union Credit – but the communication was outstanding. The follow up, the development of the guardrails that were associated with it was, it was probably one of the better vendor relationships I've ever had.”
Expanded Charter, Expanded Lending
To expand outside of its geographic area, a community credit union must of course expand its charter. Jovia Financial achieved this through an acquisition in 2022 of a credit union with an existing national charter.
“The one thing that we are taking a look at is the concentrations within certain regions,” said Mauldin. “Also, you start looking at the product sets associated with it. So, everything is currently under the microscope. But we have members all 50 states.”
Complete Control
Finopotamus then asked Mauldin to comment on the amount of control he has while using the Union Credit platform in terms of what venues offers are presented in and the geographical areas in which they’re presented. He said Union Credit offers a high degree of control. “They take all that into consideration,” he said. “If you were restricted to a state geographic region, SEG, any of that stuff, they're able to put that in there. It follows your current credit parameters as well. The campaigns are 30-day campaigns. So, if you choose offer a specific product set, you don't need to worry about a yearlong commitment or anything like that. You can pivot fairly quickly.”
On the topic of success to date, Mauldin said, “We found success in the credit card and the consumer unsecured space, and we've started to tap a little bit into the home equity side. But then you have to look at the restrictions that certain states have with real estate, like with New York specifically, we are wet signature based. So, it is a little bit more complicated than if it were to offer something where you could eSign.”
According to Mauldin, Jovia can set monthly thresholds by loan product. “What you'll do is set your threshold whether you want so many clients or so much dollar amount,” he explained. “For instance, on our consumer unsecured personal loans, we set it at $10 million a month and that's our internal capacity.”
What About Risk?
Finopotamus asked Mauldin whether, given that Union Credit is making a firm offer of credit on behalf of Jovia Financial, there’s any extra risk involved for the credit union. He said that all lending parameters are provided by the credit union, so there is no extra risk.
“It's not so much with the Union Credit side of it,” he said. “It's our credit parameters and also the identity software that everything's pulled through. From a platform perspective, Union Credit is just the method to get the data from TransUnion to us to run through our systems. It's more like they're the highway than they are the tollgate allowing it to come through.”
Mauldin said that expanding its loan programs to a national level has forced Jovia Financial to be even more diligent with fraud prevention and detection. “What we put heavy focus on with this is the member journey, but also making sure that from a journey perspective, we're bringing the right members on,” he said. “We have a very watchful eye on the fraud. You think a lot of these channels are pretty clean, but some of the fraudsters are pretty smart to the point where it's helped us be able to start to better control the levers when it comes to the fraud prevention software that we utilize.”
Mauldin concluded, “For the folks that are entertaining going down this path, embedded finance is a very sexy word right now. Make sure from an organizational perspective, you've got the ability to handle the capacity. Make sure you understand the journey on top of it because even though you'll get those members driven to you quickly, if that journey hasn't been mastered, it's going to cause friction within the organization as well as with that member.”
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