Cinchy Liberates Data for Houston’s First Service Credit Union
By Roy Urrico
Data is an important commodity that many credit unions struggle to utilize. The $1.4 billion Houston-based First Service Credit Union was looking at 18 months to two years’ worth of programming to converge data from multiple sources in order to access and leverage as much data as possible. Instead, the credit union found the Cinchy Data Collaboration Platform - Credit Union Edition and was able to write reports using newly accessible data within a month.
“What's interesting is that in credit unions in general, data analytics is a very nascent idea,” said Ty Robbins, chief data officer (CDO) at First Service. He knew to merge as many as 15-20 different data sources with off the shelf technologies and write a data analytics program was an arduous task.
Robbins reasoned “somebody smarter than me has done a better job of coming up with a platform for that kind of convergence. And literally my very first Google search last summer led me to Cinchy and we just kind of hit the ground running, understanding one another, understanding the potential. We signed the contract on December 31st (2022) and had the platform installed by mid-February. And I was writing reports within two to four weeks.”
Cinchy gathers information from apps and other silos and connects it together in an accessible data network. “At Cinchy our goal is to enable organizations to save money by liberating and controlling their data in ways that were not previously possible,” said Dan DeMers, CEO for Cinchy. The Toronto-based dataware firm specializes in providing its platform for companies seeking to leverage operational data fabric, which according to IBM automates data discovery, governance and consumption.
Helping Credit Unions
In 2022 Cinchy launched a platform specifically aimed at helping credit unions liberate information, maximize limited resources, reduce operating and project costs, and optimize the member experience. Cinchy maintains credit unions are constrained by core banking systems, a growing collection of software as a service (SaaS), and on-premise applications that trap and silo data. This issue severely limits the ability to use this data to improve service offerings for members and drive operational efficiencies.
DeMers noted the traditional financial technology approach involves credit unions using a core system, ancillary systems and spreadsheets. “All of these systems do not natively talk to each other.”
The credit union solution, according to Cinchy, offers a turnkey setup that:
• Connects with real-time data from core banking systems and applications.
• Controls data with features including auto-versioning, auto-backup, auto- protection, auto-correction, and auto-tracking.
• Provides unlimited user access by unlimited users for instant collaboration without the friction of vendor paywalls, IT requests, or any compromise to data privacy.
The new solution also includes pre-built capabilities that supports real-time collaboration; controls framework that simplifies and universalizes data access controls and guaranteed data governance; and offers solutions that deliver member insights, including 360-degree views, by leveraging liberated data from unlimited sources.
The Cinchy CEO explained instead of integrating systems to each other, they integrate them to and from Cinchy because it gives you composability. First Service runs the Cinchy platform, which is available as on-premise or as a cloud solution, on-prem. “We do support either, but it's always self-hosted where we as an organization never get access to our customer's data.”
Finding a ‘Unicorn’
In describing the Cinchy platform Robbins said, “It is not a data warehousing platform on its own, although you could use it as that; it is not an integration platform on its own, although you could use it as that.” He added, “The innovative way that they have taken the notion of the data network and abstracted it from just the raw data into a usable model based on metadata is really unique across all data industry, but specifically unheard of to credit unions.”
Added Robbins, (“Cinchy) is kind of a unicorn, when it comes down to its capabilities.” He suggested part of the struggle for analytics adoption for credit unions revolves around cost. “The tremendous amount of potential and value of Cinchy at their price point, people have never seen before. It is very, unique.”
Robbins pointed out that he wanted to demonstrate Cinchy’s ease and effective use of analytics to First Service’s executive and senior management teams, so he would have the freedom to expand on the rest of the value proposition once they understood the platform. “I produced a handful of reports and it went from people saying, ‘what does that guy do anyway?’ to within a month, having a queue that grows by about 20 requests a week for more and more useful data.” The CDO said “Now all of the other things I wanted to do are being driven by business needs rather than me saying that ‘this is an important thing to tackle.’”
Results and Benefits
Robbins pointed out one report producing benefits already is a member information map First Service’s chief operations officer uses to create targeted member lists for branch managers to cultivate. “That effort alone has generated tens of thousands of dollars of new deposits and retained deposits. That is just one benefit. A direct result.”
Robbins noted another benefit unheard of in the credit union industry is the asset and liability management committee (ALCO) use of near real-time data. First Service’s lag time is about three minutes based on transactions happening in the branches and online.
“That's where you make decisions on interest rates, both on the deposit side and the loan side to remain competitive and or generate campaigns,” he said. Previously, the ALCO team would look at financial data as much as a quarter or a month in arrears. "We’re now able to make more concentrated, granular and meaningful interest rate decisions based on (real-time) insights.”
Typically call reports use ancillary software systems to generate the data that the credit union sends to the NCUA, Robbins explained. He noted some credit unions still struggle to validate what comes out of the call report product, and he envisions that Cinchy will be able to produce a valid call report for First Service.
Responsive to Business Needs
Robbins admitted, “If I were doing this with a standard warehousing product, or if I were doing this starting from scratch, and building a data lake, I would not be nearly as responsive to the business needs as I can be with Cinchy. I am responding to business problems nearly in real time. It has been revelatory to work with a body of data in such in such a dynamic way.”
Robbins pointed out there is often difficulty amongst different business leaders in a credit union, or any organization when it comes to building trust in something new. “Cinchy has allowed us to build that trust far more quickly than I've ever experienced.”
First Service uses KeyStone from Corelation as its core system. The first step was to liberate the data from their core, which is obviously the bulk of their data. The main reason for that, according to both Robbins and DeMers, was to enable the credit union’s management team to access that data in a real-time manner. Not end of day, not intraday, but genuinely real time.
DeMers explained, “People can now go in and access dashboards, and those dashboards can be built where the data model of Corelation does not limit them. When the data's liberated, it can then be blended with other data and even within the core itself, because it is all based on the relationship of data.”
DeMers added that the Cinchy Data Collaboration Platform - Credit Union Edition can run anywhere credit unions want. “Let us say they have a core platform, maybe they have a separate CRM (customer relationship management) system, a separate loan origination system, and some spreadsheets.” The Cinchy platform can synchronize with each of those sources directly, DeMers explained. “Credit unions do not have to connect those systems to each other in order to facilitate sharing of data across different use cases. “
Working with CUFX
Robbins observed that credit unions in general are somewhat lagging technology users. ““That is why I became an architect of the CUFX (Credit Union Financial Exchange) standard and have been from the outset." CUFX is an open standard protocol for exchanging financial data.
“Liberating data, having data available to you in a more usable and democratic format, has always been the idea of this standard of CUFX. Finding a platform that can capitalize on it has always been a challenge,” said Robbins. “With my partnership with Cinchy, we are actually working on getting this CUFX standard into the platform that's being constructed for the credit union industry.”
DeMers said, “The way that we're collaborating as it relates to CUFX, is taking the concept of model standardization to enable portability of solutions.” He added, “Where origins (of CUFX) centered around enabling cross organization collaborations between credit unions and fintechs and other such things. But here, we are talking about going further and even inside of a credit union, how the systems talk to each other. So basically, forcing everything to speak a common language.”
Demers further explained, “So I can use Cinchy to implement a CUFX model that covers not only the external interfaces, but even the internal interfaces. But it is all in the goal of creating an ecosystem that allows collaboration and reuse across the industry. Given the nature of how credit unions operate, there's inherent desire to do that in a way that does not trap or silo or put information security at risk. It just facilitates this collaboration.”