Co-op’s THINK 22 Explores How CUs Can Use Data to Better Engage Membership

By W.B. King


Before questioning a panel of industry experts on “How to Know Your Members Like Never Before,” veteran financial journalist and session moderator Jean Chatzky shared results of a conference poll that was taken in real time during the Co-op Solutions’Think22 Conference. The first survey question asked: What do you think has the most impact on your credit union being member-centric today?


“Offering the latest digital solutions was the number one answer, followed closely by providing a friendly, accessible customer service experience,” Chatzky reported from a conference hall stage located in the Sheraton Grand Hotel in Chicago, where 627 credit union industry attendees gathered from May 2-6. “In other words: digital and empathy.”


Prior to joining Advantis Credit Union five years ago, senior vice president and chief experience officer Christopher Groshko said the $1.9 billion Portland, Ore.-based credit union was doing a fair job when it came to knowing its membership, but noted that there was work to be done.


From left to right: Co-op Solutions' President/CEO Todd Clark, Advantis Credit Union's SVP/CXO Christopher Groshko, Ellevest CEO Sallie Krawcheck, Humane’s Product Architect Ken Kocienda, and Moderator Jean Chatzky.

“We didn’t really understand the voice of the member. What we changed is that we have a much more robust process for gathering that feedback and input,” he said of the credit union that serves more than 85,000 members at six branch locations. “So, voice of the member and how we can continue to step that up is very important within a software and vendor partnership.”


Another important initiative, Groshko added, has been focusing on product offerings. And while he said that “you can’t be everything to everyone,” Advantis Credit Union has become increasingly focused on feature functionality in the digital realm.


“Whether it is a segmentation exercise that is with a member that is in the bullseye of our target or strategic plan,” he said, “we are really listening to the data, the research and understanding how to deliver on that experience.”


To Understand Data is to Understand Members


Building on Groshko’s point, Co-op Solutions President and CEO Todd Clark said it is imperative to recognize the value of the aggregated data that a credit union has at its disposal.


“When you started to really listen and compile the data around all the individual interactions, the anecdotal evidence — it only took me a few weeks of interviewing CEOs to have the story line down,” Clark said, reflecting on a survey Co-op conducted five years ago. “We needed to change. Recognizing the value of that data and do something about that is a big part of it.”


The Rancho Cucamonga, Calif.-based CUSO’s mission is connecting credit unions to the technology, strategic partnership and scale needed to best serve respective membership.


Among initiatives Co-op has recently undertaken is getting “deep” into machine learning, Clark explained.


“We do eight billion transactions a year for all of our credit unions. There are hundreds of data elements in every one of those transactions,” he continued. “Each one of them means something different and some don’t mean much at all. But there is a lot in here to help credit unions understand their members better.”


When Chatzky asked Clark what the data is most used for, he responded: fraud. Whereas members used to be placed into categories, such as gold card or silver card members, Clark explained those categories don’t speak to the complexities of today’s transactions.

“There is no way a human can sit down and write enough rules to capture the fraud they need to capture and make you feel safe — machine learning can do that,” he said, adding that there are now tangible and data-proven reasons why a transaction is declined or flagged.


“It used to be that we would delete data — 10 or 12 years ago — because it was expensive to store. It’s not expensive to store. You should be keeping several years of data on all of your members, all of the time and then figure out how to use it,” Clark said.


“Data culture starts with governance and just like everything else, you have to decide what that data should look like and then make sure you get it there,” he continued. “Then you can apply the tools to the top — machine learning any everything else, but you have to start with a data governance discipline.”


Pushing for Better Data Understanding


Truly understanding the member experience has been an even more important issue in recent years due to the pandemic, Chatzky offered. She asked Groshko to speak to how Advantis Credit Union is responding.


“I don’t think that any of us have found a magic bullet for that. We are very traditional in the participation and outreach we do in the community and getting our story out there,” Groshko said, adding that this outreach includes making the case as to why your organization is different.


“I can’t tell you, on a monthly basis, how many members that I may speak to that in the conversation they reference us as a bank,” he continued. “Now, I grew up in Bank of America and in community banks — I’ve done the path. I know the difference, but it’s about getting that message out there to folks.”


One way Groshko said branding can be strengthened is by not simply being an “order taker.” After the desired banking transaction is completed, he said the challenge is determining how to take that relationship — that individual within the community and who is a representative of that community — further.


“Credit unions live or die on word of mouth,” he said.


An Apple Perspective


Prior to becoming Humane’s product architect, fellow panelist Ken Kocienda served for 15 years as a software engineer and designer at Apple, working on the software teams that created the original versions of the Safari web browser, iPhone, iPad and Apple Watch. After departing Apple in 2017, he authored the Wall Street Journal bestselling book, Creative Selection: Inside Apple’s Design Process During the Golden Age of Steve Jobs.


When it comes to determining what a consumer wants, Kocienda said it is best to design products that the developer wants to use because it implies inherent value.


“Perhaps the biggest part of the product philosophy we had at Apple was that we wanted the thing to be great — obviously great. And we had an advantage in that we were making a product that we ourselves were going to use,” Kocienda noted.


Founded in 2017, the San Francisco-based Humane’s mission is designing and engineering a new class of consumer devises and technologies. And like the Apple model, Kocienda still believes that beta testing in real-time expedites functionality and desired user-ability.


“When I say collaboration or demos, you know what that was [at Apple]…here, I just made this. Try it. Focus in on the person as they are trying this thing,” he said. “I love hearing the word community [today] because it really is about going out and engaging with the people that are both like you and different from you,” he continued. “I work in software but I jumped at the opportunity to come and be with you all here today because it is an industry and a world I don’t know anything about. So, it is an opportunity for me to learn about new and different things and bring that into the process of making something great.”


And while Kocienda added that enhancing the member experience with new tech offerings can be considered a “lofty goal,” it is nonetheless the goal to strive for. “Give people you are trying to serve something that is just great.”


Noting that she is a “recovering research analyst,” panelist Sallie Krawcheck, CEO and co-founder of the New York City-based Ellevest, a robo-advisor investment platform and financial literacy program primarily for women, agreed that the user should inform product development, not the other way around.


“Getting the customer inside the organization and really respecting that customer, then bringing the diversity to have all the different points of view [represented] matters,” Krawcheck said.


She added that one of Ellevest’s credos is that "opinions are celebrated," but decisions are made based on data. This approach, she added, includes constantly “iterating and engaging with consumers” on new product offerings.


Don’t Forget About the Human Touch


After fielding a question from the audience regarding limited tech resources at [most] credit unions, Chatzky asked Clark: How can credit unions innovate as fast as [companies] that have access to venture capital?


“We like to think of ourselves, at least with regard to payments and things around payments, like the credit union’s IT shop. We work with these guys [credit unions] on a regular basis,” Clark responded. “We have a lot of credit unions that want to beta test and get out in front of products early in the market because I think what you recognize is that community and that trust that credit unions have falls down if they don’t also back it up with the technology that people are finding on their iPhone every day.”


Kocienda agreed with the panel that the insights derived from data - be it classic algorithms or machine learning algorithms - are exciting and important. He noted, however, that these offerings should be developed with a balanced approach.


“We need to figure out how to use these new technologies when they become available and yet, it’s not the whole story. Keeping in touch with people — keeping that empathetic touch has to be a counterbalance,” he continued. “Since I left Apple, I worked at a couple of other companies where there was this pervasive A/B testing culture to the exclusion of the connection back to people and what they actually want.”


When looking forward at the credit union industry data landscape, Groshko said there has to be a strong commitment to a product and service strategy, which includes identifying risk.


“You have to put money in wherever that is - maybe through a CUSO,” he said. “Define your risks parameters and risk tolerances and then litmus test it [to see] whether you’re living up to it. You have to challenge the process and it starts with us, frankly.”


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