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  • Writer's pictureJohn San Filippo

Industry Leaders Forum: Budgeting Tactics and Strategies, Part 2

By John San Filippo


Finopotamus has assembled a panel of experts in a recurring series, The Industry Leaders Forum (ILF). Each month, we’ll ask the panel a broad technology question and share their informative responses. Respondents are presented in alphabetical order by last name.


Presented in three parts, part 2 includes responses from:

For June 2023, Finopotamus asked the ILF panel:


Budget season will be here before we know it. What tactics and strategies should credit union technologists consider to ensure they get the most bang for their tech buck in 2024?


Apiture’s Chris Cox

Chris Cox

Credit unions are challenged to maximize their technology spend in an increasingly dynamic and competitive environment. When evaluating your investment for next year, consider the following to identify priorities and optimize the impact of your dollars.

  1. Review your current strategy to identify technology implications and potential gaps. Given recent liquidity challenges faced by many institutions, your credit union's overall strategy may have shifted in recent months. An increased focus on deposits, for example, may prioritize investment in a robust digital account opening solution, while support for cryptocurrency trading and investment may be deprioritized as interest here has waned.

  2. Focus on the member experience. Many credit unions are saddled with decades-old core banking solutions; however, upgrading is both costly and time consuming. To maximize dollars, consider focusing on the user engagement layer first to solve member or employee problems. Upgrading to a more modern digital banking solution that integrates with your existing core, for example, can dramatically enhance the member experience — without a costly core conversion.

  3. Evaluate emerging technologies. Cornerstone Advisors' What’s Going On in Banking 2023 report notes that one in four credit unions plans to invest in chatbots and conversational AI this year. In addition, investment in APIs continues to grow. Real-time payments is another category that deserves evaluation as FedNow prepares to launch its solution.

  4. Maximize the use of data. Effective use of data can support risk management, decision-making, and a positive member experience. By investing in advanced data intelligence tools, you can gain meaningful insights about your business, even if you lack a large data analytics staff.

  5. Monitor current vendor contracts for auto-renewal language and end-of-term dates. For larger investments, allow for a 12-to 24-month decision-making process that incorporates time to run an RFP process and negotiate, in addition to time for implementation and migration. Be sure to understand your existing vendors’ ongoing commitment to their solutions. Plans to end-of-life or sunset a product can have a significant impact on your business.

With a strategic approach to budgeting, your credit union can enhance the member experience, streamline operations, and support growth in an increasingly competitive market.


Co-op Solutions’ Bruce Dragt

Bruce Dragt

Technologists should not overlook the credit union’s payments portfolio when seeking to optimize solution investments. It contains a wealth of revenue and cost-saving possibilities capable of buoying budgets when unexpected costs arise.


Four strategies for getting the most out of your payments products and services include:

  1. Review metrics. What’s measured becomes what matters. Payments programs with trackable KPIs naturally perform better. That’s because the team is held accountable – perhaps even rewarded – for delivering operational and financial outcomes. Are you currently tracking the right metrics to generate the right outcomes?

  2. Empower people. Of course, rewarding people for great metrics requires that they are first identified and then empowered. Take time to ensure that the talent responsible for growing your payments revenue is the right talent, and that they’ve been properly set up for success.

  3. Listen to the data. Business intelligence is about finding the stories within the data, listening to those stories and then responding appropriately. Lend payments data your ear. What is it telling you about member behaviors and preferences? Are you missing opportunities to better serve the day-to-day lifestyle needs of your members?

  4. Don’t discount digital. Physical card-not-present transactions continue to dominate member purchase behavior. Is your current digital approach driving payments and engagement?


CU 2.0’s Kirk Drake

Kirk Drake

  1. Understand how the accounting department will book the technology acquisition. Most will use depreciation. In my experience, knowing how to present your solutions to match how accounting will book them is one of the best strategies for success.

  2. Understand the value of cash. Credit Unions can pay upfront and structurally be very creative with their payment terms in a way that really helps companies. Knowing that can greatly change the discounts and terms you receive.

  3. Do not sign anything over a few years. The world is changing to fast.

  4. Stop looking for fully integrated solutions on early-stage things. Try things at small scale and then ramp them up. Don't spend big only to find out that four members use it.


ASA Technologies’ Landon Glenn

Landon Glenn

Credit unions understand the importance of adopting new technology to improve the member experience. However, they currently face several challenges to do so effectively. The burden of innovation has historically fallen on credit unions’ shoulders, leaving them to complete one-to-one technology integrations that are extraordinarily costly and time-consuming due to factors such as vendor due diligence, contract negotiations, implementation strategy, ongoing vendor maintenance, etc. Plus, credit unions struggle to ensure the technology being implemented will apply to a wide enough percentage of their member base for the investment to be worthwhile.


To optimize budgets next year, credit unions should reevaluate their tech strategy altogether. Instead of continuing to rely on burdensome and costly one-to-one, fintech integrations, an embedded fintech strategy through a collaborative banking approach can help them more efficiently and effectively deliver the latest innovation and tech to members – all while reducing liability and risk. Such a model leverages APIs to connect fintechs to credit unions through a third party that tokenizes, normalizes and anonymizes all member data before it is shared with fintechs. Suddenly, credit unions can be the gateway to a secure marketplace of member-facing apps.

Prioritizing embedded fintech can enable personalization at scale, offloading the burden of innovation away from credit unions while allowing members to choose and download the niche apps they want without diluting the credit union relationship. And it gives members more control over their data and identity, which continues to be more important. For credit unions interested in how to make their tech dollars stretch further, without sacrificing innovation, compliance, security, or the member experience, we strongly encourage them to evaluate collaborative banking.


Union Credit’s Barry Kirby

Barry Kirby

Prioritizing the secure acquisition and service of new members will help maximize credit unions’ budgets in 2024.


Member acquisition is vital to credit unions’ growth. But strategies for engaging with and acquiring new members are changing due to technology innovation and shifting consumer demands. With 78% of banked Americans opting for digital banking, credit unions should prioritize spending on digital acquisition strategies for winning over new members.


However, this shift to online platforms brings on the risk of fraudulent activities. Unlike the relatively easier task of preventing malicious actions in-branch, credit unions now face the threat of hackers using fake identification and synthetic IDs to open fraudulent accounts and apply for loans.


To address this challenge, credit unions should adopt a strategic approach aimed at attracting real, creditworthy individuals while proactively detecting and preventing potential fraud before it enters their institution. This involves investing in modern, real-time technology that leverages data and analytics to construct detailed customer profiles and matches them with credit bureau data via soft credit checks. Credit unions can then validate consumer identities, verify the creditworthiness of individuals, and facilitate pre-approvals, thereby streamlining the onboarding process and acquiring strong, trustworthy members.


By prioritizing fraud reduction and extending financing to individuals with good credit, credit unions can establish enduring relationships that foster a secure, healthy member base and facilitate long-term growth.


Corelation’s Rob Landis

Rob Landis

Budgeting for technology can be especially tricky in that it requires a balance between long-term strategic planning and responsiveness to short-term trends and opportunities. Ideally there are sufficient funds not only for the fundamental needs that can be identified well in advance, but also some monies held in reserve to allow the flexibility to strike when a tactical opportunity arises. To persuade leadership of the value of the latter, technologists first need to prove they are prepared and efficient when it comes to the former.


To do so, technology leaders should ensure they're attuned to the big picture goals of their credit union in the next three to five years, as well to check for any expiring contracts with crucial vendors in that same timeframe. If they can align those data points, they'll be able to point out windows for investment opportunity beyond a one-year time horizon.


With a strong sense of the right timing in place, the business case for investing in better, more modern technology writes itself. Improved software and infrastructure is the key to maximizing efficiency, getting more out of every other resource at the credit union, and ultimately providing a superior member experience. Pick the right core; surround it with the unique mix of ancillary products and services that best meets the needs of your membership; and weave them together through tight, flexible integrations. There's no better formula for success.


Praxent’s Kristiane Mandraki

Kristiane Mandraki

Too often, credit unions fall into the trap of trying to be all things to all people, which results in generic digital experiences and exhaustive mediocrity.


To make the most out of tech spend, credit unions must first understand what sets their individual institutions apart, their niche, and then prioritize resources in that area. Often, the differentiator has something to do with the member experience, yet we commonly see credit unions select off-the-shelf software for member-facing digital interactions. This results in a digital experience that mirrors the institution down the street instead of one that’s unique or compelling. While off-the-shelf products have a place, such as for back-office functions, they often fail to spark strong member loyalty or engagement.

Building a custom front-end to acquire and serve members has historically been cost prohibitive and risky, however with the help of a rapidly expanding variety of composable application programming interface (API)-first fintech building blocks, developing a custom, seamless digital experience around the member is more accessible than ever before.


Credit unions that carefully consider their competitive differentiator or unique niche, and then prioritize technology budget in that area, will be well positioned to optimize their tech spend and strengthen member loyalty.


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