In what is a recurring feature, Finopotamus will profile interesting and intriguing tech professionals who are positively impacting the credit union industry.
For this issue, we spent time with Payrailz CEO Fran Duggan. The Glastonbury, Conn. –based company’s central mission is making the digital payments experience smarter and more engaging.
By W.B. King
While Fran Duggan hasn’t held a technologist title like “programmer,” he has spent more than 30 years investigating, developing and applying technology solutions that solve real-time problems.
“I have always been a gadget person and get excited about how technology can improve how we work and live and deliver the most precious resource humans want: time,” he said.
In Duggan’s view, one way in which technology departments have changed is that today’s executives “need to have a clear understanding of the business side of the business,” because the “tech side is no longer a support function, but often a central part of the company.”
And as the financial services industry moves further into the digital age, he explained that the “data side of tech is becoming increasingly important and how you manage, secure and leverage that data is becoming critical to success.” Duggan pointed to Amazon, Google and Facebook as examples of tech companies that are essentially “data management and artificial intelligence (AI)-focused” organizations that credit unions should emulate.
Another key change in the tech space, he said, is the need for organizations to integrate. “IT used to build a one-off, stove-piped solution for solving one particular problem. That thinking was considered okay and that’s how things were built. Today and going forward, the ability to integrate technology solutions and leverage data to be able to provide the services that members want is critical,” he said.
“For a technology leader to see how the all pieces fit together and making them fit is a very different role than being the manager of building solutions,” he continued. “Tech managers need to be more like architects than the traditional role of being the construction manager.”
Evolving with Technology
After earning a bachelor’s degree in economics from Harvard University and an MBA in general management from Boston University Questrom School of Business, Duggan held numerous positions in the financial services industry, including a 10-year stint as an executive at Webster Bank. At this post, he designed and oversaw the development of online banking and payment applications. He later founded Payveris and served as its CEO for nearly six years. Launched in 2011, the company offers online and mobile payment solutions and a cloud-based payment platform with a full suite of API’s for bill Payment, A2A and P2P services.
“I get excited about the possibilities of technology. You are never done building because technology continues to evolve,” said Duggan who assumed his current role as Payrailz’s CEO in 2017. He added that 40 of the company’s 65 employees work in tech-facing roles.
“We all thought – and some still do – that the Internet and mobile phones are the ultimate, but I see artificial intelligence as another breakthrough or revolution in technology,” he added.
The concept of AI learning and adapting from user data is not only exciting, noted Duggan, but it is still in the early stages of development.
“Think about an AI application that helps members manage their daily finances, such as paying their bills, putting money savings, finding way to save money on everyday bills and purchases and overall removing that financial burden that is the number one source of stress to the average person,” he said. “To me, that is a game changer, not because the technology is fascinating, but because of what it can do to better people’s lives.”
Creating forward-looking digital relationships will be “critical to business success,” Duggan said. He added that credit unions have a lot of potential to gain traction. He noted, however, that credit unions also “need to act upon it. Otherwise, others will.”
Older credit union members, he explained, enjoyed the “personal relationships and visiting their favorite teller.” And while he said younger consumers who grew up in the digital age also value a “personal relationship,” they want it to be “digital in nature” as opposed to face-to-face in a branch.
“There are two main things credit unions have that every other industry would love to have: data and a trusted relationship with their members,” he said. “That is why technologies like AI will be critical for credit unions to continue to survive and thrive.”
Fintechs in the Credit Union Space
As a fintech executive, Duggan explained that he has always felt welcome in the credit union industry. This notion hasn’t always been the case for his peers. But and as more time passes, he senses that a growing number of credit unions “understand why it is important to partner” with like-minded fintechs. To this end, Payrailz and its affiliated CUSO, CU Railz, count 14 credit unions among the clients using the company’s payment solution.
“We are having a lot of success with those more progressive credit unions who realize that the time to act is now,” said Duggan.
Payrailz has been able to work well with credit unions, in part, by adopting and incorporating the “people helping people” philosophy into the company’s culture, noted Duggan. When asked if most fintechs understand this critically important component to successfully operating in the credit union space, he chose his words carefully.
“I don’t want to speak for all fintechs, as I know there are definitely some that do not understand that fundamental belief. At Payrailz, we have that same core belief, and it is why we are a client-funded organization, meaning we can be more client focused,” Duggan said.
“This funding approach is different than many other fintechs and they are caught in conflict between their clients and venture capitalists,” he continued. “We eliminated that issue and put in a structure that allows us to focus on helping our clients succeed, as that is in the best interest of our clients, our company and our investors.”
In early October 2021, CU Railz secured a $5.4 million investment from Curql Fund. Designed and launched in 2020 to encourage dialogue between fintech companies and credit unions, it is the only venture fund exclusively comprised of credit unions.
“We can make so much progress when we are all focused on the same goal – helping credit unions succeed with the best technology available,” said Duggan. “We are proud to have been selected by Curql and are grateful for their support of our vision. We look forward to working with an organization that shares in our mission and core values.”
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