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 Buckeye State Credit Union’s Chief Executive Officer Michael F. Abernathy, Jr. The $101 million Akron, Ohio -based credit union supports more than 16,000 members at six branch locations.
By W.B. King
When Michael F. Abernathy, Jr. began his career in banking in 2001, tech support was generally relegated to desktop support and closed-end cores operating on a disk operating system (DOS). The times have changed, he said, with many Windows-based (and similar) operating systems utilizing open application programming interfaces (APIs) that welcome innovative technologies.
“You see much more on the side of artificial intelligence (AI) and machine learning to help business decision making and to create greater efficiencies in every area of business. This is compared to 20 years ago when an employee had a computer and some hosted data to provide a very basic service to a customer,” Abernathy continued. “Today, there are multiple systems, applications and data sources to customize experiences and provide specific solutions.”
Prior to assuming his role as Buckeye State Credit Union’s CEO in 2018, Abernathy held a number of positions, including a mortgage loan officer at JPMorgan Chase & Co, assistant vice president of lending at Westfield Bank FSB and president and principal broker at Transworld Business Advisors of Canton, Ohio.
Earning his bachelor’s of arts degree from Ashland University and a master’s of business administration from New York Institute of Technology, Abernathy explained that while his role as CEO isn’t theoretically a tech position, innovation and technology factor considerably into his decision-making process.
“My understanding and proximity to the tech profession has had a large influence on how I lead and approach the use of tech at an organizational level,” he said. “I have heard so much about different aspects of tech, including cybersecurity, software, hardware, cloud services, network administration, server management and general help desk level support, and I am able to draw from that information to help my team.”
Buckeye State Credit Union currently has 63 employees, three of which, including Chief Financial Officer Brad Riley, are tech-facing male millennials. Abernathy noted gender and demographic distinctions because they are integral to his inclusive managerial approach.
“Two of them [tech employees] focus more on internal projects and managing vendor relationships. The third is our CFO and he manages the financial side of tech as well as the contract management of each tech vendor,” Abernathy said. “We also work with a marketing firm that manages most of our digital and website exposure. This group of 10-plus are primarily millennial and Gen Z females. They focus on search engine optimization (SEO), Google analytics and social media algorithms.”
When Abernathy assumed his role four years ago, he was 38, and his predecessor, Jennifer Borowy, was just 28 when she stepped into the CEO role. She currently serves as Chief Operations Officer at Michigan First Credit Union. He said these examples are not exceptions to the rule, but rather speak to a movement within the credit union industry.
“What many financial service providers are waking up to is that many credit union boards have turned to younger professionals to lead. Our age group is not tied to a ‘tried and true’ methodology. We are risk takers, and we are willing to try new and different things to disrupt the financial services industry,” he said. “We grew up with technology.”
Noting that his generation “remembers a time without the internet or having information at our fingertips,” he added that once they were widely available, Gen Xers were also the “first adopters” of the internet and social media.
“We see opportunities in technology rather than risk. We see investment in technology while others see expense,” he said. “There is a rebirth in the credit union industry that is quietly taking shape.”
Making the Case for Open Operating Systems
Conceding that the topic of open versus closed systems is not a new debate, Abernathy believes there is a stronger argument to support the former. The closed system construct, made popular by the likes of Steve Jobs and the Apple model, he noted, is antiquated because it doesn’t allow for outside collaboration.
“This can be seen in many operating systems in the past 20 years…many core processors created their own lending, online banking and internal customer relationship management (CRM) platforms. When these core processors released these ‘all included’ packages, it was more cost efficient, easier to manage and consistent for the end user,” he continued. “Unfortunately, as more fintech companies began creating newer and more innovative technologies, many core processing systems could not or would not allow access to their APIs to implement these newer technologies.”
What is encouraging, Abernathy said, is that more core processors are beginning to understand that in order to keep up with emerging technology, it is better to have an open API platform and partner with fintechs.
“There are still processors out there that are hesitant, resistant or refusing to partner with companies that provide emerging technology,” he said. “With the emergence of machine learning and AI, it is becoming vitally important for bank and credit union end users to have access to these technologies to assist in decision making and automating mundane tasks.”
And while he said there is still a long way to go, he is excited to see more “core processors getting on board” and working closely with fintechs. “The tide is turning, and it will give credit unions and banks a fantastic opportunity to deliver more customized experiences to members and customers.”
IT a Needed Voice in Strategic Conversations
No matter how outlandish a tech idea might be, Abernathy encourages his Vice President of IT Jeremy Husted to pitch concepts that could benefit the credit union’s 16,000-plus membership.
“My head of IT and I have been working together for more than six years. I have encouraged him to never feel uncomfortable about bringing me an idea,” said Abernathy, who served as Buckeye State Credit Union’s senior vice president of lending and sales prior to becoming CEO.
“I am authentic with him. I see his vision, and I approve many of the projects he wants to take on because we have developed a relationship and he trusts that I will take him seriously,” Abernathy continued. “He comes prepared to explain how his ideas benefit the organization and our members and is also prepared to answer any push back.”
And the pitching process goes both ways. In March 2016, for example, Abernathy asked Husted to investigate what it would take to create a remote working environment.
“At that time, our credit union was in a dire financial situation, and we needed to consider closing and selling our administrative building as part of a restoration plan,” Abernathy said.
Word came back that moving to a remote working environment wouldn’t be practical and “nearly impossible” given the credit union’s technological platform and financial issues. But with encouragement from the executive team and board of directors, Abernathy said the project was soon greenlit.
“By November 2016, we succeeded in building our remote working program that is still in place to this day and played a pivotal role in our ability to maintain day-to-day operations in the early days of the pandemic as we had already been working from home for more than three years,” he said.
Since 2016, one of Husted’s ideas has patiently sat on Abernathy’s plate: implementing interactive teller machines (ITMs) and exploring deeper levels of virtual banking. And while Abernathy said he has long realized the importance of Husted’s strategy and vision, it has taken a number of years to bring it to fruition.
“Now, in early 2022, we can do nearly any banking function remotely, we have video banking technology in place [not fully launched], and we are aiming to introduce ITMs by Q1 2023 in a few of our markets,” he said. “IT is often left out of strategic level conversations when, in reality, it should be helping to lead those conversations. Therefore, our vice president of IT is involved in every major decision we make strategically.”
Credit Union Tech Tsunami Building
In Abernathy’s estimation, the “greatest credit union strengths” are speed and courage. And for too long, he added, credit unions have wrongly been portrayed as old, slow and weak.
“We have the courage to be unapologetically different …on purpose,” Abernathy continued. “We adopt technology and change quickly,” he said. “We do these things with little to no fear. There is a credit union tsunami building at sea. It is coming, but many have no idea it is on the way.”
Utilizing innovative technologies will “deliver unique experiences” and “put other financial service and retail industries on their heels,” Abernathy added.
“We need more credit unions to stop being like banks and embrace being different,” he continued. “Every day we convert a few more credit unions to this way of thinking and eventually the wave of change will hit the mainstream and a true cultural and technological impact will be felt throughout the financial services industry.”
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