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 visited with Praxent’s Founder and CEO Tim Hamilton. Over the last 20 years, the Austin, Texas-based fintech has delivered over 300 software transformations and helped hundreds of businesses provide a more modern, intuitive digital experience to its customers.
By W.B. King
After being gifted the popular British-built microcomputer Sinclair Spectrum ZX by his father in the late 1980s, Tim Hamilton, then age nine, spent the better part of the day entering six pages of programming code from the manual into the computer’s terminal. Prior to this intriguing event, he was an adventurous kid who loved building treehouses from fallen branches and forts from discarded cardboard boxes. Now he had a computer offering a new path to the unknown.
“Even though I didn’t understand what any of it meant, I’ll never forget the life-changing satisfaction I felt when, after meticulously correcting all of my typos, that little program leapt to life,” Hamilton reflected. “As the code executed, twinkling stars filled the black and white television in front of me and I immediately wondered: What else could I create?”
From that day forward, he said he’s been both “vexed and fascinated” by that question. One thing he has created is Praxent, which he founded in 2000 during the summer leading up to his junior year in high school. He would go on to earn his Bachelor of Arts degree from The University of Texas at Austin.
“When I started my career, many IT departments played a support role with a limited scope of responsibilities like maintaining the servers that ran the website and supporting physical hardware that ran the network,” said Hamilton, who later was awarded a Bachelor of Business Administration from the Texas McCombs School of Business.
“TV shows like The IT Crowd parodied the hilarious ‘us versus them’ divide between IT workers and the rest of the company and the costly waste of talent that resulted,” he said. “The gap has narrowed; IT has earned a seat at the table and organizational speed has increased. For example, long planning cycles and top-down management approaches have been replaced by quick iterations and experimentation.”
Hierarchical business platforms that were inflexible have been replaced with “self-organizing, cross-functional teams that are better suited for rapid learning and continuous innovation,” he said. “And, IT has become a strategic function that directly influences the end user experience, value proposition and the strategic direction of the company overall.”
Companies that embraced and utilized “Agile, DevOps and microservices architecture” have been able to “strengthen coordination and interoperability between departments, and in many cases between separate enterprises,” he noted.
Unlock Hidden Potential
Praxent, which counts hundreds of organizations, including two credit unions, as clients, welcomed 45 new employees over the course of the last year. Hamilton said he views all employees, now surpassing 100, as a tech-focused across three channels: delivery leads, product designers and engineers.
“From an age perspective, our team is heavily concentrated between the ages of 25 and 44, with a small number of team members on either side of that range,” he said. “We prioritize maintaining an inclusive company culture where every voice is heard.”
Each year, the company’s recruiting team sources and interviews roughly 15,000 software engineering job applicants from the U.S. and throughout Latin America. In doing so, Hamilton said some interesting statistics have emerged.
“We’ve observed a larger number of women in certain disciplines of Praxent. For example, in our product design team,” Hamilton said, adding that he has seen studies that showed that less than 20% of all software engineers are women.
“To do our part to help address the underrepresentation, we’ve undertaken a number of measures to increase diversity, inclusion and belonging at Praxent,” he noted. “We firmly believe that a diverse range of perspectives and views strengthens our mission of empowering our clients to unlock hidden potential with technology.”
In an effort to build a strong company culture, Hamilton leans heavily on the book, The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work, written by Steven Kramer and Teresa Amabile.
“The core idea is simple: There is one factor above all others that increases engagement, productivity, motivation and wellbeing on a team. That factor is progress – or the felt sense that things are likely to improve,” he continued. “On one hand, it surprised me that so much of a team’s experience is impacted by this one factor. On the other hand, this resonated intuitively based on my own experience. And yet the vast majority of managers aren’t aware of the motivational power of progress.”
To further develop the “progress principle,” Hamilton explained that the company has developed “career paths for all roles that linked the recognition and professional advancement of individuals with the financial success of the company.”
Promoting Credit Union and Fintech Partnerships
Historically, implementing member-facing software products for digital banking, loan origination or new account opening and the like required a tradeoff between internal efficiency gains and a member’s digital experience, Hamilton said. Times, he added, have changed. Long gone are homogenized off-the-shelf interfaces, but for a period of time the alternative was costly custom builds, which caused another set of issues. In recent years, however, fintech partnerships have eased the burden.
“With the help of a rapidly expanding array of composable application programming interface (API)-first fintech building blocks, developing a custom, seamless digital experience around the member is more accessible than ever,” he said. “Companies like DriveWealth, Synctera and Codat support a wide array of use cases from wealth management to retail banking to commercial lending and because they are headless, they don’t have a front-end that locks you and your members into a rigid, disjointed experience.”
Fintechs, he added, have become better credit unions partners by concentrating on “single steps” in the member’s financial journey. And in his view, credit unions stand out from other financial institutions because they cooperate “formally and informally” with one another.
“Innovation leaders within the credit union movement are increasingly adopting credit union service organizations (CUSOs) to pool resources across a wide array of credit unions for cooperative purchasing of and investment into fintechs,” he continued. “In addition to CUSOs, credit union innovation incubators, like the Member Development Company (MDC), Filene and Curql Collective, facilitate credit union investment in the fintech community while helping fintechs to improve their understanding of the credit union marketplace.”
By aligning interests in this manner, Hamilton believes credit unions and fintechs can partner more effectively for better product direction and integration.
“It’s an attractive way for fintechs to accelerate the adoption of their technology across a diverse group of financial institutions while arming the participating credit unions with next generation technologies that enrich their members’ digital experience,” he said.
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