John San Filippo
The Voices of Money20/20: Barry Kirby of CuneXus
By John San Filippo
Finopotamus was onsite at Money20/20 USA in Las Vegas Oct. 24-27. Co-founder John San Filippo interviewed more than two dozen technology experts on a wide range of topics. The results of these interviews are presented in this series called “The Voices of Money20/20.”
Finopotamus caught up with Barry Kirby, senior vice president at CuneXus (pronounced Q-nexus) to learn more about the company and its products. We first covered CuneXus when its client, Nuvision Federal Credit Union, won the 2021 Finopotamus Tekkie Award for Lending.
According to Kirby, the CuneXus mission is to transform the consumer buying experience for financial products. “If you go on Amazon to purchase a case of Coke, you click a button and it’s delivered to you,” said Kirby. “In the financial services world, the product banks and credit unions are selling is a checking account, for example, and the process looks like something like this: They say, ‘fill out a bunch of paperwork and there's a chance we’ll tell you that you can't have our product.’”
Rethinking the Entire Process
CuneXus seeks to eliminate that entire process. To accomplish this, the company marries the information a credit union knows about a member to all the credit information available for that member. In doing so, the company is able to determine every credit union product a member would be approved for were they to apply for each product.
“We then present all of these products in a digital storefront that sits behind online banking,” said Kirby. “Members simply click to activate the product they want.”
Despite this multi-product approach, Kirby said the member experience is still personalized. “For example, if the credit union knows the member is renting their home and the credit union offers renter’s insurance, that can be included in the offers,” said Kirby. “It's about presenting very relevant products.”
Is “Next Best Product” Really Best?
Kirby continued, “We swim upstream from the idea that next best offer is the way to go. Next best offer basically is saying, ‘we've sold you these things, so now we think you should buy this.’ It’s like going to a restaurant and being presented with a menu that only shows burgers because you bought burgers in the past. We believe that the consumer has many different challenges and things that go on in their lives and they should be empowered to buy whatever products they want or need. So we just show them everything.”
Kirby claimed that when financial institutions focus too narrowly in the name of personalization, opportunities are missed. “I'll give you an example,” he said. “I have my mortgage with Chase, but I'm a long-time credit union member. When I went to pay my mortgage probably two months ago, the next best offer Chase offered me was a checking account. That's awesome,” he said sarcastically. “What we're doing right now is building an attached garage, trying to decide how to finance the project. So, my credit union showed me everything I had available to me and didn't try to predict what I was thinking or what's going on. I was able to simply activate the product I needed.”
Finopotamus then asked what’s required in terms of integration to other systems at the credit union.
How It’s Integrated
“What's transpiring behind the scenes is we’re creating an approved product on the credit union’s loan origination system (LOS),” said Kirby, making the LOS the only key point of integration. He added that the data required from the credit union’s core processing platform is pushed into the CuneXus system in flat-file format, i.e., no direct integration between CuneXus and the core is necessary.
“You don't really need real-time constant updates for these types of things,” said Kirby. “Typically a member’s profile is not going to change significantly from day to day. If the credit union is pushing the data out maybe on a monthly cadence, that's perfectly fine.”
Commenting on the market as a whole, Kirby continued, “All the folks here at this conference –these fintechs, the ones who act like the SoFis and the Lending Clubs of the world – are forcing credit unions to recognize that if they don't get proactive with their members, they're not going to be around for much longer.
Competing for Market Share
“These are actual facts,” he stated. “The average credit union member in this country has 7.4 banking relationships. It could be a Home Depot card. It could be a mortgage with Chase. It could be an auto loan with whomever. The important point is, the average credit union member has only 2.5 of their accounts with their credit union. In other words, the credit union has only one third of their business, yet the credit union is supposed to be the member’s resource for lending and financial needs. These fintech lenders are gradually peeling off business loan by loan.”
Finopotamus then asked how a CuneXus customer measures success.
“It’s the increased loan volume” said Kirby. “Creditors are flush right now with deposits. Everybody wants to lend badly and they need to do it in a more digitally focused manner because they don't have that one-on-one branch interaction anymore. And candidly, members are tired of seeking out credit from their credit union when SoFi and Lending Club are popping up saying, we’ve got you covered, what do you need?”
Kirby implored credit unions to think about the future. “If you look at the member base, it's aging,” he noted. “The next generation of potential credit union members is not coming into the system. We're helping bring them back into the credit union.”