Josh DeTar: [00:00:00]  All right. Welcome to another episode of the Digital Banking Podcast. I'm your host, Josh DeTar. And today I am really excited to have Tim VanTassel, the VP of Solutions for FICO, on the show. Tim, how are you doing?

[00:00:42] Tim VanTassel: [00:00:42] Hey, Josh, doing great.

[00:00:44] Josh DeTar: [00:00:44] Good. Well, hey, thanks for joining us today. Maybe before we get started, how about giving our audience a little bit of background on yourself?

[00:00:50] Maybe tell us a little bit about some of your past experiences and what a day in the life is like at FICO?

[00:00:56] Tim VanTassel: [00:00:56] Sure thing. I've been in FICO about a decade now, hard to believe, but I have a consulting background. I've been working in a financial services and banking for quite some time, way back when just out of college, I was actually an officer in the Marine Corps, which is a sort of an interesting start to get into financial services.

[00:01:10] But here now, I lead our advisory org and our set, what we call domain experts, where they really understand the expertise that we have and how we bring it into the market. So it's a flourishing place to work, right. We're trying to do a lot more for a lot more segments of the market than we've done in the past.

[00:01:25] And as you'll soon learn, we're much more than the FICO score.

[00:01:28] Josh DeTar: [00:01:28] Awesome. Well, before we get any further, first off I just want to say thank you very much for your service. It is much appreciated. So thank you for your service and sacrifice. And thanks for spending some time with me today.

[00:01:39] Tim VanTassel: [00:01:39] Sure. Real pleasure, Josh.

[00:01:40] Josh DeTar: [00:01:40] well also, maybe for those who aren't familiar with FICO, give us an overview of the company.

[00:01:46] Tim VanTassel: [00:01:46] Sure. Well, first off if you bring this up at a dinner party, the first thing anybody asks you is, can you help me with my FICO score? And the answer to that is no, I can't. it is what we call empirically derived and statistically significant. Right? So it's based off of the Credit Bureau data.

[00:02:00] There is no judgemental variables inside of that thing. it makes up about a quarter of our revenues overall. We're about a 1,000,000,002 in revenue a year. So the FICO score is about 300 million of that in revenue and the remainder is software services and analytics typically within financial services,  in the consumer credit life cycle.

[00:02:21] Josh DeTar: [00:02:21] You know, I think that's one of the things that even I found interesting, right. is, there's a lot more of FICO then the surface would indicate, right? So maybe even just take a minute to give us an idea  what maybe some of those different products and services look like.

[00:02:32] Tim VanTassel: [00:02:32] Sure. you know, I've traveled far and wide with FICO in my time here. And you know, that would mean not just speaking about credit and what's happening with a Chinese agricultural equipment provider or you know, a credit union in the United States or a South African bank sort of moving around the world.

[00:02:50] And think about all the different things that we do. it would range from something as mundane as making a credit risk decision saying, you know, Tim is approved or denied for this loan. but it actually would also range is something much more fascinating, too. You know, the way that you might see a flight schedule optimized for the cruise for an airline to say which cruise should be on standby, based on which airlines expectation for routes being flown.

[00:03:16] Right? So we optimize a variety of things across the world that you would just never have guessed FICO's involved with that. Right. And that would span some of the largest e-commerce players out there. I'll go though. They will remain nameless, but you know, the price that you get, whether you're using an iPhone or for using Android

[00:03:31] it's actually different, right? Price sensitivity is looked at Calc quickly online. And quite often, FICO software is used to build, to make those decisions to say who's more price sensitive and who's not. And so just one example, another one that sort of comes to mind is you know, Josh, I'm sure you head North to Canada on occasion, you know, so when you're up in headed to Whistler you stop off and you say, you know, I'm going to get some beer for the trip up there. what happens when your credit card goes through and says this does not look like it's Josh. Right? That's a FICO capability. It's actually artificial intelligence applied to say, that's a, it's out of pattern for you to do that.

[00:04:05] And then secondarily, that text message that comes to you and says, Hey Josh, is this you using your credit card in Squamish to buy alcohol?   that's actually a FICO capability as well. Right? That's going in and it's allowing you at that specific point in time to say,   yes, indeed. It is me. let me buy the beer and let me continue on my way to Whistler.

[00:04:23] so, sort of a good example of applied analytics and the sorts of things that we do that you may not think of. and they have, that concept of transactional fraud is one where you might think out of the gate. The number one goal there is to reduce it. but you can think of it probably more accurately as the number one goal there is to make sure that the customer experience is quite strong.

[00:04:41] So the customer comes away feeling that they were protected and they were able to get you know, the thing that they wanted to actually purchase. Right. It wasn't like, Hey, I sent you an email an hour later to tell you that I declined and you had to use another card, or you had to use cash, or you couldn't purchase what you want to purchase.

[00:04:55] So just a couple of examples of the sorts of things that FICO does, but you can think of it as really you know, applied analytics,  into the business at hand. And, you know, we spent quite a bit of time transforming ourselves over the last five years to be equally capable in, on on-premise world, but also a cloud world.

[00:05:12] Right. And so being able to be highly secure and, very careful custodians of our customers data in the cloud is part of all this. But yes, it's not the FICO that, you know and love when you think of just your FICO score and you say, Hey, I'm an 800 and You know, my girlfriend's is 790.

[00:05:28] but rest assured that business is very vibrant too. We're continually adapting that and improving what the FICO scores predictiveness is and making it openly available, so people understand what the parameters are and how it's affected, et cetera.

[00:05:40] Josh DeTar: [00:05:40] Gotcha. So I definitely want to come back to this whole idea of, how this plays into the member experience side of things, but maybe even just at a high level before that. So why financial services? Right. So FICO does a lot of different things. why is financial services such an important element of that?

[00:05:57] and then kind of segue to it of why for you? Right. I think it's been really apparent in just some of the conversations that you and I have had over the last couple of weeks. And even just the way that you start off talking here in today's podcast, it sounds like this is something you're personally fairly passionate about too.

[00:06:12] So, why is financial services important to FICO and why is it important to you?

[00:06:16] Tim VanTassel: [00:06:16] Well, I think financial services scenario, where you can really use member behavior and understanding of member behavior to drive better outcomes. Right? And it's been an area where the ability to apply analytics has really sort of pioneered this space and then it's grown into other areas.

[00:06:32] So used to be 10 years ago, yeah, analytics was really not broadly used. Now you're seeing predictive and prescriptive analytics used in manufacturing. You're seeing that it's like the most exciting new job as a data scientist. Right? Well, that all started in financial services in many ways.

[00:06:46] Right? Certainly operations research in the 40s was really sort of the beginning of a lot of this. Right. But then that went into this idea of, Hey, you know, I could look at all this data and I could turn it into a meaningful understanding that could be used to make better outcomes occur. If you go back to the original days of FICO, the goal was that there was no ethnicity on your credit application. Back in those days, it was there.

[00:07:08] Right. You know, your banker gave you a loan because they knew you, they knew your family, they felt you know, that they understood your credit risk. There is nothing empirically derived about that. And FICO is at the very forefront of saying it shouldn't be that way. You should be able to actually work it off of proven performance in what your data is, the Bureau.

[00:07:25] And that's been exciting to be able to be a part of this mathematical evolution. That really makes me excited. I was the sort of kid who is you know, always reading about logic puzzles and math games and playing chess in the third grade, that sort of a thing. So I've been sort of drawn to that. what's exciting to me is really not, you know, the idea of selling something.

[00:07:42] the idea is to really conceive of something that, creates that business value that, endearing outcome for our clients. Right. And our goal is to really just be the preeminent provider of, B2B capabilities that are used for B to C. Right? So how can we actually help you understand stand more about that customer behavior to produce better outcomes for them and for you?

[00:08:03] And I, find it fascinating because it's, extremely sophisticated. I'm not a PhD, I'm not a master's degree, but I have a knack for listening to people who are, and on my staff, I've got host to people that are just absolute know, on a whole another level as far as brains what they're able to do and think about, and it's really fun to challenge them and say, okay, well, how could we do this differently,

[00:08:23] how could we help in different way. So I find that to be challenging and interesting every day. And and the idea that you know, we have a broad range of capabilities, so we're not in a little narrow box I find fascinating. I could tell you stories about helping clients with their Chinese equipment portfolio.

[00:08:38] Just like I could tell you stories about helping clients make, you know, more solar panel loans in the state of California. they're all a bit unique when it comes down to it. And that's what I like about it. It just never gets tired.

[00:08:49] Josh DeTar: [00:08:49] So I think that the crux of that is the data, right? That's what gets you excited as being able to have access to this really fascinating deep data on someone, but then actually being able to take intelligent and meaningful action onset data.

[00:09:03] Tim VanTassel: [00:09:03] Right, That's right. And, FICO's data agnostic, very few people know this but we're not a data provider. Right. So quite commonly say, Oh, you know, what is, on this, what is FICO have on that, the reality is, you know, we would love to see all, forms of data, be able to use it, but we're very clear to be you know, FCRA compliant.

[00:09:20] And we're only gonna use what's legally allowed based on the decision. but also we're going to try and use anything and everything that we can that's available. to bring it to Bureau, right? So if I can give you a better experience and if we bring in another interface based in doing that, so be it, FICO's not going to say, Hey, don't work with them, or don't work with the other, bring it all in and see how it could actually be applicable.

[00:09:37] so I think the data being able to turn that into information being turned into actionable insights, is the part that's really interesting to us, and how you actually do that efficiently. Right? So you think about you know, this sort of world of Big Data we live in. I mean, you might think about it as the Mississippi river, right?

[00:09:51] If you've ever been to the, you know, New Orleans and the mouth of the Mississippi, seeing that river roll by. Think about that as the amount of data that's rolling through, say an average Telco per second, right. And how you might think about harnessing that and using that, right. And how do you do that in a way where it's good for your customer, good for your member, but also you know, make sense for you.

[00:10:10] Right? Because that volume is just constantly rolling by, you can't keep up with it. Right. And how do you think about what are the right things to do? What are the right things to pull from that river? What are the right things just let pass by?

[00:10:21] Josh DeTar: [00:10:21] Yeah. You know, I think one of the things that love is hearing, you know, what the new buzz word of the day is. Yeah.

[00:10:28] one of the ones we hear a lot lately is, especially in the credit union space, right. we're really trying to come at everything from a member-centric lens from the member focus.

[00:10:39] and a lot of times, especially when we're talking about digital banking, you know, that's really centered around member experience. And sometimes I think we look at that on the very surface level as just how easy is it for my member to fill out this form in digital banking. And absolutely that has implications on the member experience.

[00:10:58] But I think having a really strategic approach to member-centric and being able to provide services, products, experiences that are unique to that person, it all comes back to what you were just talking about, right, which is the data. So they have all of this data. So how are you guys looking at helping to define this member experience with data?

[00:11:26] Tim VanTassel: [00:11:26] Well, I think one good example  in the credit union space specifically is the untapped potential in the deposit data that is available at a credit union. So understanding what that member's deposit history looks like can be used to provide an analytic that works in tandem or independent of credit score.

[00:11:45] Right. we call that a member score. but it really is this concept of being able to say, I understand you from a deposit history,  and can put that into sort of a behavior perspective and be able to say, you know, here's how I might think about treating you differently than me because I've got this three years of history with you and I've got, one month of history with me.

[00:12:05] And if I have that information, what and when I do differently. And it's just a good example of, you know, essentially data is available that is commonly not even thought of, or used inside of the walls of a credit union. yet there's all these ideas of, Oh, I need to go and buy, you know, email age, or I need to go, I can list numerous vendors.

[00:12:24] I need to go buy them. and I'm not arguing that they're not good. They are good. But the first thing to start with is, you know your own members based on your own data?  I think that once you delve into that you'll find that there are all sorts of benefits of being on a platform. And that's an example of an analytic that we're bringing in to aid credit unions that are interested in that, right,

[00:12:42] to be able to use that deposit relationship, to be able to compete with the much larger banking entities that are certainly working off of that information themselves.

[00:12:50] Josh DeTar: [00:12:50] So I think this is absolutely fascinating and I really want to understand more behind this because I mean, I actually give you a very real personal example of this, right? So I've been a member of the same, some  old credit union here in Portland for gosh, 18 years now, 15 years, something like that.

[00:13:09] Right. and so I have a standing history with them, right? It's a small credit union. They know who I am, they know my dog's name. I mean, you know, so we have a really strong relationship. I mean, this was probably quite a few years ago now at this point, but I went in to buy a car

[00:13:24] And I, as a part of the negotiation tactic, you know, offered to see what the financing through them would look like, et cetera. So my job was buying a fairly inexpensive car. I had great credit, you know, at the time I think it was high, 700 for my age. I thought that was pretty good. I had reasonable income. I was putting a decent amount down, and the guy comes back and says, Hey, I hate to break it to you, but you've been denied. Full on, straight up, complete denied.

[00:13:50] Well, it turns out someone had exploited personal information about me, opened up an American Express card, charged it to the hill, changed all of the contact information to themselves. And I never thought I needed to pay this American Express card that was taken out of my name. Right. So I have fraud and I didn't find out about it until then.

[00:14:08] Well, the unfortunate scenario was, I found myself needing a car. And so I immediately called my credit union. I'm hysterical at this point, right? Like, Oh my goodness, what has happened to me? And I don't know, less than 10 minutes later, they're like, Hey, it's no big deal. We know who you are. We know your 

[00:14:23] Tim VanTassel: [00:14:23] trust.

[00:14:23] I love that.

[00:14:24] Josh DeTar: [00:14:24] One's approved.

[00:14:25] You're good. We've got you.

[00:14:26] Tim VanTassel: [00:14:26] Love that story.

[00:14:27] Josh DeTar: [00:14:27] So that's where me being taken into account as an overall member of that credit union, right, that had major impacts on how they viewed me just from my credit worthiness, but as somebody that a member of their institution. So how are you guys looking at bringing in this member score to help augment this in a digital world that same, you know, deep, interpersonal relationship building that a credit union may have with a member?

[00:14:56] Tim VanTassel: [00:14:56] Yeah, it's fantastic. a great question.  think of it as fairly simplistic explanation to start with, which is that on each month, right, you basically provide over the information about the member and the member, and it would come back with a score, and then the score actually would be able to be used in ongoing strategies.

[00:15:11] And in your case, right, with that long of a tenure, with that much of a history, you would have a very high behavior score from a deposit perspective, Josh. Right? you'd be really high. So go back to your auto example. And if someone hadn't done a account takeover fraud but you actually had a 680 credit score, right?

[00:15:27] It's very likely that your credit union would have said, Hey, you know, I could actually put Josh in a significantly better deal than I would otherwise, because he has a way better deposit behavior than his credit behavior right They're essentially, if you look at them as a dual score strategy, I'd be able to do much more for you.

[00:15:43] the same thing with that, the behavior score though, that same thinking could be applied to say, well, how do I think about things like, overdrafts and protecting somebody from overdrafts, right? many members are probably aware now and are realizing that, you're worried about fraud now, you think about it in terms of wires and checks, right, and how somebody might get involved with defrauding in that way. Well, this idea of like, what's your typical behavior look like, and how can that be used to handle hold strategies that are on your books right now is a good, another good example. Right? How do you think about that? How quickly do you release that? Is this really out of pattern for that member fee waivers are like this too, right?

[00:16:17] There's host of things where that deposit behavior can really be used to accentuate that experience in that background. Right. And you think about how much information is required of somebody, what you ask of them once you know them for that history, you sort of have the, equivalent knowledge of having their statement of cash flows in many way. Right. And so you really need to go through and reverify income. Right. You know, how do you think about that if somebody has been on your books that long? I love it when people can tell me, you know, true stories of their credit union, you know, just being awesome like that.

[00:16:46] Right. You know, and in my world I think I mentioned the outset that I was in the military. You know, I grew up with bank but it's a bank that thinks like a credit union named USA, right. And USA, the way they would handle this as they would give you you know, loans and things they would do early in your career when they knew that you were needing this sort of relationship and then it would sort of grow over time and it's grown. And I don't think of them in the way that I think a typical person thinks of their financial institution. Right. I think of them as being very much an ally. And I could tell you similar stories about

[00:17:14] times where we've been through something together, right, where I think that most, if not all people's relationships that are not with credit unions that are with banks, right, they're very transactional in nature. Right. You know, here's the deal. I'm going to get a good deal from it, or not get a good deal from it,

[00:17:28] and then I'm going to move on. Right. And I really love your story. I think member score is a way to be able to use analytics, to build accentuate that same sort of experience and make it happen more commonly for credit unions than it does now. this idea. We, talk about democratizing analytics is this term, right.

[00:17:44] You know, you talked about buzzwords earlier, you know, big data digitization, et cetera. You know, I think when you hear that democratize analytics, just this concept is, manifold. One would be, you know, Hey, more people should have access to analytics, but also you should be able to use them in a less expensive manner.

[00:17:59] Right. And this is a way where we can essentially allow organizations to bring it in market without you know, high expense rates to be able to do so.

[00:18:06] Josh DeTar: [00:18:06] as probably regular listeners of our podcast know, I mean, my tongue's purple from drinking the Kool-Aid right. I'm a big fan of credit union industry.  And one of the things that we try really hard to do with this podcast is, you know, I really don't want it to be a sales pitch to talk to all sorts of different types of guests with different backgrounds and different thoughts on our industry.

[00:18:26] And, you know, anytime we bring in someone who's a vendor and, you know, has something to sell. I like to stay away from that, but I'm going to be totally honest. Like I'm going to call it out for people. really want to hear more about this product. And it's one of the reasons why I brought you on this.

[00:18:38] And, you know, I will kind of unapologetically say that want to give you a little bit of a platform to talk about it because I really and truly do believe that if we really are drunk on our own Kool-Aid, we want to support community minded FIs be able to bring this ultra intelligent relational into digital. Right. Because if my relationship with my credit union had always been just digital, if it hadn't been built on years of actually going into the branch and we can go way back and, you know, I used to bring them warm, fresh cookies when I worked at a restaurant if it wasn't been built on that, right,

[00:19:16] would my outcome in my specific example have been the same? don't really know, but if we can use data and technology partners to be really intelligent with that data, and then take data and make it less than just you know, non-emotional data and turn it into something that's actually emotional and relational.

[00:19:36] I think that helps us to expand the credit union differentiator. So anyway, that's my long-winded spiel of. Tim, tell me more about this what does it actually look like for a credit union to implement this? What does it take? what types of data sources do you guys actually use to generate it?

[00:19:52] Tell me more, man.

[00:19:53]Tim VanTassel: [00:19:53] it's all the member. It's basically the, credit unions' own member data. That's actually stored in their core banking system. Right. And so it's essentially the history of the deposit relationship. we have that laid out as far as what we'd like to be able to see from the credit union and the credit union provides that over, and then it's securely transmitted back and forth where we provide essentially a scoring service that sends it back and says on a monthly basis here's the scores related to each of your members and then brought back in. So, we don't anticipate a huge amount of tweaking and tuning being necessary at each credit union to be able to make the behavior score layout the right way but it is. We look through and make sure that they're similar between them.

[00:20:31] we've got a, couple that are coming essentially live on this very shortly and are excited about it. We expect to bring it out in a mass over the course of the next year, where you'll see more and more that, credit unions are able to use this. Right. And I can think of, you know, dozens of examples of uses, right.

[00:20:46] But you know, in this current market it won't be every day  where you'll be thinking that you're just fine on collections, right? There's going to be collections related activities that are gonna have to occur. And what a great thing to be able to bring to bear, to say, you actually understand that behavior

[00:20:59] from a deposit perspective of that member before you reach out and you actually try and talk to them about this, right. I know these are delicate conversations. but being able to use it there is, just as positive as the cases I talked about earlier in the case. but you know, we have an analytic staff that are,

[00:21:14] ready, willing, able, have worked through the score, have turned into something that is meaningful, supportable and we're working to bring it out there in mass. And I think you know, we can move clients from a, discussion to essentially having a, back and forth you know, data coming to them in a matter of months, few months, very quickly.

[00:21:32] Josh DeTar: [00:21:32] That's awesome. bringing it back a little high level, been having a lot of conversations recently just around, if especially in the COVID era. Right? hate using this as like.

[00:21:45] Tim VanTassel: [00:21:45] In the COVID era. Right. You  know? My 

[00:21:49] Josh DeTar: [00:21:49] wife and I, we're going Costco this weekend and she made a comment. She goes, you know, it'd be funny. our parents always told us the story of when I was a kid, I had to trek uphill, both ways in the snow. And your story will be one, you know, my day I had to wait in line at Costco cause of COVID.

[00:22:02] Tim VanTassel: [00:22:02] Yeah, that's right. That's right. We ran on a toilet paper for two weeks, right? Yeah.

[00:22:10] Josh DeTar: [00:22:10] But, you know, as a part of this, obviously, you know, we've seen a lot less physical, in-person interactions and that includes in the banking ecosystem, right. A lot more people moving to digital. So if all of a sudden, all of our interactions become very digital and become very transactional, what does differentiate a community FI versus a big FI?

[00:22:29] Right. And I think one of the things that I've been hearing a lot from some of our customers and things is,  actually one of the elements or one of the times in our lives where we realize that we need to credit union more than ever is when it hits the fan. And I think that's the point that you were just making.

[00:22:44] So, how do we look at these types of elements supporting credit unions being able to still be very relational in those types of instances where members really intrusively need them, not just want them, but need them. If our relationships are more digital than physical than they've ever been.

[00:23:03] Tim VanTassel: [00:23:03] Right. Yeah. I think that's big challenge, right, as you've got to be able to make it more digital and you've got to think about what you're doing that is relevant. I mean, you know, sort of another example in the world of FICO, that's interesting, we do grocery rewards for the, I think it's the number two grocery in Canada, right.

[00:23:19] I'm not going to list the name, but their entire plan was whatever we tell somebody in the rewards program has gotta be relevant.  how many things have you seen in your life, Josh, that aren't relevant? You know, you get these, you know, Whoa, what are they doing? Why they send me this stuff? They would send nothing, unless it was actually proven to be interesting to their end member, their end customer.

[00:23:37] Right. And as a result of doing this every night, it kind of cranks through and looks and says, okay, there's 1600 things I might tell you about it, figures out the things that are most relevant and then compares them back, compares them back, compares them back. I think it's the same sort of thing. Right?

[00:23:48] If you think about what you're doing in credit union, if you're a you know, Northern Illinois, you know, what is everybody thinking about right now in Northern Illinois? What do they need help with? How can you actually work with them? Right. What's happening with employment in the area?

[00:23:59] would argue everybody's got their own, what I would say is sort of a niche strategy to say, okay, how do we differentiate on relevancy? What is our special sauce? Right. And what do we do? I think the point is just to delve even deeper into it. what are we offering and saying that's different in the market, and how do we get those channels out to our, members, right,

[00:24:15] knowing that they're not going to walk through the branch? Right. And you know, it could be something as simple as reminding them of certain rewards and, things they're entitled to now. Right. But not, you know, filling their inbox,  Hey, by the way, this looks something that's relevant to you that, you know, you haven't used from us.

[00:24:32] And it seems like it would be very helpful to you. We want to make sure that you're aware of that. Right. And is there a way that we could essentially combine digital with personal, right. I think we all know that you know, man, I don't know if anybody hates you know, IVR more than I do.

[00:24:45] Right. There's nothing worse than when you get on a bad IVR. Right. So I'm not arguing for IVR. Right? W FICO would try to always do is, sort of, have the best of both worlds, which is to say it's a hybrid, right. You know, it reaches out an automated fashion, but the second thing you indicate, you know, person, talk to person, right.

[00:25:00] You know, you got to get them over and you'll look at some of biggest organizations in the country that are extremely good at handling the equivalent of member attrition, right, and keeping people around. You know, the way that they handle that, they don't do that through automated offers. They do it through a machine learning that helps the one who's gonna lead, but then they have really smart,

[00:25:19] friendly people that talk to people on the phone say, Hey, you know, I'd like to chat with us. Right. so I would argue that digitization brings this ability to focus your extremely proficient, member-oriented staff on the things that matter most across your member base. And being able to say, okay, how do I handle those sorts of situations where it's essentially brought to me in a way where I can be most effective.

[00:25:42] Right. And so, you know, you really don't want your call center staff to be, helping type in you know, an application that has the same darn data on it, that you already are aware of. Right. You'd much rather have them talking more about the life experience somebody going through and then sort of thinking about what could be done to be able to improve that situation for that member.

[00:26:00] And so I would just argue that, it's that hybrid play that is so exciting and so interesting if you're a credit union, right, is that you have the friendly people. How can you still use them, but use digitization to sort of drive them to more meaningful interactions versus sort of less meaningful ones they might be involved with, right.

[00:26:17] You don't need anybody, whatever, you're late 30 days on paying for something, Josh, right but you've been with the credit union for 10 years. the last thing that you need is a reminder call where somebody from the call center calls up and says, Hey, by the way, Josh, I want to make sure you're aware that  you know, owe us money right, now, a little simple text.

[00:26:36] This is Hey, love you to death, man. I just want to make sure you're aware, and you're gonna go, Yep. That makes sense. Great example of like using digitization to be much more effective with the way that the credit union uses its resource. And if there's a hard discussion to be had it's had a, you know, with the right sort of background necessary.

[00:26:52] Josh DeTar: [00:26:52] well, you gave me so many things that I want to talk about. So,  I recently had guest on the podcast, Brian Orta. He made a comment that's really stuck with me. Right. Because it's actually one of the things that I try and embody you just, even in how we approach sales in our organization.

[00:27:07] Right. And he made the comment. He said, credit unions a lot of times, they shy away from being a quote unquote sales organization. Right. We don't want our members to feel like we're constantly trying to sell them another product. Hey, get this credit card. Should your auto loan be through us? What about a HELOC interest?

[00:27:23] Right. But he made the comment. He said, you know, we're living in a day and age where you know, my Amazon smart speaker will pipe up and say, Hey, Brian, noticed that recently you've been stocking up on toilet paper. We just got a you know, a new shipment in, would you like an extra roll of toilet paper or Hey, you know, when he logs into Amazon on his phone, it says, Hey, people who have been shopping for this item also looked at this item.

[00:27:47] And so his comment was: if sales is really a service, is it really sales? So if what you're selling me actually is a service to me, and I really actually could use product and it could make my life better, then is it really sales, or is it really offering a valuable service? And, you know, we made the comment that, okay, so let's say we've got a member who is you know, just

[00:28:12] opened a Home Depot credit card. And then you see that they are shopping around on kitchen remodels sites. And what if you could take all of that and proactively reach out to that member and say, Hey, Tim, you looking to remodel that kitchen? you know, we actually have all of this data about the relationship you have with us and your mortgage, and we can offer you a very attractive ,

[00:28:31] you can get that kitchen done faster, right? So is it sales, or is it Tim sitting there going, Oh my gosh, I was fretting about how long it was going to take me to be under construction to do this, 'cause I could only do it a chunk at a time, 'cause that's what I can afford. And now I can do it all.

[00:28:45] Tim VanTassel: [00:28:45] Yep. Yep.  No, I love that. I mean there's a few themes in there. Let me just hit on a couple of them. Right. You know, first off, like yeah, I'm in sales as much as I'm in analytics, as a much I'm an advisor. Right. And, you know, part of my job is to sort of, you know, speak in a compelling way about what it is that we do.

[00:28:58] but in the way that I do that I would argue when I grew up, you know, which is a while back now, but, you know, way back in the '80s, right. You know, sales was like, It was that pushy person that came over when you were looking at a car on the car lot and was trying to guide you to car

[00:29:12] you didn't know, or didn't know anything about the car, righ, or with somebody, you know, knocking on your front door, trying to sell you something that you had no interest in whatsoever, and, you know, it kept you away your family. Right. And I think that,  that concept is sort of evolved, then adapt a bit.

[00:29:26] Right. We still, all of our inbox is just loaded with people trying to sell us things. Right. And I would go back to what I said earlier about relevancy. Right. so, you know, if I use my example earlier of, you know, my current financial services relationship, I remember a while back, I had this sort of strange time in 2009 where, you know, my wife and I we both had owned condos, and we didn't want to own condos, but we became reluctant landlords,

[00:29:49] right, because we couldn't sell them. Right. my financial services organization, you know, happened to also be in the insurance business. Right. And I remember I called in related to something, I don't even know what it was, had something basic they had known, right. They said, you know, you really need to have an umbrella insurance policy for these two condominiums that you're renting out right now.

[00:30:08] And here's what it costs. And here's why you need to have it. really, that sticks out in my mind as being, you know, something that I needed to be sold on that one. Right. I wasn't even aware of that. I don't have like some sort of elaborate financial planner in my life that's going through and looking at exposure in this way.

[00:30:22] Right. And so it was relevant. I was instantly interested in it, you know. We all needed it for, whatever, six months until we get out of the situation, but it was a fantastic positioning. And, your example that the gentleman gave, is a great one, right. Where, you know, somebody is out there you gotta be careful that you're losing

[00:30:38] to convenience when you have a significantly better offering, but that home Depot card, that's  your member might have a private label version of that card just for Home Depot. And you could actually get your member a significantly better deal either with your own credit card, or with a home equity loan.

[00:30:55] Right. And I think the idea of being able to talk to a member be very relevant to say, not only, Hey, by the way we do this right, but by the way, we do this in relevance to other things you might be looking at, it's a significantly better deal. Right. You know, so you look at online, personal loans as an example, I would, suspect that your credit union could typically beat an online, personal loan lender at their own game with their own members.

[00:31:19] Right. But how many of those members actually have those and the reason they have those there's a variety of them, but they may have it just like, Hey, it was really easy, fast and efficient, and I could do it very quickly. Right. And liked that concept. Right. And I think when you're selling a compelling, useful service to a member, it's a different animal.

[00:31:35] a little bit more on the advisory side saying, Hey, You know, here's why we would think this would make sense to you relative to other solutions. remember a while back, I used to spend a lot more time in mortgage banking than I do now. but in mortgage banking, a fun question to ask why, it would be to say to somebody you know, I currently have my mortgage with you if I choose to refinance,  why should I refinance with you versus with somebody else? And you'd be shocked how many times, whether it was a credit union or it was a bank, there would be no answer to that question, right. It would be as if, well, we like you, you like us, it wouldn't be like, Hey, I can get this done much faster.

[00:32:08] You know, I can make it easier for you. that sort of thinking is what I think is really at the core of this change idea. So it's sort of, as going to amplify what he said, I think it's a great point. And it shouldn't be thought of as a distasteful thing, when you can make it relevant, when you feel like you're really providing value to Josh.

[00:32:23] Right. But when it's like. I mean, you seen these I watched this Netflix these documentaries on, you know, horrible things have happened over the years. And there was a huge thing on, you know, a top five bank in the United States. Now they were putting people into, products they never asked for, right.

[00:32:36] Because they were, you know, making the numbers. Right. and people had  what happened? how come I have a credit card? I never asked for a credit card, right. that is not sales. That's something else. I don't know what you call that. Right. What sales are supposed to be is, providing value to somebody with an offering that your organization has that's differentiated.

[00:32:51] Right? And I think that education is important to say, you know, here's the benefits of having a, deposit relationship with us, you know? And, here's the benefits of having your child have one too. And here's other things you might think about doing based on what we know about you. So, I love that idea that it's not distasteful think about it in, from a selling perspective, as long as it's relevant to the person that you're selling to, and you can talk about what it is relative to other alternatives that they have.

[00:33:15] Josh DeTar: [00:33:15] You know, I think an important element to that is culture, right. The culture of the actual organization that is trying to sell said product,  And I think, ornately the credit union culture is set up in a way to message a sale is going to be the right way. Right? You'll get a kick out of this.

[00:33:32] I know where you're going. You know, we all get these emails a million times a day and I have a person, I will not use his name, who has been reaching out to me every single day on LinkedIn for the past two weeks, including this morning to where I was like, man I guess at this point I do have to take the time to actually respond to him.

[00:33:50] He has been trying to sell me leads for healthcare professionals for last two weeks. And I comment to my wife. I was like, what? I mean, if he just took five seconds to look at my LinkedIn profile or my company's website, he'd realized I couldn't care less about a lead in healthcare. It's not going to be any good.

[00:34:07] Right. So, but I'm imagining that the company that he works for, the culture is we have got to sell stuff. Anything, not the right products to the right people at the right time. So I think the culture of the organization is going to have a really big impact on how that is presented to whoever their customer may be. And for a credit union, that's their member.

[00:34:27] Right? So when your culture is really at its core derived around service, I think it's a really natural extension to make sales a service.

[00:34:35] Tim VanTassel: [00:34:35] Right, right. That's exactly right. And I'll use an example, In my world, right, I've always wanted to not be in debt, you know, from when I was a kid. Right. And so I would always strive to try and pay debt down. Right. And you think about that as the second you know that about me. If you're a credit, and if you're my credit union, and you look at my mortgage, you'd say, Hey, here's ways you can actually chip away at this.

[00:34:53] Right. And if you hounded me about that, right, sort of hounding me about something that I actually find a positive thing. You'll be like, hounding me about exercising healthy. you're not hounding me about something, that is not relevant to me. You know? Hey, Tim,

[00:35:05] I thought you said you're going to do biweekly payments in your mortgage. It looks like you didn't do them, right. Now is that of a significant value to the credit union to be able to get a couple early payments a year? Well, I would argue that they create a much better member relationship where that member says, yeah, this is somebody who's partnering with me for what my overall goal is, which is, I said at the outset I wanted to

[00:35:24] be 50% LTV on my loan by the time I'm 40, or whatever it is. Right. just a simple little example. I think the more that it was sort of think that way, right. more that the college, et cetera, I can see, yeah, that's not, you know, I'm not just repressing things wildly, or am just saying, well, how can I actually make your life better based on things that I offer?  think that you know we sort of all joke, right. You'll hear these broader FS organizations sort of saying, Hey, you know, I'm really trying to be customer centric, right but, you know, it's a very thin veneer, you know. Right. It's like but it's all profitability at, you know, like all that sort of falls away.

[00:35:57] Right? Yeah. And I think the credit unions are really in this, this special spot where it really is about the members. Right. And that's an area where they can really accentuate that and, you know, sort of think about what they're trying to do in their community is to be able to make it really different.

[00:36:10] Josh DeTar: [00:36:10] you'd mentioned one thing that I took a note on that I wanted to come back to. You'd also talked about how creating efficiencies helps with that as well. Right? So having the right data, the right systems, the right information at the fingertips of the actual, member services representatives. That can also create a better member experience too.

[00:36:28] Tim VanTassel: [00:36:28] Absolutely. Well, I mean, you know, I'd referenced that I was in the mortgage space a while back, you know. You think about the amount of documentation associated with processing a mortgage. And then just think about it. If you ran an antiquated credit union where you're relying on paper across the board, think about the cost associated with that. Then think about it

[00:36:44] if you would invest it in something that would actually bring that into an electronic world, and you could actually pull that over and auto-populate much of it and the ability to move it through to an electronic closing. I would argue there's certainly a some up front cost to that, but in the long-term, in the mid-term, the efficiencies are dramatic and not only are they

[00:37:01] beneficial at the outset, but then they allow it to actually further drop down the rates that you have to charge. So it's a sort of a self fulfilling prophecy, right. You know it becomes better and better over time. And so efficiency's helpful and that you can lower your pricing as well 'cause you don't need to pay for your inefficiencies.

[00:37:17] look at the number of reasons people call into the call center where they're asking questions that could be rapidly resolved. And are you looking through those and saying, okay, how can I actually address those and keep people from calling in, right, because it's not, you know, it's not the most effective way to handle it.

[00:37:32]Josh DeTar: [00:37:32] I mean, it's amazing to see just, you had made the comment about the IVR earlier. Right. And it's amazing to see the data. Anytime I talk to my customers, every one of them says the same thing too. They're like, I hate IVR. Oh my gosh, the stupid system. I want to get rid of it, rip it out. And then they go look at the data, and they're like, well, son of a gun, a bunch of my members are still using this thing.

[00:37:49] And you know what? The number one thing people are looking for how much money is in my checking account.

[00:37:53] Tim VanTassel: [00:37:53] Yep. Yup. Very basic. Yeah. You can do some things on the app. Like the 90% of what people check in on the app is extremely basic. I'm here to look at what's on the mobile, what they want to be able to see, what they want to understand. That's right.

[00:38:05] Josh DeTar: [00:38:05] Yup. Tim,  what parting words of wisdom do you have for us? What kind of things do you really hope happens in our industry in the next couple of 

[00:38:11] Tim VanTassel: [00:38:11] years?

[00:38:11] Yeah. I, think that,  it's going to be a really interesting time as we come out of this COVID crisis. Right. And I hope that credit unions will maintain their focus on their members and growing that membership being able to be good stewards, right. Not getting people overly in debt when it's not appropriate.

[00:38:27] Right. And I think that digitization is really at the center of that. You can educate people about how to use these products and solutions. I personally don't know that financial literacy is nearly as strong as it ought to be. I feel like a lot of that actually falls on the financial institutions to provide a lot of that literacy.

[00:38:42] There's a host of things that FICO does to enable this. There's a host of things. And I'm sure your organization helps with as well, Josh and credit unions themselves have to help with, right, to say, these are way to think about you know, how you work with credit, and how you interact with it. but I, think it's going to be very interesting time. Hopefully,

[00:38:57] you know, when we talk again in a year, right, this will be something we'll be putting in the rear view mirror, when it comes to COVID. but you know, unemployment is extremely high. There's a lot of pain that's out in the market that we haven't seen because it's been sort of papered over by the stimulus package, and eviction moratoriums and mortgage payment, moratoriums. all of that's coming due at some point.

[00:39:17] So I'm very concerned for, you know, America and my fellow citizens. think that you know, it's a really a time for the credit unions to stand by their members and keep those long-standing relationships sole. 'Cause it will turn, right, as all things will pass, and unemployment will be temporary. I do think it's an interesting time that we're transitioning through.

[00:39:34] It's funny. I was asked like, what are your one year predictions, Tim. Like. I think we can all make predictions for three years, but it's pretty hard to predict on a one-year time horizon right now, right, where it's just not really clear what's going to happen within six months.

[00:39:47] Josh DeTar: [00:39:47] man, I couldn't agree more, but I think this also presents careful with the word, wonderful, but wonderful opportunity for credit unions. I remember it, like, it was clear as day. I was in San Antonio visiting one of our customers and I'm headed back to my hotel after dinner and somehow get to talking with my Uber driver, somehow started talking about finances, and he started to express concern and I said, well, do you do your banking with a credit union?

[00:40:15] And he goes, no. Why would I? And so I was like, Oh my gosh, like shining star opportunity. Tell this man about credit unions. And I did, he was like, wow, I didn't, know that. That sounds like exactly what I needed in my life. And so I think a lot of Americans are gonna find themselves that exact same boat, right.

[00:40:32] Where they maybe have heard about, or know somebody that banks with a credit union. but maybe it doesn't really fully understand how the relationship side of being your primary financial institution can have more impacts than just this is a place I can do my 

[00:40:48] Tim VanTassel: [00:40:48] transactions.

[00:40:49] Right. Right. Completely agree.

[00:40:51] Josh DeTar: [00:40:51] well with that, Tim, I think we're kind of coming here up on time. I want to say thank you so much for all of the insight that you shared. Honestly, I think the last 50 minutes just flew by for me. I'm really interested to see just some of the different things that you guys are looking at, the way you were approaching data, huge fan of this whole member score idea.

[00:41:09] I'm going to be a major advocate for it. but maybe in closing a few last questions for you. So let's start with some of your favorite resources. Where do you go to stay up to date on what's happening in our industry?

[00:41:19] Tim VanTassel: [00:41:19] I, you know, I'm, pretty widely read. Right? So everything from a Credit Union Times to a Slate Money podcast to the Economist, right. So I'm a voracious reader of content. But I will say that the specific format, a podcast to me is just really the thing now. Right. There's nothing better than having something you're listening to while you're washing the dishes and taking care of other things. So I'm not going to list you my five favorite podcasts, but I'll say that's my preferred forum. I do really I think that's the wave of the future. particularly where it's just voice, to be honest with you, because it's something where you just listen in, you know, you're not looking at a visual of it, you're taking care of something else, but it's sort of in the back of your mind, you're out walking the dog.

[00:41:56] So there's a host of them out there. I think I love what you're doing here and I expect there'll be more and more of them.

[00:42:02] Josh DeTar: [00:42:02] Oh, well, you know, I appreciate that. I'm with you. I'm a huge fan of the podcast because it gives a, longer forum discussion. Right? So it's not so much soundbites. sorry, I'm going to throw you under the bus a little bit here if you don't mind. But you know, you'd asked the question before we started too.

[00:42:15] If we edit this show said no, and I've really become a fan of, like I said, that, long forum of it. I don't want to just hear the polished soundbite that somebody wrote and then have their marketing team review. And really love the idea of the podcast giving you just that, gut conversation just

[00:42:32] exactly what's in your mind. and I think hearing different people approach on the fly questions, and thoughts, and formulate those opinions has been fascinating for me. So this has absolutely been one of those. I really appreciate it. So Tim, if anybody's is enthralled with you as I am, how can they connect with you?

[00:42:50] How can they learn more about you and where can?

[00:42:51] Tim VanTassel: [00:42:51] Well I'm out on now, LinkedIn. So Tim VanTassel, just look up a FICO, and you go to a link in a second. So happy to connect that way. And then a fico.com, www.fico.com as well. So we used to be known as Fair Isaac. originally,  the two engineers: engineer and mathematician that created the company, but now we're just known as FICO.

[00:43:10] And that website will have a host of information related to what you might be interested in. But happy to link in as well. And we've got a plethora of experts keen to be able to help with any and every sort of question related to what we do.

[00:43:22] Josh DeTar: [00:43:22] Awesome. Thanks Tim. Well, thank you for joining me today on the Digital Banking 

[00:43:25] Tim VanTassel: [00:43:25] podcast.

[00:43:25] Pleasure, Josh.