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The CU2.0 Podcast
This podcast explores contemporary, critical thinking and issues impacting the nation's credit unions. What do they need to be doing to not just survive but prosper?
The CU2.0 Podcast
CU 2.0 Podcast Episode 367 First City CU Implements Ribbon's Automated Inheritance Processing Tools
In a year about 500 members of First City Credit Union in Pasadena die. It’s a credit union with 57,000 members.
And what happened after the member’s death?
On the show is Saeid Kian, CEO and co-founder of Ribbon, a fintech that has developed a tool kit to help credit unions speed up the process of settling a member’s estate and also - this is huge - helping the credit union retain some of those assets on its books.
Also on the show is Nav Khanna, CEO of the $900 million First City Credit Union and his is the first credit union to go live with Ribbon.
Why did he agree to be the first? What benefits has First City seen?
Know this: at most financial institutions the process of handling a deceased member’s accounts is labor intensive. It annoys the heirs and very likely it also annoys the credit union employees who are tasked with handling the estate.
Saeid knows this first hand because the idea for Ribbon grew out of his own frustrations in settling his father’s estate - a process that took many frustrating weeks. There had to be a better way, he thought, a way that worked better for the heirs and maybe for the credit union too because the heirs no longer would leave the institution with a settlement check in hand and with the intention to never again deal with that institution.
And Nav tells us it’s really working at First City.
Listen up.
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SPEAKER_01:Hi, and welcome to the CU2.0 podcast with big new ideas about credit unions and conversations about innovative technology with credit union and fintech leaders. This podcast is brought to you by Quillo, the real-time loan syndication network for credit unions, and by your host, longtime credit union and financial technology journalist, Robert McGarvey. And now, the CU 2.0 podcast with Robert McGarvey.
SPEAKER_03:In a year, about 500 members of First City Credit Union in Pasadena will die. It's a credit union with 57,000 members. And what happens after the member's death? On the show is Said Kian, CEO and co-founder of Ribbon, a fintech that has developed a toolkit to help credit unions speed up the process of settling a member's estate. And also, this is huge, helping the credit union retain some of those assets on its books. Also on the show is Nav Khanna, CEO of the$900 million First City Credit Union, and his is the first credit union to go live with Ribbon. Why did he agree to be the first? What benefits has First City seen? You'll hear the details. Note this. Most financial institutions, the process of handling a deceased member's accounts is labor-intensive. That annoys the heirs and very likely and also annoys most of the credit union employees who are tasked with handling the estate. Saeed knows all of this firsthand. because the idea for Ribbon grew out of his own frustrations in settling his father's estate, a process that took many frustrating weeks. There had to be a better way, he thought, a way that worked better for the heirs and maybe for the credit union too, because the heirs no longer would leave the institution with a settlement check in hand with the intention to never again deal with that institution that had frustrated them so much. It's an automated system. It's a smooth system. And NAV tells us it's really working at First City. Listen up. Let's start. Introduce yourselves.
SPEAKER_02:Yes, I'm Saeed Kian. I am the CEO and co-founder of Ribbon. We're the inheritance platform for credit unions.
SPEAKER_00:Hi, good morning, Robert. My name is Nav Khanna. I'm the president and CEO of First City Credit Union in sunny Pasadena, California. We serve the county workers of Los Angeles, what I like to call hero first responders, and I consider First City Credit Union financial first responders. I've been a CEO here for about three years. I'm a first-time CEO, long-time admirer. Great to be here. Yeah, that credit union
SPEAKER_03:started with sheriff's deputies in L.A. County.
SPEAKER_00:You remember that? Absolutely. 1937, 11 sheriffs founded us because it was during the height of the Great Depression, which a lot of us credit unions were founded around. They saw their colleagues losing their jobs, their livelihoods, their dignity, their homes, their lives. And they said, we have to get together and help in a cooperative spirit. And our mission purpose has not changed in the last 88 years.
SPEAKER_03:Tell the audience about Ribbon and specifically start with why you got the idea to do it.
SPEAKER_02:My background is I was born in the US. I have 10 plus years of fintech experience. I started off my career abroad. I went to Southeast Asia. I started working on consulting projects, then moved into the fintech space where I helped launch a mobile money company. I did that for a number of years. moved to Singapore with my wife to work for Facebook. Back in the days where it was just called Facebook, working on mobile money projects, payment projects, et cetera, then moved over to Stripe, similar story there. I was working on helping them think about payments and expanding new markets. 2020 rolls around, COVID hits. My wife and I are in Singapore on a boring Tuesday, get a call from my dad who tells us that he has stage four pancreatic cancer. And it was unfortunately one of the worst case scenarios. So after that phone call, you know, I'll never forget it. My wife and I just stood there a bit in shock. We were just thinking about, you know, what can we do? What should we do? Ultimately, we decided to move back home with him. We move in with him in Virginia, you know, help him go to chemo radiation. Unfortunately, over the course of a few months, nothing was working. Cancer continues to spread. Ultimately decided to take the hospice route. start crossing T's, dotting I's, doing our last father-son trips together. He passes away. And as you can imagine, I'm just emotionally stunned by this and heard, and so is my whole family. And I would say within 24 to 48 hours, I'm hit with what we describe as a logistical nightmare of inheritance. And more or less, what happened was with every financial institution, there was five that my father had, one of which is a credit union. With every single financial institution, what I saw was a process that was offline, bifurcated. It was a difficult experience for the inheritor. And ultimately, it was a very inefficient process for that financial institution. And the story I always share was the first time I had ever dealt with the credit union, my first interaction ever with the credit union was through the mechanism of inheritance, which is not uncommon for the millennial generation, one of their first touch points to be with the credit union. And I'd go through this whole process. It took me four, almost five weeks to get a basic checking account handed over to me. And the story I always share is I was in branch, the member services representative, lovely lady, she's helping me through everything. And ultimately, after almost five-week process, she writes me a check, hands me the check, and I'm walking out the door thinking, I just had a bad experience. They just spent five weeks on me, and I'm holding the deposits in my hand, the money left. So who won in that scenario? And ultimately, that's where the concept and idea of Ribbon came from, which was me going through this experience of loss, going through the process of inheritance, and realizing the current system right now is lose-lose. The inheritors lose out because they're going through a really awful time in addition to everything else that's going on in their life, and they have to go through a bureaucratic process. And the credit unions, the financial institutions, they're losing out because they're spending operationally speaking, a lot of hours, weeks and weeks, full-time employee resources to deal with these inheritance cases. And they're not really seeing the next generation stay with them. And that's where Ribbon was born, saying, how can we turn that lose-lose into a win-win? How can we make a thoughtful experience for someone who's grieving, but at the same time, make it in the interest of the financial institution to provide that thoughtful experience by saving them hours and hopefully being able to retain millions in deposits?
SPEAKER_03:Now, were you the only heir, number one? And number two, did your father have a valid will?
SPEAKER_02:My father did have a valid will and I had a brother and I have a brother. So both of us were working together. We were tag teaming on this. And even with my mother, there's a lawyer, his wife, my sister-in-law is a lawyer. I come from a family of lawyers. So we had our T's crossed and our I's dotted. And even with this team of lawyers, we still found it to be so challenging to go and make sure we had the right paperwork and everyone has a different process. And, you know, you can never just send something online. It's never self-serve. So you always have to go in person. And even with all that in place, we still That's
SPEAKER_03:mind boggling. I don't think you told me when we talked before that your brother, a lawyer, was also involved in this.
SPEAKER_02:That's right. That's right.
SPEAKER_03:Because I would have thought you got a lawyer on the team. Okay, fine. You're going to speed it up. Or with some lawyers, you slow it down. Right.
SPEAKER_02:No, not my brother. Not my brother. Not my sister-in-law. We had two lawyers on the case. And even with that, again, we are blessed for many reasons. And one of them was we actually had one of the better case scenarios, not just in terms of having lawyers, but also having a heads up. Like my dad went to a hospice, which means we had time to prepare. A lot of Americans do not have that kind of time. That is actually a luxury and a blessing in many ways. As hard as it was, it did allow us to get our affairs in order. And even with that, it still took more than a month per institution.
SPEAKER_03:Now, Nav, if I remember correctly, your institution has assets of something over$900 million, and you have roughly 57,000 members. Am I right? Spot on. Son of a gun. I get bonus points. 57,000 members. How many members die in a typical year?
SPEAKER_00:We, gosh, I'm not sure I know the exact number, but I know it's in the hundreds, which was very, very surprising to me. I didn't realize we had that many. Saeed, do you have any idea when we were doing some of the analysis?
SPEAKER_02:Yeah, yeah. When we looked at it, it was getting close to 500 members per year. So, yeah.
SPEAKER_03:Well, credit union membership skews old. Not every credit union, but the vast majority of credit unions.
SPEAKER_00:Yeah, we do have, you know, our average age of a membership is a little older. It's accused around 53, but we're bringing in some younger members now. However, to your point, that's still a very significant number for us. And I think you just heard the use case that Saeed laid out. That's 10 a week, 10 cases a week.
SPEAKER_03:That's 10 a week. That's 10 a week. all of your members definitionally will have some asset that some heir wants because they have an account with you. And that's a lot of, and you're not charging a fee. The credit union isn't charging a fee for this. So that's just basically money down the drain. 100%. I'm not minimizing loss of life or anything. I'm just thinking about this process. I got to do all this work and I'm not getting paid a penny? No, you don't get paid a penny. And often the money walks out the door at the end of the day anyway.
SPEAKER_00:Yeah, absolutely right. And to your point, I mean, it was a very manual, time-consuming and, you know, a process fraught with errors. So let's just call it, put it in a bow. It was a very expensive administrative process for us here.
SPEAKER_03:Now, I... I've worked with FinTechs and interest in credit unions for many years at this point. And what I always tell them is that it's really easy to get your hundredth client, hundredth credit union client. It's pretty easy to get your 10th. Getting your first is kind of like doing bypass surgery on yourself. It's really hard. So what prompted you to be the guy who says, hey, I'm it. You know, I got the sticker on my back. I'm going to do it. I'm going to be the first. Where'd you get the courage to do this and why? I know Saeed wants customers. I know that. The problem is, how do you get one? And you're the guy who said, hey, Call me a fool, but I'm going to be number one.
SPEAKER_00:Right, right. Well, you know, as well as I do, that the fintechs have just stormed the space because they're so deadly effective at making it the processes easier for our members and also maniacally focusing on a problem, a use case to be solved. For the credit union, from my lens, you know, I'm a new CEO and we've implemented Ribbon now for about six months. And I think I wanted to start to build that innovation engine, that end user mindset engine, and almost show the team that this is possible. These FinTech partnerships are not that scary, and in fact, can be very, very mutually rewarding. So being kind of a leader in this or a fast implementer kind of on the bleeding edge of this wasn't very scary to me because the way the product was really laid out, Saeed, was awesome at kind of de-risking the product for us and making it a very economical process and a very collaborative and partnership-based process. So my team kind of dove in fast. So I was looking to help our team, First City Credit Union, become a little more comfortable with some of these buy and ally partnerships versus the bills. But at the same time, as I mentioned earlier, we had a very, very challenging process on our hands that 500 of our members had to deal with every year. And it wasn't a pretty process by any means. And so when we looked at this kind of automated workforce, this digitization, and it just fell in line with our digital first strategy here at the credit union. And we said, this is a great use case for us. It's easy. We can get our hands around it and we can implement it. And speed to market kind of matters on a reasons for us to get in there, aside from that amazing story that you heard from Saeed that really sold it to us because, you know, Ribbon is in it for the right reasons. It was built out of necessity in the right space. And empathy is one of our core values. And this is a way to be more empathetic with our membership.
SPEAKER_03:Now, I would think that if I were an employee in your credit union tasked with dealing with bereaved relatives who are trying to claim an estate, that I would find this to be very emotionally draining work on the one hand and frustrating for me I'm not saying poor me, because I know it's frustrating for them, the relatives too. I wouldn't want this job. So if you said to me, I'm turning the job over to a machine, I'm going to say, you my man, Nav, you my man. Thank
SPEAKER_00:you. The irony though, Robert, is you talk about kind of turning it over to a machine, but really there's a lot of empathy baked into this that we weren't doing as humans. For instance, as you create a case, instead of before it was like, who's got this? What stage of the process are we in? It was very, how haphazard and choppy and a lot of handoffs. Sometimes the member or the beneficiary would be at the branch or they'd be doing it over the phone or they'd be doing it digitally. Now, with this kind of streamlined use case, this one ownership space and the ability to to be able to offer condolences, even, you know, flowers and, you know, messages of support creates a little more empathy with the machines. So it was kind of cool how that happened. And I'm kind of seeing this in some of the technology space too, where sometimes, you know, the machines, you know, bring in that empathy on purpose deliberately.
SPEAKER_03:Now, Are you making any money doing this?
SPEAKER_00:We have. So we've got a couple of beneficiary members that we've been able to cross-sell or retain, if you will, after their significant others or family members passed away. That conversation wasn't happening, quite frankly, prior to this. It was strictly a paperwork process of getting the money out to the beneficiary or the member who most of the time had their accounts at B of A, Wells, and Chase. So we're still in the beginning stages as far as I'm concerned. We're working out the process flows with Ribbon, our internal processes, but the data that this tool can help us really spit out and be a little more relevant to those beneficiaries or surviving family members, I believe the potential is huge for us to continue to retain and become more efficient in the process. Granted, it touches, you know, 500 members out of our 57,000. But it's still a digitized standalone process that's more efficient with the human involved in it, of course. But it's really taken out a lot of the robot work for the humans, which is challenging, getting the right documents and verifying them and whatnot. All of this gets automated in a nice streamlined process flow. So I believe it's going to help us from both fronts, retention of our deposits, but also efficiency. Now,
SPEAKER_03:Saeed, are you fine-tuning your services as you're watching this test case? I mean, you have your rabbit in a cage here, and you can study it and see what you need to do better. Is that happening?
SPEAKER_02:Oh, absolutely. And actually huge credit to the First City team, which is not just member first and relentlessly focused on the member, but also open to innovation and open to feedback. So what we do is we have weekly calls with the operations team at First City. And weekly, we'll talk with folks who work on deceased accounts, who work on deposit operations, fine tune it based off of their feedback. At this point, I would say at least half, if not more of our flow is the design based off of the feedback that's come from the First City team. City team for things like, you know, you can imagine to get into the nuts and bolts of things. Oh, can I optimize a flow, for example, if the Social Security Administration alerts us that someone passes away? Can I optimize a flow if, you know, someone is a trustee of this certain type of account? Can I optimize a flow for IRA accounts? And what we've seen is that kind of feedback has led to really allow it to be a lot more self-serve. You know, when we first started off with First City, we saw it was kind of like 65, 70 percent of cases were still coming in the branch and 30 percent of cases would be coming via web. And then last month, what we saw was 95 percent are web-based, right? So these self-serve options are becoming first because of that feedback. So we're seeing that members, their families, non-members, inheritors, next of kin are feeling a lot more comfortable because we've been able to fine-tune this product as we've gotten feedback from the First City
SPEAKER_03:team. You've developed over time, a lot of expertise in this. So, I mean, a relative of mine died recently, and the executor asked me, how do I get a death certificate? And I said, I don't have any idea. She didn't have any idea. You probably know the answer to that question. I'm not asking you for it, because by now, I hope she's figured it out.
SPEAKER_02:To
SPEAKER_03:people like us, this is like, I don't know, a death certificate? How do you get it?
SPEAKER_02:Yeah, and it's honestly, it shouldn't be... One of the things we hope for Ribbon to be is let people focus on the things that matter in their lives and let FinTechs take care of the nitty gritties, the details, logistics. So what I hope our company can do is just make it so that And not everyone needs to know exactly, specifically, oh, if I need this kind of document, here is where X, Y, and Z need to be signed off, and here's how you get it notarized. I want our company to get to a point where we can just offload a lot of that burden. It's simple and it's intuitive within the flow, where to get certain documentation, how to get it signed, get it signed digitally, and be able to provide it to their wonderful institutions and be able to do that. And in order to be able to provide that flow, you can imagine... Not just me, but the whole Ribbon team had to become experts in this whole process, which we spent a lot of time in the details. Spending time with the deposit operations team at First City, for example, this really gave us the nitty-gritty and the details of what are the different types of documents you need, what are the different flows, how do you create dynamic workflows. So what we're trying to do is become experts so that members, non-members, and characters don't have to be.
SPEAKER_03:Now, from the time you told Saeed and Ruben, okay, it's a go. How much time it lasts before you were operational?
SPEAKER_00:It felt like lightning speed. In fact, I remember the team telling me we're up and running. I'm like, what? Really? So it was, do you remember, Saeed? Was it weeks?
SPEAKER_02:Weeks. I mean, it was weeks. Credit to Nuv and the team. I mean, that is, when you talk about innovation, innovation mindset, and you talk about agile and working agile, I would say from contract signing to going live was the fastest implementation we've had. And they were the first institution in the entire country to have their inheritance flow automated because of that.
SPEAKER_00:Yeah, I think part of that was, you know, that we're small and being a smaller shop, you know, we have 120 FTE. We can be more agile. We can be more nimble. I used to work for a larger institution, about 5 billion credit union, and it was a little harder to get things done there. You know, from an innovation perspective, you had some committees, you had some risk analyses, some hierarchical decision making. And it was just like here was like, let's go. What do you know? Let's do this. What do you need? You know, what are the roadblocks? Let's let's plan it out, let's measure twice, cut once, execute, and empower the team. And so the team was awesome. It was a very, very quick, easy, and I'll say painless implementation.
SPEAKER_03:That is, see, that's why I love to have a credit union on this show, because the fintech guy will always tell me, oh, we implement this. You know, you tell me on Monday, by Friday, it's up and running, baby. Core integration, everything. It's all happening.
SPEAKER_00:We heard that, too. You know, it's like, oh, you don't need any IT resources on your side. And of course, our IT team was, yeah, right. But I believe that it was all very, very smooth and streamlined.
SPEAKER_03:Well,
SPEAKER_00:you don't need
SPEAKER_03:core implementation for this, I don't think.
SPEAKER_02:It's helpful to have core, but you don't need it, is what we always say. It's always helpful to have core because you can automate a lot of those processes, but you don't need core to get started. And again, credit to First City team. They were like, okay, well, if we don't need it right away, let's start using the tool. Let's see how it works. And they really helped us to fire it.
SPEAKER_00:And that's really part of the philosophy here is, you know, progress over perfection and kind of continuous improvement. Let's not look for everything out of the box because then everything becomes unattainable and maybe unachievable or gets pushed to phase two or three, which never comes. So let's just keep it simple. Let's crawl, walk, run. Let's make sure today is a little better than yesterday. And yesterday, you know, tomorrow is a little better than today. And just keep that mindset. And I think that helped us get back to speed to action.
SPEAKER_03:As I indicated earlier, I think also this is a wonderful test case because probably no employee at your credit union liked being involved in this. Collections is another thing where I'm a collections guy and you say, I'm going to automate collections. I say, thank God. I hate making those
SPEAKER_00:calls. We don't want to go down that path. But, you know, to your point, this actually allowed the humans to do what we need the humans to do more of and better, which is be empathetic. So they didn't have to just get, you know, quagmired and process and documents and get right into the process flow that could be automated and pushed off to the robots. But, um, it actually allowed the team more time to sit down and have a conversation and just say, you know, sorry, so sorry, this happened, you know, uh, what can we do to help? And we're here. And I don't know if you know much about us, if you're from outside, et cetera, et cetera. So it was, um, It was, I think, pushing the right processes to the right automation and allowing the humans to elevate. Nobody wants to shy away from these processes because we hire empathetic people and we have wonderful people that care on our staff. And this just allows them to shine more in that space versus have to jump into a process flow.
SPEAKER_03:Now, when a member dies, how typically does the credit union learn about this? Is that... Apparently, Social Security sometimes notifies, but I assume there are other more direct paths.
SPEAKER_00:For us, historically, it's been the beneficiary or the family member that contacts us, and that starts the process. So it's a very reactive process for us. I think the goal is to get a little more proactive using intelligence and data smarter, but maybe I'll defer to Saeed on where we're headed there.
SPEAKER_02:Exactly. I mean, so there's really a few ways that folks can learn about it. As Nev mentioned, the primary ways to the beneficiaries and Mexicans, government agencies, Social Security Administration being the most prominent, but other ones too, like VA, et cetera, they will alert an institution, but generally only if, for example, in the case of Social Security, only if they're receiving Social Security into the account. So you can have Lots of cases, for example, like my dad was a classic case with his credit union. He wasn't getting Social Security payments into that credit union, so they wouldn't have known were it not for me and my brother going and alerting that credit union that he passed away. So what we're doing now is we're implementing the largest master file, what's called the limited access death master file, in combination with AI online scans for things like obituaries, things like social monitoring and web monitoring to be able to proactively alert our customers customers that's the ones passed away so uh first city will be the first ones to to get that kind of you know automation um provided to them which is you know that way you don't there's a lot of I'll save all the details but a lot of operational inefficiencies if you don't know that one of your members passed away can be really costly and burdensome and just so much easier for us to be able to say hey we got news that something passed away you should freeze that account
SPEAKER_03:now tell me some of the operational inefficiencies that arise
SPEAKER_02:Yeah, I can. Yeah. For a few, for example, is you have like auto payments continuing to go and those auto payments go out. Right. So someone passes away and those payments are continuing to go out. And then there's cases of fraud. What if someone goes and tries to withdraw the money and the account's actually frozen? You're not allowed to have that happen. There's a lot of things that can happen from a compliance and regulatory or just from a fraud or cost perspective. There's a lot of reasons why you just want to freeze an account when someone passes away. It just makes things a lot simpler and clearer. So you don't have this back and forth. It's very common for our customers to tell us that they had an account where they just had to go and do something like reclamation with treasury because social security payments came in after someone passed away.
UNKNOWN:Yeah. Yeah.
SPEAKER_03:You mentioned fraud. Nav, is that a concern for you at the credit union, that they're fraudulent?
SPEAKER_00:Fraud is always a concern, and it just continues to grow from a member-to-member type fraud, but cyber threats as well, social engineering, phishing. Elderly are a target. In these instances, sadly, there are people that prey upon beneficiaries and surviving family members, maybe not so much from a fraud perspective, but just from a very unscrupulous perspective in terms of We can help and, you know, we'll take care of it. And then who knows, then the fraud happens. So it's a concern. It's always there. It's omnipresent and it's growing. And sadly, sometimes technology has made that harder because some of these are public records and some of these surviving family members, beneficiaries are targets. So we definitely want to make sure that that education to the survivors and beneficiaries is there so they understand, you know, we are their official partner in this process and we will make sure that we do it the right way um and uh and be wary of you know others that may be lurking
SPEAKER_03:now are are other institutions on this platform
SPEAKER_02:yes yes yes yes yes
SPEAKER_03:how many
SPEAKER_02:We're getting close to double digits now, so we're going to share more for end of the year, but it's been unbelievably exciting being the first one and for Citi being the first one to join with us less than a year ago now. We've only been up with them for six months, and thanks to that partnership, thanks to that feedback, and thanks to those use cases, We've gotten a lot more interest from other credit unions, other financial institutions across the country who say this is not something that we should be spending full-time resources on. Having a bad experience for inheritors is not what we want. Being part of the Great Wealth Transfer is something that aligns with our strategic goals. So, Robert, I believe the first time you and I chatted, more than a year ago now, we were essentially just a few lines of code at that point. And, you know, a promise. Oh, you lied
SPEAKER_03:to me. You lied
SPEAKER_02:to me. No, it was live. It was live. It was just, you know, no one was using it. And the first city wasn't using it and no one else was using it. And then here we are now being able to say that, you know, we process thousands of inheritance claims a month. And we're really excited about that.
SPEAKER_03:Yeah. And as I'm sure you're finding out, of the way credit unions adopt new technology is if you call me, I probably don't take the call. If I'm talking to Nav at the California League and he says, you know, I got this great thing that's really handling this whole problem that we've had. I'll say, tell me more and give me the guy's number or email address.
SPEAKER_00:That's right. That's right. I have one... Are you saying we're lemmings or? No, no,
SPEAKER_03:that is considered the most valid endorsement.
SPEAKER_00:Of course, I'm being facetious, but you're absolutely right. I mean, we listen to other cohort and colleagues that are doing great things and we trust that, right? So there's a high level of trust. It is a very small industry. Everyone knows everybody. It is very incestuous. But having a proven use case beats any firm's marketing and pitch, you know, as far as we're concerned. I used to think we were slow, you know, credit unions are just slow to adopt and make decisions. I think it's more that we're just more deliberate.
SPEAKER_02:I really agree with that. And the number one piece of advice we got as a fintech when entering was find the right first partners, because A reputation precedes folks in this industry. And that if you have the right reference partner, it will change everything for you because folks will know that they have a reputation of being deliberate, innovative, member-focused, et cetera. And if they can vouch for you, it'll do more. As exactly like Nav said, it'll do more than any marketing campaign will ever do. And that has been so true for us. It's just the difference between me saying, I promise you this will be really good versus Nav saying, this is something that we would like for our credit union as change the trajectory of our business.
SPEAKER_03:And he's saying he's actually making some money doing this. It's not just all cost, which is, you know, I'm a credit union executive, and I hear that my interest level goes way up. Yeah, it's a lot of fintechs are pure cost, and that's no fun.
SPEAKER_00:There has to be an ROI, though, you know, Robert, with no matter, you know, what members... investment money we spend. And it could be, like I said, a combination of revenue growth and or expense reduction and or you know, employee satisfaction, member satisfaction, all that comes into play. But we deliberately looked at Ribbon as, you know, what is the return on this expenditure? This is our members' money. And there was a use case there, and we're starting to realize that. As I said, I believe the best is yet to come. We have not leveraged the tool as much as we need to. Quite frankly, and Saeed knows this, we haven't really launched this product to the membership. It's been six months. We've been trying to get the processes right and the training and all of that put into play. So we're just kind of funneling a lot of our members to the Ribbon platform, be it if they come in in person or pick up the phone, which is great. But imagine when we really start to market this as a differentiator. That really hasn't even started yet. So I just see tons of potential here for us.
SPEAKER_03:I've liked this product since I heard about it, really. It's fantastic. It really does alleviate a lot of aggravation that heirs are feeling at a time when they don't really need this aggravation. And in many cases, bills are coming in that have to be paid, and they just as soon pay it out of the estate. But the money's frozen. It's like, what? I can't touch the money? Now, Saeed, first city aside, what do you see the cost structure to a credit union being. I mean, I imagine Nav's an intelligent guy. He probably got a pretty good deal. Yeah.
SPEAKER_02:Yeah, he actually framed it perfectly. We want to do it based off of ROI and business case. We actually felt that from the beginning. We tried in our very early days to kind of just go out there and wing it. I'll tell you right now, that fails. And it fails miserably. Very quickly, we realized you need a business case, you need an ROI. And what we do is based off of a few factors. How do you value member experience? How many resources do you have dedicated to this process right now? So operational efficiency, whether or not we can reduce full-time hours on this particular workflow. So you can put them on something that's higher ROI, for example. So operational efficiency is a big one. And then deposit retention, using those three pillars, we say, okay, you fall into this tier of pricing. So usually, you know, the assets that you have, the number of members that you have, and the amount of time that you spent per deceased account, also known as like, how many resources do you have dedicated for deposit operations on deceased account workflows will put you in some kind of tier. And that tier for us is all about what can make sure that Ribbon can cover its costs and scale the business. But most importantly, can we actually really provide value way above and beyond the investment it takes in terms of monthly costs when it comes to Ribbon? So we tier it. based off of the use case, the business case. And then that way we take an individualized approach to pricing and cost. And so far, what we're seeing is our target is that for every dollar that you're putting in Ribbon, you should be getting at least$2 back. That's really what we wanna shoot for. So we really wanna make sure that you have a very, very strong business case.
SPEAKER_03:What's the size of the biggest credit that's using Ribbon?
SPEAKER_02:We have, I guess, depends on how you mean size.
SPEAKER_03:Assets, assets.
SPEAKER_02:Yeah, 5 billion. So, you know, we're starting to... We're relevant, I would argue, for any credit union at any size. You know, if you're$50 million,$100 million,$1 billion,$5 billion,$20 billion and beyond, you know, everyone goes through this. And so right now, what we're seeing is most of our customers fall in somewhere between$500 million to under$6 billion. And we hope to, yeah, to offer this service to anyone.
SPEAKER_03:Yeah, I would say once you have$500 million, you can... probably afford this service and it will pay for itself and reduce staff time, I think. It's
SPEAKER_00:a... Say, it's a very scalable, very scalable tool. So that's very exciting to us as we're planning to grow.
SPEAKER_03:Now, have you, Say, you must have regionalized this product too. In other words, death and estates in Virginia are different from death and estates in California. I don't know how, I hope you know how.
SPEAKER_02:Unfortunately, very familiar with all 50 states and territories and also what happens if someone passes away abroad. And we've had to create a system that is agnostic because, you know, First City is not going to just have members that are in California. You know, if someone passes away, they might have a death certificate that comes from Ohio. So how do you deal with those cases? So we have dynamic workflows based off of that. And we created a system that as now said, is intended to scale, is intended to be agnostic, and is intended to continue to provide value-added resources and value-added services. So we get really excited thinking, OK, if you have an agnostic system that can apply to anywhere in the country or anywhere in the world, well, what does it look like if you send notes or flowers to anyone in the world? What does it look like if you start giving that member-first experience to anyone? What does it look like when you start offering other kinds of services? So we wanted to start off with the architecture and the platform being neutral and not just contained to one state or region because we knew that would allow us to scale. And we also knew that our customers like First City were going to need that from the start.
SPEAKER_03:Then earlier on, you seemed to indicate that success with Ribbon would pave the way to more fintechs coming into First City. What kinds of fintechs are you looking at?
SPEAKER_00:Yeah, you know, when I say pave the way for more fintechs, it's really paved the way for us to be able to, you know, engage and partner and ally with various other, you know, providers that are tackling some very meaty topics and issues in our business today. You know, so what we are doing is looking at all incumbents, if you will, and on the lending front, we've been engaging with several companies you know, vendors that are helping us now, FinTechs. We're also looking at them from an operational perspective as we start to kind of now dabble into, you know, artificial intelligence agents and workflows of which, you know, Ribbon is a very specialized workflow in that sense. But again, the technology now is just, you know, such a game changer where we have even a lending process, for example, where it was a very manual, labor-intensive, follow-up, back-and-forth type of a process flow can be severely automated now for both member satisfaction, employee satisfaction, get the people out of the jobs that do robot work, and ultimately efficiency and scalability as well. So we are looking at all different fronts of a that have done, quite frankly, a much better job than the entire generic credit union has done by tackling very specific issues pain points and issues and use cases. So it's really becoming enterprise-wide, even member fraud. I mean, we're engaging all sorts of fintechs now to help us be more predictive and prescriptive marketing. We're partnering with a ton of fintechs that are helping us to get the right products to the right members at the right time or have the right conversations with the right members at the right time in the way they want to be conversed with. Prior to these fintech partnerships, we weren't able to do or build all of that. We can't build all of that. We're a small-ish credit union. I have to be careful when I say a$900 million credit union is a small credit union. Some of my$100 million colleagues get very frustrated when I say stuff like that. But I think the$5 billion shops, the$10 billion shops still have issues around these areas and siloed processes and manual processes and redundant and inefficient processes, et cetera. And so we have to buy, we have to ally. And I think our successful partnership with Ribbon has given a lot more comfort to my team that we can do this and we can see benefits, you know, from doing it. Now, we were involved with some other fintechs prior to Saeed, but this one was just such a tremendous use case with such a great story that goes around it that the team has really rallied around that.
SPEAKER_03:All you have to do is tell the employees, hey, These fintechs aren't like our core provider. I know you hate the core provider. Everybody hates the core provider. These guys are much nicer guys.
SPEAKER_00:I don't know how they do it because I see Saeed everywhere. He's all over the place. I think there's a clone or a twin somewhere. It's AI, man.
SPEAKER_03:There's six of him.
SPEAKER_00:He's
SPEAKER_03:doing three podcasts right now.
SPEAKER_00:I wouldn't be surprised.
SPEAKER_03:Before we go, think hard about how you can help support this podcast so we can do more interviews with more thoughtful leaders in the credit union world. What we're trying to figure out here in these podcasts is what's next for credit unions. What can they do to really, really, really make a difference in the financial scene? Can't all be mega banks, can it? It's my hope it won't all be medical banks. It'll always be a place for credit unions. That's what we're discussing here. So figure out how you can help. Get in touch with me. This is rjmcgarvey at gmail.com. Robert McGarvey again. That's rjmcgarvey at gmail.com. Get in touch. We'll figure out a way that you can help. We need your support. We want your support. We thank you for your support. The CU2.0 Podcast.