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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 382 Cotribute and CPM Federal Credit Union on Digital Account Onboarding
It’s typically the first in depth contact a non member has with a credit union and that non member, increasingly, is seeking to open a new account online.
Good luck with that.
The brutal fact is that digital account opening tools at most credit unions are inadequate - and an upshot is a stampede of would-be members who simply abandon the process.
That’s why today’s show features Philip Paul, CEO of Cotribute, a developer of digital member onboarding tools, and Kathy Richardson VP of Digital Products and Services at CPM Federal Credit Union , a South Carolina institution with assets around $650 million.
Here are results touted by CPM after their implementation of Cotribute tools:
- 32% increase in new accounts opened in just 90 days
- 82% reduction in manual reviews due to automated fraud detection and decisioning
- Significant time savings for staff, who are now freed from tedious remediation and cleanup
Sounds good? It gets better. The Cotribute rollout of its tools at CPM was happening so swiftly, the credit union actually asked them to slow down. I have never before heard that. You’ll find out why on the show.
You’ll also find out that there are many, many ways to catch fraudsters in the digital onboarding process.
And these are indeed the tools that Gen Z wants when launching a new relationship with a financial institution.
Listen up.
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Welcome to the CU2.0 podcast.
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:It's typically the first in-depth contact the non-member has with a credit union, and that's when they try to open a new account online. Good luck with that. The brutal fact is that digital account opening tools at credit unions are inadequate. An upshot is a stampede of would-be members who simply abandon the process. They quit. That's why today's show features Philip Paul, CEO of Co-Tribute, a developer of digital member on boarding tools, and Kathy Richardson, VP of Digital Products and Services at CPM Federal Credit Union. A South Carolina institution with assets around$650 million. Here are results touted by CPM after their implementation of Co-Tribute Tools. A 32% increase in new accounts opened in just 90 days. And significant time savings for staff who now are freed from tedious remediation and cleanup. Sounds good. It gets better. The co-tribute rollout of its tools at CPM was happening so swiftly, the credit union actually asked them to slow down. I've never before heard that about a tech vendor from a credit union. Never. You'll find out why CPM asked for the slowdown on the show. You'll also find out that there are many, many ways to catch fraudsters in the digital onboarding process. It's not a Wild West. And these are indeed the tools that Gen Z wants when launching a new relationship with a financial institution. Listen up. Oh no, I'm I'm very interested in this topic, as I'm sure you know, or AI tells me that there's a recent McKinsey report that says approximately 75% of credit unions have really crappy uh digital onboarding tools, if any at all. So how big is the problem as you see it?
SPEAKER_00:Uh, you know, it's actually a pretty significant problem, Robert. And the reason is this when we talk to financial institutions and credit unions, you know, a lot of them had to get something in place uh during the COVID era. And they basically took whatever process they had and just digitized it. But it really doesn't help them compete with the Chimes and the Moneylines and the other folks out there. So I think it's a pretty, pretty significant problem that they're trying to solve.
SPEAKER_02:What prompted CPM to go down this route so um CPM, just much like Philip uh uh just mentioned, is we were forced to kind of get in the digital space uh with COVID and we weren't ready. Um so what we did was exactly what he said. We we took what we knew we did in branch and we tried to duplicate that process in an online experience. Um, and so that worked for us, um for what we were looking to accomplish, which was to give that channel or to get that channel out there for folks to be able to join the credit union. And um, what we realized um a few years down the road is that we weren't gaining uh the membership that or we weren't increasing our membership to the online channel as as rapidly as we could, you know. And so we were okay with um kind of the volume in the beginning because it was it was new for us. So we were just kind of getting our feet wet and we were comfortable. Um, but then um just last year we were looking to um, you know, kind of grow that area of the credit union um and really dig into that digital space and and be more attractive in that space. And so that's why we started looking um at other players in the field.
SPEAKER_03:Now what's your field of membership?
SPEAKER_02:Um for the for CPM Federal Credit Union, our field of membership is um we kind of have uh along the areas in the South Carolina, obviously, we're in the upstate um South Carolina, and then we also have branches and field of membership in Bufort, Bluffton, um, and then Orangeburg and Charleston.
SPEAKER_03:Now, does a person have to have a relationship with a seg to become a member?
SPEAKER_02:So they we do have segs, yes, sir. Um and those are in in all areas we have segs that create eligibility um for the membership. And then we also have um the underserved communities and we have those in the upstate, Orangeburg, um, and in the um Charleston area. And also in the Beaufer area, sorry.
SPEAKER_03:So you have uh fairly specific membership requirements compared to some credit unions.
SPEAKER_02:We do. Um, we also have the ability for a member. So if someone wants to be a member of the credit union and they don't or can't join, um qualify for membership through their family member where they work um or live, work, and worship in one of those underserved areas, um, we have the firefighters association um that allows the member to join for$10. Um, and then they can be a member of the credit union. So we we kind of have a little bit of a way for if they don't meet those qualifications um, you know, through field of membership, uh, then we have that that way for them to join. So we we kind of we do get a lot of traffic through that through that piece there.
SPEAKER_03:I I'm a big fan of what I call backdoors to entry. And and that's because that's how I got into the the the credit union I'm in many years ago. I knew the CEO and he said, Why aren't you a member? And I said, I'm not in one of your segments, man. He said, Ah, if you give X bucks to this uh New Jersey wetlands fund or something, a fairly small amount of money, and I'm all for preserving the New Jersey wetlands. So I said, Great, I'm in. Boom. And it was that simple. So it's uh so I I'm a fan of these things, and uh and it is it's a back door to entry, but it works. So now, how long did it take you to implement the co-tribute solutions?
SPEAKER_02:Well, so coderibute could work a little bit faster than what we were comfortable with, and and so we um we did push back a little bit on our go live date, and like again, nothing on the cotribute end.
SPEAKER_03:No, I I I've never heard this before, really. I mean this is a first where where the the credit union says, hey, the vendor is moving faster than we want.
SPEAKER_02:Oh yeah, they were, you know, we were we were just after signed contract. It was they they could move pretty quickly through the integrations and the API connections. And so um they kind of put it put put together kind of like a baseline and and showed that to us. And then of course we had to critique it. And I will say our vendor um management and select and selection process takes a little bit longer than most. So we we do like to comb through a lot of that. So kind of our back-end process in the credit union um to onboard a new vendor takes takes a little bit of time. Um, and so CodeTribute was ready to go from contract signing. Um, and then that for us, we're kind of you know just digging into the details. And so um it took us um right at um maybe a little less than a year um for us to go live. Um, but it but again, CodeTribute already had that platform, the baseline there for us within their um promised timeline of 60 to 90 days.
SPEAKER_03:That that is a fantastic story, really. And how long, how long did it take you to select a vendor?
SPEAKER_02:Um, I'm trying to remember when we first started this process. Um We did we did a good bit of we did a good bit of uh fielding out kind of some of the vendors in the space and and trying to connect with those. Um let me let me see here real quick. We started wow, started this in around August of 2023, and we signed the contract with CoTribute in April of 2024.
SPEAKER_03:Well, I've I've often told fintechs, they'll say, Oh, we had a great meeting with credit union XYZ. And I said, Well, if it's a no, you might hear in a month or so. If it's a yes, it could take a year. And they say, That's not possible. And I said, Oh, that's actually normal. Am I right about that? Yes, I think you are, Robert. I mean, credit unions are quite deliberate about these choices. It's uh and how many credit unions are are customers of yours?
SPEAKER_00:Uh about 50. And and I think you know, the the interesting Robert, I I think the reason we like credit unions is um, you know, they they collaborate, you know, and like you know, banks who might, you know, compete with each other, collect credit unions collaborate. So if you do a good job with, you know, one of them, you know, they let the other folks know. So we we appreciate that. So our focus is, you know, how do we make them successful? How do we make our clients successful? And that's our primary focus.
SPEAKER_03:You're absolutely right. Credit unions, a happy credit union customer can become an evangelist for fintech. I I know quite a few credit, very senior credit union executives who will collar uh peers of theirs at meetings saying, Yeah, so why are you still using that crappy software? You should be using this. I mean, it's I can't imagine a banker saying this to somebody unless they're lying and the software really is crappy that they're using. Hey, you should be using this, man. That's that's the credit union people really like to talk up good vendors. That's uh now when you win a contract, why do you win it?
SPEAKER_00:Um, you know, it's interesting, Robert. One of the things we actually um the philosophy we have is at the end of the day, it's not our about us or our products, it's really about the our client and the problems that they're looking to solve. So we put a big focus on outcomes. Um so we we work with clients on that really to see, hey, are you getting you know five times more members? Are you reducing your uh back office manual work by 80%? You know, that's what we're focused on. Um so I think a lot of times the reason we win is you know, we're able to show outcomes and and really let the product speak for itself. That's that's a that's a big piece. The second piece is for us, you know, we don't just implement, we want to be partners with our clients. So we have quarterly executive reviews with clients. We're looking at proactively looking at what knobs and dials can they turn to get better outcomes. Um so I think those two I think set us apart. So anytime we get into a competitive environment and you know they actually want to talk to our clients, you know, we come out on top just because you know our technology is you know really good, but we focus a lot on outcomes.
SPEAKER_03:What kinds of outcomes?
SPEAKER_00:So I could share a few different ones. The number one thing, if you look at operational efficiency, um there are a lot of things that you have to do in the background, you know, just to make sure uh that you don't get fraudulent folks in. As you can imagine with digital onboarding, it sounds very simple. Uh, but if you want to really make it super simple for the prospective member to come in, but super hard for a fraudster to come in, you know, there's a lot of different things that you have to do. Um so operational efficiency on the back end, you know, making sure that the manual steps they have to do for fraud checks or KYC, KYB, you know, all of those things we automate. So that's one big outcome that we focus on, um, the operational efficiency. The second one we focus on is growth. And here we look at a couple of different things. One is just the actual new membership growth. You know, what is it now? What was it six months from six months ago? And and we've seen up to 5x increase in new memberships, you know, within the first six months. So that's an important piece that we look at in terms of growth. The third one we look at is you know, actual deposits. So when a new member comes in, you know, what's the average, you know, new deposits, you know, and and we've seen you know very easily, you know, 10,000 new deposits per new member. We've seen 70% reduction in employee processing time in the back end. And and then the last one we look at is you know, what are their goals? We see a lot of credit in saying, hey, we want to engage with younger members. And and we've seen clients where the digital channel has become the number one channel more than all the branches put together. Uh, and that's because they're going after the younger folks and they want to get them in digitally. So those are some of the metrics that we actually look at.
SPEAKER_03:Now, what how big is your focus on after opening activity? A complaint I've heard from many credit units, not regarding your product, but the the the the pro the kind of products in general, is yeah, we have this G Wiz thing that opens up accounts pretty easily, and then nothing. You know, they put the minimum amount in and nothing, nothing. And that's I've hear I hear more credit unions concerned about that. It's a good thing to be concerned about.
SPEAKER_00:Absolutely. You know, and and that's one of the things we've looked at, um, Robert, is you know, we we say, hey, we're the next generation digital origination onboarding platform. And and the reason is that you know, we actually have AI agents that not only help on the acquisition side, hey, who are the right prospective members? What are the segments, that's that kind of thing. But also cross-selling or upselling. So you came in for an auto loan at the highest point of interest when you're super excited about just being approved for an auto loan, we can also say, hey, by the way, we think you know this and this and this might be applicable for you based on that credit union's products. And so the cross-selling piece, you know, getting them to get the second product or the third product is a big piece. Then we have something called a relationship growth agent, and that's really focused on the dormant accounts, right? Which is somebody came in for an auto loan, they don't even know. They they came in indirectly, they don't even know the credit union. But how do we take those dormant accounts and and then make you know make sure that they're engaged members? So we have some specific capabilities around that. So it definitely doesn't stop with just account opening, that's just one piece of it. The cross-selling, the upselling, the relationship growth, they're all important.
SPEAKER_03:Yeah, and credit unions have a psychological problem, don't they? When you say, well, the the new member doesn't have to come in to do the account opening. Kathy, how how did your credit union deal with that? In or in aspects of the psychological problem of saying you're opening an account, you don't have to come in to complete this. A lot of credit unions 10 years ago had tools online, but then at the end of the day, you'd hit roadblock and they'd say, Oh, just come on down. Say, wait, no, I'm trying to do this all digitally. Uh no, no, just come down, it'll be quicker. Um I guess I think they wanted to see if I was a human being.
SPEAKER_02:Right. Yeah, and we we still have those those members that that like those people that potentially want to join the credit union that want to physically walk in, walk into the branch. So we we do switch.
SPEAKER_03:I'm I'm more interested in the ones who don't want to walk, walk in.
SPEAKER_02:Right, yeah. And and so yeah, we we certainly have the those as well. And I think a lot of the ability now um is because we have kind of the, as you mentioned, back door. Um, you know, our field of membership is is right in the states, you know, South Carolina. Um, and we see, you know, some North Carolina, Georgia, Florida, Virginia, um, we see folks in those areas, but um, you know, having the online um account opening has uh we we do see folks um from California, we see folks from up north and and having that ability to go out online and they like our mortgage rates. And so now, you know, they're in New York and they want to apply for a mortgage with CPM because they like our mortgage rates. Uh they can open their account online, don't have to come into the branch and they can apply for their mortgage and they're all set.
SPEAKER_03:Philip, how do you how do you assure the credit union or reassure the credit union that we've this is actually a real living person? We've we've validated that.
SPEAKER_00:Yeah. You know, Robert, I just want to touch on the previous question you asked. You know, is that a different mindset? I think one of the things I find is uh the fastest growing credit unions aren't you know small, they aren't big. They're the ones that are thinking differently. So to your point about, hey, is that a normal thing for credit unions to ask people to come in? It's actually changing. The fastest growing ones are basically saying, hey, we need to support the member where they are. You know, they could start at the branch, they could go finish on their phone, they could start at their desktop, come and finish the branch, or they could do the whole thing on their mobile phone, right? It's really meeting the members where they are and what they're most comfortable with. You know, that's what they're doing. In terms of your question about how do we make sure that this is the right person, we we have a number of different technologies that we employ and we do that you know different ways. So there's liveness checks, it's fraud checks, there's different ways of doing it, you know, with ID, without IDs, there are different ways of doing it. So one of the things we do is we give credit unions options, right? You could do it at the front door or you could do it at the back door, you could do it based on the product. You know, for these kinds of products, we actually want them to come in and fill the application, then we'll actually, you know, do all that stuff. So there's a lot of knobs and levers that the credit unions can use based on products, uh, based on you know their philosophy on what they feel is important. But what we give them is analytics. So they could really look at, hey, what's actually happening? If I do a liveness check up front, what happens? Is that really necessary for this product? You know, they so they have all the tools and capabilities to be able to do that.
SPEAKER_03:Yeah, I'm I'm I remember about 13 years ago, I moved across country into a different state and got letters from various banks saying, hey, come on down. One included a very interesting thing, it was a little coupon for like 200 bucks or something, 400 bucks, I forget. Just for opening the account. And they had digital on account opening, so I opened an account. But to get to 200 bucks, I had to bring the coupon into the bank. Which I I I retrospectively I think is pure genius. Yeah, it was it was literally a half mile from where I lived, it was no big deal. Uh and at the time I thought, well, this is a bit of a nuisance, but what yeah, it's 200 bucks. I mean, ain't gonna kill me. So and they got to say, hey, I'm really alive, and I I seem to look more or less the age I'm claiming to be. Yeah, okay. So I mean, am I being paranoid or were they actually doing that?
SPEAKER_00:Yeah, creepings now. I mean, these things they're very sophisticated, Robert. We give them the tools to be sophisticated. So, in some cases, um, you know, for example, denials, right, on a loan application, there are instances where they'll say, hey, you know, we really or don't want to deny it, let's put in a review queue, let them come in, let's actually talk to them and then figure out, you know, should we actually deny them or should we actually approve them? So I think there are instances when, you know, you may actually want them to come in just so you could actually get to know their situation a little better. But uh again, if you have a platform that gives you all the capabilities where you can actually decide how you want to configure it, then then you have the option. You have the option of changing it, you know, um, you know, as you get more data.
SPEAKER_03:Now, Philip, how do you uh you're gonna get to do a little sales pitch here? Uh a credit union, I'm looking at your your tools and say two others, the finalists. Why is yours better?
SPEAKER_00:So there are a few different reasons for that, Robert. I think the the number one thing I would say is our outcomes are better um than than what we've seen out there. And you know, our customers have actually told us that. I think the second piece is this, you know, you touched on a simple thing when we started the conversation about SEGs. You know, Kathy, you know, do you have to be part of a seg to actually come in? See, one of the things we're hearing from our customers more and more is our platform is very, very configurable, and it's a low-code, no-code uh platform. So the which basically says, you know, Kathy and her team of business users who are authorized can go in and make changes to the flows. They could change the copy, they could change, you know, a lot of things like that. If Kathy's team has a huge IT team, we give them a developer portal so they could go configure it as much as they want. But the the benefit is we give them complete configurability. So if you're part of a seg, we give them the ability to co-brand it with the seg or private label it to the seg. We give them the ability to embed these flows anywhere you know within the seg. So we give them not only a capability to onboard people, but really to a broader capability to distribute their financial products across their own whole digital ecosystem of partners. So that's another you know, differentiator. You know, we I remember a bank client of ours, you know, said that. They went through an RFP process, got the top three, and did all the, and you know, the other two are much bigger than us. But really, they came down to this and said, hey, you guys are much more configurable and you give us the tools to be able to configure it. If I want just something that works out of the box, that's set a certain way, then you know there are others out there. So that's one piece. And then I think the last piece is um the use of AI. AI is probably the most overused term there is, and and we actually get annoyed by it. But if we use AI for the right use cases, it can be pretty powerful. So the way we use AI, we use generative AI, we use deterministic AI. Um, and the deterministic AI is the explainable ball. Think of it as a glass box, right? So it makes decisions for you, but it tells you why it made a certain decision. So it's explainable, auditable, you can explain it to auditors. So I think the the fact that we have generative AI, agentic AI, deterministic AI, and the right human in the loop process, I think that's a secret sauce that we have that we haven't seen our competitors have. That's that's at least what our our customers are telling us.
SPEAKER_03:Uh Kathy, would you agree with this?
SPEAKER_02:Certainly. That was one of the reasons the the configurability and the customization um and having access to to make those changes ourselves was very con convenient. Um in the space we were before. We had to submit support tickets, and then you know, that had to become a project, and then there were costs involved. And so it was very attractive that with the Cotribute platform, we could go in and we can maintenance those screens. If we saw something that maybe um was, you know, not catching someone's eye. We want to change a visual, we want to change the tone, we want to change colors. Um, we have the ability to do that at our fingertips with just a simple login. And um, that was very attractive to us.
SPEAKER_03:How did you do the final testing for this product? And yeah, if you're doing like a new fancy dancy uh debit card, usually the final testing is a large employee group. That wouldn't work in this case, would it? I mean, how did how did what was the final thing where you said, wow, this really does work?
SPEAKER_02:So what we did was we did a um kind of a soft launch and we allowed our um in branch uh FSRs to walk through the online account opening uh the onboarding link with um opening in a member account in the branch. And so we were able to test that experience, uh, making sure everything mapped as it should. Um so you know, certainly that all the as were dotted, the T's were crossed and everything. Once we were able to launch this, was was we were we were gonna work those things and everything would connect to the core as it as it should. And so having the ability to um leverage that in the branches uh allowed us to, if there were any disconnects, um the member wouldn't know and they could switch right back to the core and their old process, and that account would be open. So that was a very convenient way for us to kind of um pilot this process.
SPEAKER_03:Now, do you have account opening both on online on a computer and in a digital phone?
SPEAKER_02:Correct. So the plat the Cotribute platform works on both experiences. Um you can use a desktop login, a web browser login, or you can do it in your mobile phone. And one of the other attractive things about Cotribute is that experience looks the same. And so um, you know, it the screens will minimize and maximize depending on the member experience and what device they're using. So each person using different devices is going to see the same screens, the same pictures. Um, everything looks similar.
SPEAKER_03:Do you have any uh data about uh what members are prefer to use? In other words, do you have more phone or more web?
SPEAKER_02:That is not a data point that we have um been tracking or have access to that I'm aware of.
SPEAKER_03:Philip, do you track that? Not necessarily for this credit union, but in general.
SPEAKER_00:Um actually we we do um track that, Robert, and and it varies based on region, based on product, um, you know, based on the credit union brand, based on the demographic that they're targeting, a lot of different things. But I think um one interesting thing that you know Kathy was sharing was um the number of you know support requests that came in from people that were coming in. I thought, Kathy, that was um really interesting what you shared before. That might be relevant to Robert's question as well, in terms of the support requests from prospective members that are going through the flow.
SPEAKER_02:Certainly. So when we we have members, um, well, our contact center obviously fields the calls. And so in our past experience, um, we received several calls. Um, and there were lots of calls of members getting stuck in the flow. Um, you know, their device was not compatible to take the picture of the driver's license. Um, uh, you know, they were having trouble. Most people who were using a desktop were trying to scan their driver's license. Um, and so with the Coderibute platform, when they get to the identity verification piece, um, one of the things that is convenient is that again, every member has the same experience. And because of the Plat integration, um, the member just simply scans a QR code and and it walks them through the process. So it's it's very automated. Um, it prompts them on what they need to do. And so that has drastically reduced the number of calls that we receive in regards to questions about our applications, members getting stuck in the application. Um, and those again, uh, you know, that takes that volume out of the out of our contact center and allows them to fill those calls for you know other issues that the members may have.
SPEAKER_03:Well, Philip, uh off-beat question, but does a SEG add complexity to your process? In other words, it's fairly easy to get a driver's license or something like that. If I claim that my my father is a retiree of such and such corporation, so I'm I'm eligible. How do you verify that?
SPEAKER_00:If you think of it, seg is just a different channel that the prospective member is coming through. Um, so we could have custom flows. So one of the things we do is um, you know, Kathy's team can have a flow that they use in the branch, the slightly different one if they want to use it for a seg, a different one if they want to use it for another SIG. So that's one thing. The other thing is because we um have some really cool technology on embedding with the right SEG partners. So let's say you had a Fortune 500 company uh that was part of your SEG, we could actually integrate it right into their portal. So just imagine if IBM was the SEG, you could have the flows embedded right into the employee portal, in which case it makes it even simpler because we could get a lot of the credentials, a lot of the identity. The information from that system. So it makes it super simple for them to actually onboard onto, for example, a health savings account.
SPEAKER_03:So what what what are you hoping to add to your product now?
SPEAKER_00:You know, there are a few things that we're looking at, Robert. Obviously, you know, on the on the AI growth agent side, you know, that's a big piece, and we're continuing to add to that. Um, both on the acquisition side, the cross-selling side, and the and the relationship growth side, that's that's an important piece. Um, and then you know, we we also have some um new stuff. As you can imagine, a lot of people are going to be making decisions not through Google search anymore, but through LLMs, right? They'll they'll use you know language models like you know, OpenAI or Anthropic or Cloud or some of those to actually do research. So we're actually wanting to help embed some of these credit unions, you know, products even in those language models. So, you know, right from a search, if you feel that, hey, I want to open an account here, could you actually you know open up right away from there? So we're looking at how do we actually help the credit unions distribute their products even further, not only through SEGs, not only through the digital channels, but could they actually do that even through some of the learning, you know, the language models that are out there?
SPEAKER_03:Hey, before this call, I asked Google Gemini what the field of membership of the credit union was. Historically, I would have gone to the credit union site, but I was cutting to the chase and Gemini, just tell me what the field is.
SPEAKER_01:Yeah.
SPEAKER_03:And uh um it more or less worked, I think. Well, it seemed to be a complicated list of paper companies, so which is not a business I know a heck of a lot about, but we do are going directly to to the uh AI agents at this point, so right.
SPEAKER_00:So I think that's where we're putting a lot of our RD now is how do we help the credit unions make sure that their products are embedded there? They you know and they could you know open or you know, cross-sell, you know, right there. And that's that's an important piece.
SPEAKER_03:What's the size range of your credit union customers?
SPEAKER_00:Um, you know, our goal, uh Robert, with our platform is to support any size. Our smallest is probably 10,000 members, our largest is 2.3 million members.
SPEAKER_03:And uh roughly what would you say the assets are?
SPEAKER_00:Uh AUM can range from at the low end 150 million AUM to at the high end, um, you know, close to 200 billion AUM.
SPEAKER_03:That's 150 million assets. That's that's that's a lot of credit unions that you're covering.
SPEAKER_00:Yeah, yeah. And and that I think that's the big thing, right? I think so. We started off on the on the big end, so you know, with the 200 billion with you know, with a B, that's where we started. But you know, our goal was to say, hey, if we want to help credit unions, we've got to be able to serve up a platform that's cost efficient for them, but also that works with the smallest credit union so they get the tools that the large ones have that the big banks have.
SPEAKER_03:Now you also serve as banks. So what's the difference between the product for a credit union and the product for a bank?
SPEAKER_00:So on the platform side, really there's no um difference, Robert. There's some unique things. Uh SEG, for example, is unique on the credit union side. But banks have relationships, so they may not call it a SEG, but they'll actually use product, they'll distribute products through um, you know, other companies as well. So that's actually you know different. As you probably know, membership, you know, that whole process is unique to you know credit union. So there's some variances in terms of the actual process and the customer onboarding, but the platform we use is the same.
SPEAKER_03:Um more and more credit unions have a regional field of membership that makes it really pretty simple.
SPEAKER_00:Yeah.
SPEAKER_03:And the real complexity with credit unions are these backdoors. You know, Chase does not understand backdoors to to uh becoming a customer. They'll find a way to make you a customer. Just walk by one a little too slowly. Uh and if you're wearing nice clothes, you'll be pulled in. But it's uh now do you have customer attrition?
SPEAKER_00:You know, we've lost two customers uh so far, Robert. And and one of them was because um of a failed you know merger and there was some intricacies around that. Another one the same way, they actually bought a credit union that had a really, really long um contract, and you know, so they had to you know take that. So that's that's that's those are ones that we've actually lost. But again, we're grateful to our credit union, you know, customers who trust us, and so you know, we don't take that trust lightly. We want to earn that trust and we want to keep that trust.
SPEAKER_03:Do you need core integration?
SPEAKER_00:We do. So we're integrated with Correlation, we're integrated with Jack Hendry, with uh Scimitar, with Silver Lake, we're integrated with Pfizer, with Portico, with DNA, we're integrated with most of the digital banking providers that are out there. You know, Bano is a good example. Um, so yeah, we and and also with the LOSs as well. So uh you already have those tools, obviously. Yeah, you know, and that's why, you know, like Kathy initially was talking about the the speed. I think our fastest implementation has been 19 days. Um then you know, just this past week, you know, we actually turned around a bank and it was 45 days for the complete you know consumer loan application across you know multiple products. And the reason is because we have all the all these integrations built in. We have 90 plus you know products, deposit products, loan products, investment products, you know, wealth management products, insurance products, all uh best in class flows defined. So you could take it and very quickly modify it and then launch very quickly with it.
SPEAKER_03:And how long did it take you to develop your core middleware?
SPEAKER_00:We did a lot of you know, payment processing work, Robert, for about four or five years. The the last part, which is the last five years, have been focused just on this, on all the integrations on the digital onboarding. Because as you imagine as you can imagine, you know, having to support small credit unions, large ones, small banks, large banks, there's a lot of different nuances, a lot of different integrations. So we've been working hard at it for about five years now.
SPEAKER_03:Yeah, I just I covered uh mobile banking's rollout in the credit union world. And what was funny was a lot of these companies would have one or two toolkits. And you could call up and they'd say, Okay, what's your core? Oh, we don't have that. Uh well, is there a problem? No, there's no problems because it could cost a lot of money to pay us to develop integration tools, yeah. And uh, and that often ended the conversation right there, so which was unfortunate. But by now, enough enough vendors do have uh a pretty big range of cores that they're integrated to. You have a complaint about credit union customers. What is it? Other than they take them a long time to make a decision.
SPEAKER_00:No, I I I think you know, actually, we we don't have any um complaints, Robert. And I think even on the acquisition process, I think we we appreciate the rigor and the deliberate nature of how thoughtful they are. Uh and and we appreciate that because at the end of the day, um, the worst thing that can happen is somebody, you know, picks us quickly and for some reason it's not a good fit. Um, so we we take those relationships very seriously. So we're actually very deliberate and thoughtful in terms of sharing what we can do and what we can't do. And and we're so grateful for you know, Kathy and her team at CPM um for you know just the partnership that they've had with us and and and working with us. So we're grateful for these opportunities.
SPEAKER_03:Now, Kathy, with with this uh contribute technology in place, are you looking around? Is the credit union looking around saying, geez, we have this spiffy uh onboarding process here? Now we really ought to be upgrading X, Y, and Z. So you you you buy a new, nice new, really modern refrigerator. It even talks to you. Then you look at your your your stove and you say, God, that thing's old. I want to get a new one. I mean, you follow my logic here. Is are you experiencing any of that at the credit union?
SPEAKER_02:Certainly. I think that with technology, that software is always changing and um integrations and vendors are always coming with with new things. So um, you know, as contracts are up for renewal, we're always looking to see, you know, what's in that space. Are we, you know, where we are, is is that up to date? Is that the most modern, you know, thing, or do they have the technologies? I think we look more now as not necessarily stay because we're comfortable, but you know, what other vendors are in this space and what vendors are growing in that space? Um, we always want to look for forward-thinking vendors because again, the things and systems and technologies are are ever changing and and growing and rapidly. Um so, yes, certainly, um, when we have any contracts that are coming up for renewal, um, even if they're not, you know, if we if we see something out there in this space, um, we always share that internally. Um, you know, hey, this is this is out there. So you may want to keep that in your back pocket if your contract, you know, expires in a few years and start looking, you know, for future um integrations.
SPEAKER_03:Who do you benchmark your technology against? What what kind of you don't even have to name the credit unions, but give me some idea of their size, or maybe you're using banks.
SPEAKER_02:No, typically we look for other credit unions in our market um and other credit unions about our size to see kind of what they're what they're doing. Um and we we also look at other credit unions that have other partners or other vendors or connections. And so um one of the things that we looked for when we were looking for the online account um vendor is we we looked at core, you know, who else is on our core. We looked at our online banking um providers. So those are huge when you think about um looking for a new vendor, not just comparing um credit unions in your area, but more more so credit unions that are similar to you who have some of the same systems that you have. Um, because just as Phillips said, those integrations are important um when it when you come down the line. So again, not just getting that member onboarded, but what can you do after that member's onboarded? Um, if you have an integration to our online banking, can we get them set up with an online account and then you know move them right into registering for online banking? Um, that's something that we're working towards um here in the next quarter. So I think, yeah, looking at credit unions, our size in our market, um, but also credit unions that are similar in in some of the software and the integrations and partners they have.
SPEAKER_03:Now, I everything you said there was good and makes perfect sense. But at this point in the conversation, I usually say, and you get to curse at me if you want to, you gotta be comparing yourself not just to them, but to Chase, to Chime, to monsters in this field, because more and more financial service customers are going to those institutions in part because the technology is just so damn good.
SPEAKER_02:Right.
SPEAKER_03:Yeah, so do you look at them?
SPEAKER_02:We do, we do. I think as a credit union, we're a little bit more conservative.
SPEAKER_03:Um, and and so there's a lot of risks, I think, in some of those um, some of those fintechs can lose money for the next hundred years and still stay in business. That they but Chase can't.
SPEAKER_02:Yeah, so we certainly have to compete with them. Um, but I think that that's kind of where we we see that um, you know, this is the a lot of the fintechs in the space, um, you know, as a consumer, um, people are just attractive to what it offers to them and not necessarily when we're when you're on the other side of that in the credit union space and and you're looking out for your members and protecting them. Um, I think that you have to you have to be cognitive of what's in the space. But we we can't we can't compete in that same space as it relates to certain risks and compliance-wise.
SPEAKER_03:Um elaborate a little bit about the compliance.
SPEAKER_02:Well, that's huge for the CPM team, and and Philip can probably share some of that with you as far as is our integration. So we still very much like to to have all the checks and balances. Um, and so when he mentioned earlier in the conversation about non-documentary versus documentary identification, um, we know that that's that's a that's a that's kind of a drop-off rate or a spot in the application, is some folks are going to abandon your application when you ask them to verify their identity um with a piece of you know, a government-issued ID. And so um all we know that competitors in that space are not asking those questions or they may forego that step, but in the credit union, that's important to us. And so that is something that we require on 100% of our applications. Um, and and so we have to kind of balance that, right? Um, and so we're we're not willing, our compliance team is not willing to let that go. And so we, you know, we had to satisfy that um ask.
SPEAKER_03:Well, let's be honest, phones have made it easier for the consumer to comply with that. Yeah, historically, how do I scan my driver's license? Where do I go? What do I do? Well, now you just snap a picture of it or something. Philip, uh, compliance, how is that an issue for you?
SPEAKER_00:Yeah, you you know, I think this is a very interesting topic, uh, Robert. And this is one area where I think we're adding a lot of value to our credit union partners. And the reason is this, if you really look at it, um, compliance in this one end of the spectrum, right? How do you manage risk? And the other end of the spectrum is how do you actually make it super easy for people to come in where you know you ask them the very minimum stuff based on what you do. I think that's one of the areas where we've actually shown, hey, what are Chime and Moneyline and Robinhood doing where they, you know, some of them don't have the compliance needs, but some of them do. Some of them are regulated entities. So looking at, hey, what is Chase doing? What is you know um uh wells Fargo doing and bringing some of those best practices in is part of what we do as well as you know in the implementation process. And I think to Kathy's point, you know, there are some folks in compliance who have maybe a dated view of how they look at things. But I think it's it's really you know going through and helping them understand what other folks are doing. And and we're seeing a lot of um success with credit unions where they'll actually say, hey, let's look at this together for these kinds of products. Um, we don't need to do this, this, and this. For example, if they're already an existing member and they're asking for a credit card, we don't need to do all of these things because we know certain things about them. So there's something, so we have what we uh call you know conditional approval, those kinds of things. We have a lot of ways where based on product, based on who it is, you could have knobs and dials that you could turn. So you make the friction as low as possible. But for the right products, making sure that all the compliance checks are you know double and triple checked. So the the trick is you know understanding that we do compete with other regulated entities who figured out how to make it frictionless. And and we have to you know do that as well.
SPEAKER_03:Does either of you have something you've been dying to say that I wasn't smart enough to ask you? And if you do, now's your chance.
SPEAKER_00:No, this has been a great conversation, Robert. I appreciate it and uh appreciate the work that you all are doing at C2.0 as well is you know, really educating all your listeners on you know what's new, what's exciting, what are people doing, what are best practices. So we appreciate that.
SPEAKER_03:So, Kathy, you don't have anything to say, or do you do have something to say?
SPEAKER_02:Well, no, I know likewise I want to thank you for the opportunity to do this, and I think that it's been great conversation. Um, I think one of the things that we didn't mention or discuss, and I'd and I'd certainly like to draw attention to it, is one of the one of the game changers for CPM has been the the fraud tools that the Co-Tribute platform offers. And so um just a quick little tidbit on that is um their fraud tools have significantly improved our operational efficiency um by reducing our staff hours that we previously spent on um post-fraud remediation and account cleanup. So uh right now we're not seeing um those fraud accounts hit the core. And so we we are certainly appreciative of those tools that come along with the Cotribute platform.
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 mega 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 RJ McGarvey at gmail.com, Robert McGarvey again. That's RJ McGarvey 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.