What’s Happening Needs to Happen in Your Core
For a seemingly innocuous question, it’s definitely the question I ask most. I ask it a lot.
I recently came across an interesting article posted on Techcrunch.com where the CEO and co-founder of FintechOS was quoted as saying, “Our disruptive approach is customer, not technology-driven. We created FintechOS to transform the financial industry, empowering banks and insurance companies to act and react faster than fintech startups, to create smarter, slicker customer experience (emphasis mine).”
I was onsite with a client at the time, helping with their conversion to a new core. I had already asked my favorite question over and over because, while people tell me what the problem is or what the solution is, I seldom hear about what’s actually happening. This article got me to thinking even more about why I ask that question so much.
For example, someone might come in and report a problem such as their transfers aren’t working; or they’ll report a solution such as, we need to fix transfers. If I’m in the room and I hear anything like this, you can expect to hear me ask, “What’s happening?” It can take around 4 or 5 times of my asking this question before I learn what is actually happening. And by learning what is actually happening I learn what actually needs to happen next.
In this instance I specifically learned that bill pay transactions were appearing on an ACH posting exception report because the account couldn’t be found. In this instance there wasn’t actually a “problem”, or at least there wasn’t a problem where transfers weren’t working. They were, and the exception process designed to catch discrepancies in posting between the old core and the new core was also working. It’s why the end user was alerted to a problem. It’s just that the events that happened were initially translated into the set of words “transfers aren’t working.” After asking “what’s happening?” several times, we were able to get down to the bottom of things and quickly target a solution.
Applying this question broadly to the challenges our FI clients bring to us daily has aided DaLand in understanding both what’s happening in our industry and (more importantly) what’s going to happen. The most prominent challenge facing our clients is how to adapt and outpace the ever changing, always shifting landscape of our members’ expectations. We’re seeing negative trends in the industry because fintech startups are nimble, responsive, and ready to swoop in with a super sexy user experience.
So, when we hear things like, “we’re not attracting new membership like we need to.” That’s a problem, for sure. But that’s not what’s happening. After years of hearing this comment and asking our favorite question, we’ve learned that what’s happening is that your CU isn’t adequately positioned to acquire new membership because your technology isn’t aligned with a strategy for keeping your CU relevant to your members.
Relevance is not about deploying a “new” product. That’s because new products are seldom new: due to year(s) old market research and a year to develop and release to market. The fact is, member expectations far outpace the velocity of this conventional product design and deployment process. This formula is, in DaLand’s view, the very definition of irrelevance. If you find yourself there, then you’re on the fast track to arrive at the final destination of irrelevance: obsolescence.
That brings me back around to the quote from FintechOS.
There is an air of familiarity around this. Sure, rather than customer we would say member. Rather than act and react, we would say anticipate and outpace. And rather than customer experience we would just say experience. This is familiar to us at DaLand CUSO because we’ve already accomplished this through the deployment of our Core Optimized Digital Experiences, or as we call it CODE.
For years DaLand has been the seemingly sole advocate for the Core-Centric Philosophy in our industry. The Core-Centric Philosophy requires the centralization of data in a flexible, dense, expanding database in order to extend that data to membership through digital portals. What FintechOS is doing is not possible without the deliberate centralization and control of data. After all, how will you be able to functionally discern the patterns and behaviors and ultimately identify informative trends if your data is haplessly strewn about your and other vendors’ server rooms like jock straps in a smelly locker room?
CODE came about by our relentless asking of the question, “what’s happening” and we realized that regardless if it is a traditional vendor or a one-off fintech the same problem keeps arising for our client partners: if your data is passing through another database or platform before it gets to your core, you’re not in control of your data. You’re trusting those vendors to give you all of your data (they’re not) and then trying to standardize the disparate data sets from myriad separate systems in order to generate reports usable for defining trends, making decision, and executing response. Remember that years long process of market research, product design, and deployment? With centralized data and CODE offerings, that time is freed up for you to focus on anticipating and outpacing your members’ expectations.
CODE is both the progeny of and the answer to the question, “what’s happening?” CODE puts FIs, not one-off fintech startups, in a position to rapidly leverage member data and the features of their CORE database to address member desires, needs, and wants through relevant digital experiences that your members are accustomed to in technology offerings outside of the financial services industry.
So, tell us, what’s happening?