Co-creating a Financial Ecosystem to Help Credit Unions Evolve
By Todd Clark
More credit union leaders than ever before traveled to THINK this May. They came for the thought leadership and insights, the resources and connections, camaraderie and community that the THINK brand has come to represent for more than a decade. Without exception, every person I spoke with said they were glad they’d made the trip and told me they were anxious to share and implement some of the ideas and best practices they’d learned at the conference.
A big topic of conversation this year at THINK was the idea of emerging ecosystems. Specifically, we discussed how survival in the digital era will require all legacy businesses, including CO-OP and its credit union clients, to think and behave as digital ecosystems.
Our central vision for digital transformation is that new markets can be created and competitive advantages gained by building and participating in an ecosystem model. Experts say soon there will be 12 super ecosystems covering every industry from financial services and health, to housing and travel, and payments weaves through all of them – providing a great opportunity for credit unions.
Trivago is a great example in the travel space. By accessing data from every other travel website through the use of APIs, Trivago makes the process of finding, booking and paying for flights and hotels pretty painless. Users no longer have to visit multiple sites to track down the best deals as the site replicates the comparison shopping process and cuts the search time down to less than 30 seconds.
If you’re wondering why Orbitz, Travelocity and others allow Trivago an API view into their data, consider the alternative: these sites realize that ecosystems like Trivago are satisfying a huge consumer demand for immediacy, relevance and personalization. And, they figure, providing a more seamless customer experience will ultimately pay off.
Applying Machine Learning and AI to the Ecosystem
For Orbitz, Travelocity and others in that industry, that pay off isn’t limited to just revenue earned from user fees. When a booking is made thanks to their API connection, they now have the data, which many argue is the new currency. As participants in the travel ecosystem, they are now a part of something that’s larger than their single consumer base.
The fuel energizing these ecosystems is data: It is the key to unlocking digital customer channels and markets, and is essential to running the digital enterprise. In 2017, we processed 6.6 billion transactions. The right use of the data creates a lake of information. We will use this business intelligence to identify and address member needs and expectations, applying a unified digital engagement layer to deliver the desired products and services. At the same time, we will utilize this data to deliver a digitally transformed credit union experience with CO-OP through the MyCO-OP client portal.
As you can imagine, startups in the fintech space are similarly hungry to be a part of the larger financial services marketplace. They are looking for scale, and CO-OP, alongside its clients, can offer that in a big way. A 60-million-credit-union-members way.
The CO-OP ecosystem is becoming an integrated set of payment and other financial services. Through it, credit union members will fulfill a variety of needs with one integrated experience. A big part of being able to do that well relies on the application of machine learning and artificial intelligence to the data flowing through that ecosystem.
That is where CO-OP’s COOPER suite of machine learning solutions will come in. As I shared from the THINK 18 stage, COOPER is our largest technology initiative to-date. It is the umbrella for all things machine learning and AI to come from CO-OP. We are investing millions of dollars in the solution set, the first products of which will be focused on fraud prevention.
Why direct our AI energy in that way? We feel it’s important to shore up fraud mitigation first. Consumers say they care about security, yet just over half have a PIN on their computer. And less than half have a PIN on their phone. More than any other entity in their lives, consumers trust that financial institutions are protecting them. COOPER will position your credit union to maintain that trust, so that as you expand your relationships with members through this digital ecosystem, that trust will carry all the way through.
It’s important to understand the ecosystem we are co-creating alongside our clients goes far beyond omni-channel strategy. This isn’t one product accessed from multiple pathways. This is an expansive group of digital solutions coming together in one unified engagement layer to surprise and delight credit union members. Delivered to them by credit unions, this group of digital banking and other experiences will surpass the expectations of today’s digital consumers. It’s how we will collaboratively deepen relationships, drive revenue and ultimately grow the credit union movement.
Internally at CO-OP, we continue to progress with the integration of our Operations and Information Technology departments. As we shared with you back in April, combining these functions will create a seamless experience for you and enable us to deliver world-class solutions, service and expertise while reducing complexity and friction. We’ve completed our internal realignment to create a single new department known as Enterprise Technology & Services, under the leadership of Nick Calcanes, who is now Chief Operating Officer.
At THINK 18, keynote speaker Brian Solis said: “Disruption is the gift you give to someone else before someone gifts it to you.”
We believe that co-creating our vision of an ecosystem is the gift that will keep on giving.