Hosted by top 5 banking and fintech influencer, Jim Marous, Banking Transformed highlights the challenges facing the banking industry. Featuring some of the top minds in business, this podcast explores how financial institutions can prepare for the future of banking.
Composable Solutions Enables Scaleable Digital Evolution
On today’s Banking Transformed podcast, I'm thrilled to be joined by Brandon McGee, Chief Digital Strategy Officer at A+ Federal Credit Union, who is spearheading their ambitious efforts to reimagine members' digital experiences.
Brandon has a 30-year legacy in banking and technology, having spent time at both large and small financial institutions as well as working at Dell and Facebook.
With leadership committed to being future-ready, A+ FCU has made tremendous strides in digital innovation and user-centric design. In our conversation, we explore how financial institutions of any size can become digital banking leaders, the role of culture change, and the keys to rapid innovation iteration.
On today's Banking Transformed Podcast, I'm thrilled to be joined by Brandon McGee, chief digital strategy officer at A+ Federal Credit Union out of Austin, who is spearheading their ambitious efforts to reimagine members digital experiences.
In our conversation, we explore how credit unions can become digital leaders, the role of culture change, the keys to rapid iteration, and the advice for other credit unions and financial institutions of all types to make their digital transformation path future ready.
Throughout its history, A+ Federal Credit Union has maintained a strong commitment to its members' financial wellbeing, fostering a sense of community, and providing innovative solutions tailored to their individual unique needs.
So, before we dig into what's happening at A+ Federal Credit Union, Brandon, can you share a bit about your pretty long career background and your perspective on the importance of digital transformation at A+ Federal Credit Union?
Absolutely. Thanks, Jim. So, started my career at a credit union Industrial Federal Credit Union while I was attending Purdue University. After that worked for Huntington National Bank in Columbus, Ohio.
And as far as the importance that A+ focuses or puts on digital transformation, for the last two years, our mantra has been digital first and data driven. It's really key and foundational to everything we do for our members.
It's a good question. The skills that a person has translates really well from company to company, industry to industry. It's about communication and collaboration and those components. But the way we execute digital transformation is different just kind of based on those companies.
So, at A+ Federal Credit Union, we're small, we're nimble. But I kind of think of us as just the right size because we've got enough resources, enough focus that we can really compete with the big guys offering the same features, functionality services that you would see at a Chase, or BVA, or Wells. But we're able to move more quickly.
But it's interesting, we talked, I guess it's two weeks ago now, and it really prompted this podcast in that what you were doing at A+ was really unique. Because again, you're able to do some of the things you were wanting to do at other organizations, but able to do it fairly quickly.
But one thing that came out of our conversation was how important leadership was. How have you seen that transform again, across your entire career? How important has leadership been to enable change and rapid transformation?
It's absolutely critical, Jim. And I've been fortunate that each of those stops that I've kind of been recruited at, I was recruited to those because the leader, the manager, the person that had the vision, they were already bought in on the importance of whether it was mobile, digital transformation, kind of any of these topics.
So, when I came in, I didn't really have to convince the executives that we needed to do this. They already knew that we needed to kind of take our digital game to the next level. They were just kind of looking for the right person to kind of help with that.
So, across the spectrum, our board of directors, our CEO, our executive team, they're all in on digital. And again, the collaboration, the communication, the partnership that I have with all those folks, that's what enables us to move quickly and be nimble.
So, when I joined the credit union in 2021, we kind of came in, we laid out a multi-year digital transformation journey that we wanted to accomplish. Less than two years in, we've got more than 60% of that accomplished. And it's because the board of directors and the CEO gave me the capital and the opportunity to really run.
So, just from December to now, we've deployed a completely overhauled, brand new website for A+ FCU. We've deployed Alloy, identity verification and fraud management. We've deployed a virtual agent chat tool. We've deployed live agent chat and we have many more kind of coming in the third and fourth quarter.
So, just within a one-year period, what we've been able to deploy, I credit that all back to our board of directors, our CEO, our leadership team for recognizing the importance of digital, giving us the capital and the resources to do it.
So, you came in in 2021, pretty much at the middle part or end part of COVID, but you came in knowing there were certain things that had to be done. On the top of that list when you came in and saw where A+ was at that point, what had to be fixed first?
So, we took a look at the member experience, the member journey from the very first step where they come into the website, all the way through signing up for the new account, getting registered for digital banking, adding new products and services, interacting with digital banking.
So, we went and kind of leveraging data. If member is number one, data is number two, we kind of begin and end everything with data. So, looking at the data on features, functionality usage, also looking at the data from member satisfaction surveys, mobile app store, ratings and reviews.
All of that data we kind of brought in and consumed. And then look to optimize that funnel at every step, improving or implementing automation, removing friction, making everything clean, easy to understand, accessible and intuitive.
So, brand new website, new online account opening process, automating the new account opening process. Improvements to the digital banking UI, improvements to once a new member was in, the new member onboarding.
So, we're kind of doing a pivot on shifting and reallocating capital and dollars that we had thought we would do for project A. We found that project B is going to be more impactful, help our members more.
Well, it still comes back to leadership. And it's interesting because when you described the path, you really said, “Let me look at the member journey and let's start at the front end, rather than fixing something that might be in the middle that is going to be taking something that's maybe less optimal. And then trying to transform it and then make it more optimal afterwards.”
Within three minutes. So, when I first joined the credit union, this was one of our opportunities to improve. Everything looked very automated on the front end, but there was a lot of manual kind of intervention on the backend.
Implementing Alloy dramatically reduced the time required to open a new account, which in turn led to tremendous growth. I was on the phone with one of our key vendors yesterday, just kind of talking about what they're seeing in the environment, kind of what's happening.
You also mentioned, Jim, starting at the front. The website is our front door. I can improve something in the middle of the funnel, but if the front door doesn't look good, the prospect, the member isn't going to come through.
So, I had only been here less than 60 days, and we kicked off an RFP to do a complete website redesign overhaul. Because if that front door, if the prospect doesn't feel like this is a place that I want to put my money, to put my finances, you're stuck. So, that was job one.
And more importantly, how do you get everybody pulling in the same direction when in the back of most of those people's minds in the back office, they're thinking, "Brandon is bringing digital on board, and digital means I'm going to lose or could lose my job."
How do you get people pulling in the same direction so that you can get a three-minute new account opening process, a digital onboarding process, and a new website all brought on board when in each case, that efficiency on the customer side maybe has to be really changed in the back office?
No, it's a great question. And I think it comes back to the culture of the credit union. So, we are truly people helping people. And so, when I came in and brought a lot of these ideas, I was prepared for some concern and pushback. And it wasn't that way at all.
It was open arms, like, "Please, yes, more. How do we do this?" Because they knew if I freed up people and their time from processing these applications manually, there were other things that we could do that would be more impactful for the existing members.
So, while we did all this automation, it's the partnership or pairing up of the digital with that human experience to just level up everything for the members. So, it was welcomed with open arms and it kind of continues.
That's one of the key concerns related to artificial intelligence that you hear people talk about is, “Will it take my job?” And it's just the opposite. People are seeing the opportunity that it gets rid of the mundane tasks or the things where humans can't really help and frees us up, enables us to really provide that one-to-one member experience.
It's interesting. I'm now thinking in the back of my mind that it doesn't hurt that you're located in Austin, Texas. I mean, that gives you a lot of innovative thinking, and there's so much going on down there in the digital transformations field, in the finance field, and in technology.
And it's interesting, because when you talked about working with Alloy, and I'm going to stick on this for a second because we did discuss this offline, was the fact that I met with a person from Alloy once and I did a presentation that said, "The biggest challenge is that financial institutions will sign up for something then, then they can't get out of the way."
And they say, "Yes, I want three-minute account opening, but I'm going to require a driver's license or a government ID in order to do that." Which immediately slows it down. Or, "I'm going to do a digital account opening. I'm going to require, however, a wet signature to open the account."
So, you stayed out of the way. Is this part of what your background and your history has shown that, "You know what, if I let these organizations do what they're best at and I work to make it so that they can actually do their best.” Is part of the leadership function overall too?
So, from day one, from the project inception, we bring all of those teams, all of those people in so that they can kind of take the journey with us and understand from the very early stages, what is the vision, what's the risk, what's the opportunity?
So, it's about that collaboration, that partnership with all the cross-functional teams, bringing them along on the journey, making sure that any concerns that they have have been addressed because safeguarding our members' money is job one. And so, we start there and then we kind of look at opportunities.
But you're spot on. These partners that we work with … this is one of the benefits of A+ Federal Credit Union as well. We're big enough that we've got a lot of resources to work with but we're small enough, I don't really have to worry about the build versus buy decision.
But at A+, we find the best peers, the best partners, the best integrations. And then through a tremendous tool like Q2, digital banking, we're able to integrate all that and kind of create this unified member experience.
So, leveraging those partners, finding the best partners in virtual assistance, or identity verification, or P2P money movement, and then leveraging all of their knowledge, all of their skills, all of their experience to provide that optimal member experience. We've had a lot of success with that.
And it's not that long ago, but back then, you either bought the entire package from somebody or you didn't buy it. And sometimes it was billed from within. But even if you bought it, it would be a big thing to buy.
Have you found that the whole idea of composable solutions, it's just been just a godsend to an organization like A+ where you're able to take one from column A, one from column B, make it work within an overall digital platform, but make it work in a way that says, "I'm going to get the best of what's out there, and they're already going to know how to work with each other."
100%. Because we want someone, if we pick a solution like a virtual agent, I want to select a company that that's all they do. They wake up, they work, they go to sleep all day, every day thinking, how do I build this right? How do I automate this? How do I deliver the best member experience?
And so, I think we've seen, to your point, a shift in the industry where the composable solution, the SDK, the ability for one credit union or bank to differentiate, to select the integrations that fit their business model, that help their members that kind of meet their needs, clearly a path to success.
I mean, a lot's happened in 2023. Maybe give us an example of somewhere where you said, "I've got to pivot. We have a bigger issue to solve here than what I thought I'd need to solve in June or July, for instance."
So, if you think about our roadmap and kind of how we build the roadmap out, we start with the member feedback. I talked about the data from surveys, mobile app scores, ratings, reviews, that sort of thing. That's probably our number one component into the roadmap.
But then another kind of important layer are the innovations that the product team has identified that we want to bring in and incorporate. Members might not even realize or know that they need this sort of thing or that they'd be interested in it.
It's like I think we just celebrated the 15-year anniversary of the iPhone. No one knew we needed an iPhone. I remember a peer said that he watched someone go into the store, buy it, come out on the sidewalk and fire it up, and then figured out, "What am I going to do with this?"
So, there's those innovations that members may not know they need but we've identified we think they can add real value and benefit. So, AI and personalization are two that are high on my innovation roadmap and delivering for our members.
And so, that's a good example of we had built a budget, we got board approval, we were kind of working on a path, but we saw an opportunity to drive new member growth, to drive core deposits, to see a real step change in the growth of the credit union.
So, in preparation for this podcast, I asked you to give me like some ideas, some of the things you've done in the last couple years at A+ Federal Credit Union from the standpoint of solutions. You gave me what is literally a laundry list. I mean, it was a very long list. Wasn't, “We did this, this, and this.”
You looked at some minute, some very broad solutions. How do you ensure within your organization that these all work together in a seamless way? Because you are really taking one from column A, one from column B, one from column C.
It's a good question. So, and it's not easy. Because there are a lot of different integrations. So, doing the due diligence upfront, making sure that we talk with references, not just that have implemented a solution, but implemented the solution with the same other integrations that we want to bring in.
So, why reinvent the wheel? Talk to someone that has implemented Q2, plus Glia live agent, plus the Posh Virtual agent tool. And understand from them what do they love, what are the opportunities to improve, that sort of thing. So, you go into it kind of eyes wide open. That's been kind of a key part to us.
The other part is being nimble. So, there's always new things that you uncover, discover. And so, being creative in how you adapt and make changes on the fly. We had kind of a vision for how these three tools would come together.
So, I won't pretend that I've got it all figured out or that it's all perfect or seamless. If you shoot for that, forget about it. But we can still provide a phenomenal member experience and make tweaks kind of as we go.
So, it's interesting. It's very clear that you're willing and able to make pivots in a moment's notice. You have an idea of what you want to accomplish, but you're not committed to the point of saying, “Nothing's going to get in my way of getting this implemented.” If it's something that's not needed right now.
Well, in January, we've had major interest rate swings. People are starting to have to look at ALCO again, know what they want to offer on interest rate basis. We had the failure of some financial institutions in March.
We had savings outflows, which created new stresses. We've had the whole digital transformation and new solutions coming to market, but also, some existing solutions maybe being less viable because of all the chains that happen with Silicon Valley Bank.
How do you as an organization stay on top of this? And how do you as a person, stay on top of this so that monthly or however often you meet with management, you can say, "You know what, I've decided I want to take something out of A and put it towards something else."
I think it's kind of multi-pronged. So, again, everything kind of starts with the board of directors and the CEO. They've got to be bought in on the idea, the concept, and also, that they've hired the right people to kind of lead the credit union through this.
So, being able to kind of have that reflection to understand, based on the member data, when something is working or when something's not, being able to share that with your executive team, having the autonomy to make the decision and make a pivot.
And it all comes down to results. So, I talked about 18% year over year growth in new members this year, 20% last year. That buys you a lot of freedom and flexibility to say, "Hey, this team, these people know what they're doing, let them run." And so, it's kind of a combination of all of those factors, Jim.
So, Brandon, before the break, you talked about the importance of humility. And it's interesting because when you said that it prompted a thought in my mind goes back to our beginning where you basically, we met at a conference where you actually started me off on how to build a blog. How to not only learn, but then deploy those learnings in the marketplace.
That's a great question. To your point, years ago, we met when I was running a mobile banking blog. And the genesis of that wasn't really to create a blog. It was a kind of a forced function for me to read something every day and post something every day and kind of get in that cadence.
So, leveraging those tools has enabled me to kind of stay current. If you read something every single day, or maybe read three articles every single day so that you can find one nugget that you want to share with your audience, or your listeners, or your viewers, you really have to stay kind of tuned into the industry, and the partners, and the peers, and what's happening.
So, that's been a tremendous tool. Leveraging contacts, peers. I've formed a lot of relationships with chief digital officers here in Austin and in other parts of the country. Through these conferences that we go to, I made connections in Oregon and Colorado.
So, it's a combination of reading, learning, kind of doing my due diligence. Leveraging peers and partners, their expertise, their knowledge, so I'm not reinventing the wheel. Then going through not a traditional RFP process that's pages and pages long necessarily.
But putting vendors through their diligence, and it takes time and you ask a lot of questions. And kind of through that process, you learn who is receptive, who's responsive, who's willing to give data, share data.
I was wrong. Absolutely critical. Being able to ask for those references, talking with those people, making sure that the partner is able to find two or three or four people that's willing to get on the phone and say good things about them. So, kind of all of those different touch points then you kind of pull together.
And again, this isn't just myself or the product team kind of going through this process. We bring in legal compliance, the CIO fraud, so that all of these different teams are asking those questions and providing feedback, so that I've got kind of advice and guidance from all of my kind of experts across the credit union.
It's funny, US Bank does the same thing. They've made a very key point of saying, "You know what, I don't want somebody to come in late in the game and say, 'I'm going to change everything.' So, I bring them into the front end and say, 'You're part of the solution, let's get it done.'"
And if you know what your destination's going to be, and you have everybody in the room, that's kind of a piece of the action, then you're going to get there much more efficiently, and you're not going to get these delays or these detours in the middle of the process.
You mentioned earlier the importance of data and analytics as far as everything you're doing right now. Being a relatively small organization, A+ Federal Credit Union, how do you get your data straight? Or do you depend on your partners to help you take your data and make it work for you on your advantage?
Yes, and yes. So, again, digital first, data driven. I won't say that we've got it all figured out, but we're on a data journey as well. So, my peer, the partner CIO is going under a tremendous project to get all of the data cleaned, lined upmake, sure we've got the right infrastructure. And so, that's a part of.
And then to your point too, it's also, working with our partners, our largest vendors, working with them to create the dashboards and or the API feeds so that we can get the data into our repository quickly, easily, create our own dashboards, our own reporting metrics.
But yeah, Jim, if I could give one advice to everyone out there, it's start with data, start and end with data. Before you try to launch a project, you've got to have the data to help with the prioritization. You've got to have the data to build the business case.
And then the monitoring, the tracking, the performance of that data so that at the end of the project, you can go to the board of directors and the CEO and say, "You gave us X and we delivered three times that amount."
But I talked about digital first is a part of our mantra. I've talked about introducing this new digital MAU as a KPI, but it also, is tied to goals. So, we have four goals for every employee at the credit union that determines the bonus pool at the end of the year. Digital MAU is one of those key components.
So, we've got the focus, we've tied the goals to the objectives. And then we give the employees, the team, the training, the education, the materials, the updates, the readout on how we're performing against digital MAU and kind of tracking that. So, it's kind of bringing all those pieces together.
And now, more than ever, as there's so much competition out there, we take for granted the customer that has $40,000 in a deposit account and maybe a 20,000 loan thinking, "Oh, we've got them all. We're good there."
Well, that active user really becomes the real key to success, where you're looking at the engagement level. How often are they using this, how many ways can we get them to use this that maybe has nothing to do with a product?
I mean, your organization started around the educational community, and we haven't even touched upon it, but you spend a lot of time and money making sure that your members are financially educated to make it so that their wellness is improved.
But it's interesting because the more you get them to engage in tools that you provide, that's an active user. And that becomes very key as you look at the overall success rate of your organization is how much are they depending on us as opposed to how many transactions. It's a big change.
Early on, you said something that resonated with me, Jim. Our objective is to be the best digital banking experience in the country, full stop. And we have to, because every one of our members has multiple financial institutions that they work with.
So, they've got relationships with big banks and financial institutions like Chase, and Wells, and BVA. They also, likely have FinTech relationships with SoFi and Chime. So, if they're moving between these experiences, they fully expect the A+ digital experience to be as good as any or all of those.
So, finally, Brandon, you've brought in so much to this podcast and we're going to have you back again because there are so many things that we talk about at The Financial Brand, the Digital Banking Report, and on this podcast that really tries to bring home the idea that any organization of any size can digitally transform their organization and move quickly at scale and be very valid.
And what's the payoff? You mentioned it, your 16 to 20% growth, and you're just touching the surface. That's just make it because your front door is open, it's easy to get an account. And all these other organizations have 15, 20-minute account opening processes, you are getting their customers.
But that doesn't come without challenges. As you look over your journey just at A+ Federal Credit Union or even over your entire career, what challenge has come up that right now, kind of keeps you up a little bit at night?
I think one of the biggest things for me, Jim, is prioritization. I'd love to do it all yesterday. I'd love to implement all of this change in a year but there's not enough capital, enough time, enough resources to do it all as quickly as we would like.
The big difference though, Brandon, and you take it for granted, is that you don't let prioritization stifle progress. It's interesting, you mentioned this in fact in a pre-call, that you look at progress as opposed to perfection.
And that is a major deal, and it's hard in financial services where we are all brought into financial services being risk adverse. That was part of the thing that made people want us as we were not going to take risks for the sake of taking risk.
But I think the one message I want all my listeners to think about as we talk about A+ Federal credit Union and Brandon McGee as a person, is the importance of having every person from the top person in the organization, to the person who may be a teller or may not have any customer contact at all, for everybody to be pulling in the same direction.
Of all the organizations I've talked to, you're one of the few organizations I really believe has the whole organization pulling in the same direction, where there's not pulling apart, where the back office realizes they're going to benefit from a more digitally robust organization.
You've seen it in the growth, you've proven it. But I'm giving a little postmortem here, but it's not a mortem. It's a lifeline, that if an organization really wants to make a difference, it's not about the size, it's not even about the budget.
Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. We appreciate the support we have received to make this endeavor a success. If you enjoy what we're doing, please take some time to show some love in the form of a review.
If you've not already done so, remember to subscribe to Banking Transformed on your favorite podcast app and on YouTube for more thought-provoking discussions on the intersection of finance, technology, and leadership.