Embrace change, take risks, and disrupt yourself

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.

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Why a Big Bank Executive Jumped to a Digital Credit Union

Founded in 1935, Alliant Credit Union was created to serve the employees of United Airlines. With most members traveling across the globe, the top 10 credit union had far fewer branches than other firms its size. Today, it has transformed itself into a digital-first financial institution with no branches and a nationwide presence.

To cement its leadership position, Alliant named Dennis Devine as their new CEO in mid-2020. Prior to Alliant, Devine held senior roles at KeyBank, Citizens Financial Group and PNC Bank.

To understand what makes Alliant unique and why a legacy big bank executive would want to ‘downsize’, we are joined by Dennis Devine, CEO at Alliant Credit Union. Dennis shares his perspective on how Alliant delivers the best of digital while still meeting the expectations of a great human experience.

This episode of Banking Transformed is sponsored by FIS.

The way we move money is changing. We want to send money in real-time—to the other side of the world. We want everything in one place, integrated, seamless and on our devices. Embedded, fast, standardized, frictionless and secure. These are our Financial Futures.

The Financial Futures podcast by FIS explores fintech innovation and the trends that are already transforming the way the world pays, banks and invests...across the globe. And the mechanisms we’ll need to prosper in this brave new landscape. Is the world’s technology up to the challenge? Are we? Find Financial Futures on your favorite podcasting app.

FIS. Advancing the way the world pays banks and invests.

More at: https://feeds.transistor.fm/financial-futures

Jim Marous:
Hello, and welcome to Banking Transformed. I'm your host, Jim Marous, owner and CEO of The Digital Banking Report and co-publisher of The Financial Brand. Founded in 1935, Alliant Credit Union was created to serve the employees of United Airlines. With most members traveling across the globe, the top 10 credit union had far fewer branches than other firms its size. Today, it has transformed itself entirely into a digital first financial institution with no branches, but with a nationwide presence. To cement its leadership position, Alliant named Dennis Devine as their CEO in mid 2020. Prior to Alliant, Dennis held senior positions at Key Bank, Citizen Financial Group, and PNC Bank.

Jim Marous:
To understand what makes Alliant unique and why a legacy big bank executive would want to downsize, we're joined by Dennis Devine, the CEO of Alliant Credit Union. Dennis will share his perspective on how Alliant delivers the best digital experience while still meeting the expectations of a great human experience. So welcome to the show, Dennis. While it's been a while since we have talked, a lot has certainly happened in the past year. Obviously, we've all been impacted by the pandemic. But you also made the decision to join Alliant Credit Union when the coronavirus had already disrupted the entire banking industry. Probably even more interesting is the fact that you jumped to a modest sized credit union from Key Bank, where you'd been president of the consumer banking division.

Jim Marous:
Prior to your time at Key Bank, you spent time at Citizens Financial and PNC as well. So I've got to go with the first obvious question. What prompted you to move from a 20 year career in a large branch based bank to Digital First Credit Union?

Dennis Devine:
Digital First National Credit Union is a good start to that answer. A ton of what we do is identical. So after a couple of decades at some remarkable institutions with really incredible people, you learn some things about how to do good work in the context of a good financial services organization. But Alliant is very unique, National Digital Credit Union, not many can say that. We own our uniqueness. Jim, we've got an incredibly different model, 100% digital with a 24 by seven member care center that's attached to it. But you look at aspects of the business and it is ripe for doing some incredible things for customers. We call them members in the digital age, and so that's what's prompted the exciting move.

Jim Marous:
So in following your career through many of your stops, one quality you are known for is being a change agent within the organizations that you serve. You really tended to be a person that moved things forward, moved things forward rather quickly in a lot of cases, compared to what was done in the past. So was this change to Alliant more of a natural progression that mirrored the digital transformation that's taken place in the industry as whole?

Dennis Devine:
It's fun to hear you describe me as a change agent. My first job in life was as an attorney, which doesn't always come next to those titles. Shortly thereafter, I was a CFO. Any change comes from a couple of things. One is being obsessed with what your customers or members want, and so just spending an enormous amount of time looking closely and understanding that. And then the second is listening to your team, empowering your people. The best part of any role is being surrounded by incredible folks who are doing incredible things and seeing that happen. So yeah, there's an opportunity to do that.

Dennis Devine:
When you work at a nimble organization that has the ability to do things on a national scale, you can make change happen relatively quickly. And we're already starting to see that at Alliant. We've grown our membership 20% this past year.

Jim Marous:
Wow.

Dennis Devine:
We've embarked upon some national influencer strategies, and we think we're just getting started.

Jim Marous:
By trade at least, you're a legacy banker. And I hate to say that, especially with somebody like you, who you really enjoyed change. A lot of bankers who've been in the banking industry a long time really hang onto what they've learned and what they've done well because it's comfortable. Plus, we're all surrounded by other bankers that are similar to us. I kid about the fact that at a midsize organization, usually you have a situation where you have all these legacy banks that came up through the system together, that played golf together. I hate to say it, but mostly white males, and there wasn't a whole lot of change going on. But what part of your role as a legacy banker was most helpful as you embarked upon your new responsibilities at Alliant?

Dennis Devine:
The ability to see the entire landscape. So we are organized as a national digital credit union, but no member of ours thinks about us in those terms. They face all the competitive options that exist in the universe, from the largest national banks, to the neo banks, to the fintechs, to the other technology partners. And so I think that perspective is really helpful in terms of seeing strategically where we fit. The partnerships mean everything, and so I've got a couple decades of partners in the industry, talent that I know, technology partners, pick your category. And especially at our scale, we are more reliant on strategic partners than most would be. We're not going to go build things that we don't have unique competitive advantage to go build. And so those relationships help in significant ways.

Dennis Devine:
When you are in the fun and guts of a big complex organization, you also appreciate the power of end to end perspectives, bringing the member experience through the entire journey that the member's going to have. And so I think there's a lot of things around those traditions, which really help.

Jim Marous:
So on that concept of partners, our research has found that because of the many moving parts to better serve the consumer, the ability to inspire innovation and to be agile in a change management organization, has really become more difficult. I'd mentioned to you in the pre call that I've met with a lot of bankers lately, and the number of priorities that everybody has, the number of things going on makes it very difficult to move forward. But I would imagine that one of the ways you keep up with these market changes and the expectations of your members is that you do work with the partners and solution providers. So you find this is a ... I mean, I believe this is the only way a company can survive because they can move faster and be more agile, and can push the elements forward in a way that you can't do yourself. So you find this to be a pretty important component of what you do at Alliant.

Dennis Devine:
Essential. And we've invested in some super talented folks, and learning and development of our people on how to do it. It's interesting, Jim. How many courses are there in the world on how to be a good partner or a good partner manager? And so we don't call our procurement team our procurement team. We call it our strategic partner management team. And it's all of our jobs. We're really thoughtful about who's the executive owner and who's the partner owner. But a week ago, I was in a meeting, and we were hearing from a senior leader at one of our partners. And what this person said was, she said, "Alliant stands out as among our very best. People ask, 'How can we partner better?' And we point to the relationship we have with Alliant."

Dennis Devine:
That gives me chills because in a world where scale matters, finding folks that you can work with, and that doesn't come without hard work, effort, honesty, authenticity, and what those interactions look like back and forth. And believe me, we're not perfect, there's plenty of work to do every day on those fronts, but we do think that is a critical ingredient if you're going to be successful in this industry, to take those partnerships incredibly thoughtfully and recognize win-wins must occur. The other party to your partnership has to be successful. You can't get everything that you want. You have to give. And when you do that, usually the sum is greater than the individual parts, and people can really thrive with one another.

Jim Marous:
So it's interesting, you talk about the change agent and the partnerships. But while you're a top 10 credit union, you're still relatively small in the whole scheme of things as far as financial institutions. How do you get your partners, your strategic partners, your solution providers, to give you the attention that's needed to move at the speed that you have to as a digital organization? I mean, it's different if you're working for what I'm going to call legacy organization, your comparison is the speed of what you were working at before. But a digital organization by the nature has to work faster to keep up with the expectations. How do you get the attention? Is it because of the way you actually serve your partners? Or what else do you have to do take a place with these large organizations that sometimes your partners?

Dennis Devine:
There's definitely some give and take here. Right? So let's be real, there is less revenue to be had in a relationship with Alliant than there's going to be with a large financial institution. And you're right, we're one of the 10 largest credit unions, but there are more than 100 banks who are bigger than us. And so as you think about the calling list, that's going to be a factor. On the other hand, I was in a meeting with the CEO of one of our key partners on Monday afternoon, dinner on Monday night.

Dennis Devine:
In the pre call I shared with you some other meetings that I've been in recently. I am personally involved in strategic partner meetings on a regular basis. What do you think is easier to get done, to get a decision at Alliant with an Alliant team and a focused, bold effort, or try to navigate through the waters of a large complex organization? Some are better than others, no mistake. But folks look at us, and we have many partners who work with the largest in the country or in the world, and nevertheless, they find us valuable as representative clients because, incredibly talented folks. Most of my team deep through the organization have years of experience, many with some of the largest institutions. And they want the opportunity to do innovative great work and make their partners successful.

Jim Marous:
So you took the role that you have today in the middle of last year, in the midst of a complete shut down of work as we knew it. But you also came at a time when your members were demanding digital solutions. That wasn't the only option they had, but they already were used to it. What was the first thing that you focused on when you started Alliant?

Dennis Devine:
Clarity and focus, it's just imperative that we not try to be everything to everyone. And so my team would tell you, my board I think would tell you, the alignment of the team around a common set of principles, and I shared, we're very unique. If you look outside in at our business, you're going to say ... If you Google best credit union, we're going to show up at the top of most lists because of what we give back to our members. I should share with you how distinctive that proposition is. But you're going to see some things you're going to wonder about too. The old CFO in me would say, "We have among the industry's highest cost of funds." Plenty of consultants call me and say, "Hey, we've got some ideas for you on how you can improve your margin." We have among the highest cost of funds and we are proud of it.

Dennis Devine:
We're organized around that to give as much back to our members, our incentive and performance measurement structures are actually organized around: How much can we give back in deposit rate? How much can we give back in credit card rebate? How long can our fee structures be to our members? How many other financial institutions do you hear say that? It's true, structurally true for us.

Dennis Devine:
The second is we have among the industry's worst fee income, and we're proud of it. It's a hot topic in the industry right now, but there's a lot of revenue being derived in the form of deposit service charges and other fees to customers, to members. It's never been part of who we are, it never will be. We'll be even more ambitious and disruptive I think on that front going forward. But the third is we have among the industry's best cost structure. When you're as focused as we are and you have a national digital franchise, you don't have the cost of branches, you don't have the cost of operations. You don't have the complexity of all these different business units objectively. Those pieces work so that we can offer remarkable value with focus. But if we try to dilute it and be everything to all, we can't be successful.

Jim Marous:
So I've written a lot of articles in The Financial Brand and done research for The Digital Banking Report on the importance of a digital culture, digital leadership, and employees who really embrace a role within the digital organization. What's the biggest difference you've seen between Alliant, and I'll say without pointing any fingers at any one institution, what I'll call the traditional banking organization? Is it those things, the culture, the leadership, and the way the employees view their role?

Dennis Devine:
Well, we have plenty of work to do. And some of the institutions I've worked with are just swimming with incredibly talented folks. But I'll share an example, we will grow members this year faster than the institution has in the last 85 years. And there's a few different things we're doing now. We have new talented leadership, incredibly engaged leaders across a lot of different parts of our organization, but we also have new partners. And so Suze Orman is a national influencer and awesome partner.

Dennis Devine:
We met her in October of this past year, and in early January, we were in market as not only sponsor of her podcast, but also with the unique offer into her membership that was available through all of our digital channels. And so the ability to engage, decide, and act, you can imagine our team over the holidays, Thanksgiving, the December holidays, a pandemic, and then what we call team Suze, to kind of make this happen. That's possible with a team that is empowered, engaged, and wants to make things happen. It would just be harder in a more complex organization to pull things like that off.

Dennis Devine:
But huge parts, Jim, of what we do is the same. We have agile teams designing with deep understanding of member needs, prioritizing against outcomes that we want to accomplish, and trying to bring those things to life. There's a lot of commonality to the model. Ours is uniquely member centric and with a clarity and simplicity that allows us to act.

Jim Marous:
So when you look at the whole environment of digital, one of the things we talk about a lot is that there's a big difference between saying you can do things digitally and being a digital organization, the difference between a 15 to 17 minute account opening process and one that is similar to let's say the Apple Card, where it takes all of four screens and a minimal amount of time. How do you prioritize digital experiences over just doing thing digitally?

Dennis Devine:
I'll give you two answers to that. One is our digital team and our member care team and our operations team are organized into one business unit at Alliant. That's an untraditional organization, and it's specifically to address this. When you said, "What are some of the things you learned from some of the bigger institutions?" It was the importance of that end to end journey. You can have the most beautiful user experience on your mobile device. And if that immediately defaults into a bad operations process or a series of calls into your contact center, you're not really digital at all. And so that would be the first.

Dennis Devine:
The second is use the power of analytics. I will tell you that when you're a member owned institution, you put all your analytic rigor into things that are member centered. What are these defects? Where are folks falling out? And then you empower agile product owners to make it their life's work to make these things better, not just: What does that user interface look like? But what does that end to end journey look like? Why are folks being locked out in the first place? Why would they call the member care center? Why can't they self correct that in the digital world? Why is that account opening not making its way on a straight through, immediately funded basis? Those are the kinds of things that you ... That end to end vision, interestingly, sometimes that's harder in a more complex organization because the digital team sits here, and the ops team sits there, and the contact center sits there. Our teams think about it with that line of sight.

Jim Marous:
Weil, it's interesting because at Alliant, your cost of funds, as you mentioned, is higher. But your cost of delivery is much lower, and that's just the nature of the beast in a digital organization. And you also talked about a 20% growth over the last year, which I would imagine a lot of that had to do with your cost structure and the ability to deliver a higher rate return. How do you then cross sell into a deeper relationship out of that initial product?

Dennis Devine:
As a member owned institution, we are all in and all out for our members. We believe that it's a myth that most have only one financial institution. Think about how many different financial institutions represent your wallet today between your card and your checking account and your mortgage and your investments. If it were only one or two, you would be an unusually good bad client. We think that folks have a broad, and we should earn into each aspect of that. And so we want to have compelling solutions holistically. That said, of course, we tend to be very successful attracting members with our high yield savings account because it's priced at or better than the leading direct banks in the country.

Dennis Devine:
And then once they experience the power of Alliant, they get the benefit of other solutions we have, a checking account that pays more interest than most banks pay on their savings accounts, a bigger free ATM network than the top two banks in the country combined, no minimum balance, no monthly maintenance fee, the best fee structure quantitatively in the market, a credit card that pays 2.5% cash back flat with no annual fee. And so we look to introduce compelling solutions to our members in the context of that in that relationship. But we don't define success, there's no measure of: How many products do we have with any given member? We don't want to be a single service member, but digital engagement, multi solution, that's kind of as much as we're looking for so that we can be as good for our members as we can be.

Jim Marous:
So would you consider Alliant toady, and this can be a tough one maybe too, a price or slash product first organization, or experience first organization? What do you think you're better at, acquiring through the pricing, or keeping and growing by the experience?

Dennis Devine:
Well, I'll answer your question, but then I'll say, "Of course, it's not one or the other." Value matters. If you and I were walking through the halls of Alliant right now, you would see the brand messaging on the wall that says, "First, we're savvy." We offer great rates, low fees, an intuitive digital experience, savvy people working for savvy people. So it could be that most of the folks listening to this podcast have not heard of Alliant because of the size of the institution that we are. But then they're going to take a peek, and they're going to look at the value that we offer, and they're going to say, "If given a rational choice between that value proposition and what I get for my average FI, why not?"

Dennis Devine:
But it can't stop there, or otherwise we would have constant churn on our book as soon as there was a single five basis point flip on any given thing. The second is, so the first is, we're savvy. The second is we're selfless, owned by our members, not shareholders, so we can go all in. And so that's not lip service. It really does. We're organized around decisions are framed that way, not around: How much money can we make this quarter? But how much can we give back? We measure how much we give back.

Dennis Devine:
And then the third is socially responsible. Our members care about it. Our people care about it. We have a unique opportunity we believe to help close the digital divide that exists in our country as a national digital financial institution. We believe that technology is not a privilege. It's an essential need that we play a role to help folks, and not just for banking, but for healthcare and for jobs and for education. And so it's more than just a price for sure, but it's a critical ingredient. As folks are shopping in a digital world, we better have awfully good value to offer.

Jim Marous:
My example I give is Amazon. Who would've thought that basically the whole nation would pay $120 a year for the right to shop in a more efficient digital way? And we do that. It's not because of the free shipping because we get that at any big box store. The reality is, it's the experience. It's the way they use data and analytics. And as you mentioned a couple questions ago, it's the value transfer. At the end of the day, consumers are willing to give up a lot for good value, and we see it daily. And so let's take a short break here and recognize this sponsor of this podcast, and then we'll get back to talking about some other things.

Jim Marous:
This episode of Banking Transformed is sponsored by FIS. The way we move money is changing. We want to send money in realtime to the other side of the world. We want everything in one place, integrated, seamless, and on our devices, embedded, fast, standardized and frictionless, as well as secure. These are our financial futures. The Financial Futures Podcast by FIS explores fintech innovation and the trends that are already transforming the way the world pays, banks, and invests across the globe, and the mechanisms we'll need to prosper in this new brave landscape. Is the world's technology up to the challenge? Are we? Are those around us? FIS, advancing the way the world pays, banks, and invests.

Jim Marous:
Welcome back to Banking Transformed. So I'm joined today by Dennis Devine, CEO of Alliant Credit Union, one of only a handful of legacy branch supported financial institutions that eliminated branches and became digital first. So Dennis, our research shows that the vast majority of financial institutions do not feel prepared to address the challenges of data analytics as it relates to personalization and recommendations of products to customers, and even into overall decision making. What is Alliant doing to use data and analytics to improve the overall customer experience?

Dennis Devine:
I will tell you that we talked about the value of partners. This is something that we are actively working with partners on as well. But the first is making sure that your data capabilities and your data infrastructure and your data tech is what it needs to be, and that is, this is probably one of the powers of a more nimble organization, focusing on specific outcomes that you want to accomplish. And so openly, in a shareholder driven organization, a lot of your data and analytics get into: How do you find more margin in some of the interactions that you're going to do? We're able to spend more time with a model that gives as much back to our members as we can on customer analytics in terms of what's driving call volumes, what's driving the IVR outcomes, what's driving the lack of first call resolution, and spending our time and energy on those efforts.

Dennis Devine:
My team has a standard cadence, but a member experience focus with the entire executive team, driven by the analytic capabilities that the team has drives a huge part of how we spend our time and what we look to accomplish. And then you're able to measure the outcomes you get on the other side of that.

Jim Marous:
So it really supports all your decision making. But I would imagine that you're still ... I mean, most financial institutions probably just still scratching the surface because legacy mentality is that most data and analytics is used to avoid risk and fraud. And now we're using it much more towards building the experience. And I would imagine that someplace like Alliant that has a product led solution, but you really want to be able to provide better services, it works into your model to say, "How can we better understand where are customers are in their financial journey and support them?" Correct?

Dennis Devine:
And I'm blessed to have a team that includes some of the best minds in the areas of risk and fraud. And some of the leading global and national banks are part of a team now as they bring that talent to the environment. But Jim, absolutely yes. How do you use the power of those insights? You tell the story better than anyone of when some other retailer knows you better than your bank does, that we haven't done what's possible, that the lack of a branch doesn't make you less personalized, it should make you more personalized because rather than relying upon the memory of an individual person, we now have the power of everything that we know about that individual.

Dennis Devine:
And as we think about the changes underway over the last decade in our industry, and I think where you'll see the most rapid amount of change going forward, it'll be about the use of the power of those insights to really make the experience differ. And the best retailers on the planet are quite good at that. I think many of us, certainly we at Alliant, are looking to catch up on a lot of those areas.

Jim Marous:
When you look at Alliant, you're really a digital organization. You're almost a disruptor or a challenger bank. Who do you consider to be your competition? Are you trying to keep up with the top five financial institutions, the fintech providers, big tech firms, or simply trying, I'm going to say simply trying to beat your local competition? But you don't really have a local competition. You have the nationwide. What are you looking at as far as who you compete against?

Dennis Devine:
The simple answer is yes, all of them. Right? So we have a very defined persona of a customer, of a member that we want to attract. And that person has relationships with a lot of the institutions that you just described. Now the strength of our model is a member who has a little bit further along in their journey in life, so that a high yield savings account, a home decision, a mortgage, or a refinance, a really high rebate rewards card, are going to be interesting. And as a result of that, everybody offers products like that. We think that for our model, it's not just about age and income, but behavior based. This is increasingly true for everyone, but there's definitely true for some, more comfortable with digital themselves, more willing to leave one of the major brands, and for those folks, we're just a remarkable option.

Dennis Devine:
Our savings rates are literally 10 X what's available at more institutions, the checking, the savings. We offer a ton. And so we're able to offer a disruptive digital experience that just provides much greater value and a member centered experience that is very unique. But honestly, there are many, many competitors, and I think we want to be humble about that. But it also creates a great deal of opportunity for us.

Jim Marous:
Who do you look at in the financial industry right now, probably being a challenger bank of some major, that you like the way their model works? You maybe have worked with, or talked to, or engaged with leadership. What new company out there do you really think they're kind of getting it from a digital perspective?

Dennis Devine:
The big national institutions have done great work over the last decade of kind of really moving the needle. And so we are deeply respectful of what they've accomplished. And we think for many of those customers, we have a lot more value to offer than they're getting from them right now. We think that it's been deeply impressive how many of the neo banks have grown remarkably, the Chime and the cohort, with simple, intuitive experiences that have allowed them to move. I mean, they have membership numbers or customer numbers now that are larger than institutions have been around for hundreds of years because they're so digitally centered.

Dennis Devine:
Most like us is probably going to be the cohort of Marcus, Ally, SoFi, larger institutions than us, but institutions that have compelling propositions, digitally led, and are a little broader relationships than some of those pure neo banks are going to have. So that's I guess a beginning view of how we would start to look at some of the markets. But as you know, things are fluid, and some of the largest tech players, Google, Apple-

Jim Marous:
Wal Mart.

Dennis Devine:
As you've demonstrated to me, right, it's a rapidly moving area. And it's important for us to always have our eyes on the horizon to see what's out there.

Jim Marous:
So how is Alliant trying to scale? I mean, as you said, while you've grown tremendously, you're still a small organization in the scope of things. What are your aspirations for Alliant in the next three to five years?

Dennis Devine:
Scale for us is all relative. If I told you we were going to double, triple, quadruple in size, we would still be a fraction of the size of the largest institutions. And so chasing scale for ... Bigger is not better for us, I guess to quote you from a little earlier in this conversation. Better is better. And so we're actually pretty clear about our hierarchy of objectives. The first is the quality of member experience. We measure it by traditional formats like net promoter score. As I mentioned, we actually measure it by: How much are we giving back? How much better are we than the alternatives that our members have? So that's first and foremost.

Dennis Devine:
If you ask me: What do I want our asset size to be? I will default to that question, quality of member experience. The second is social impact. I mentioned that's a core part of our proposition. We actually have core measures around it. And we're not a locally geographically based institution. Chicago makes up a little less than 15% of our membership, which means 85% is elsewhere, truly distributed across the country. But we measure the impact we're having on the lives of households around digital equity, employee volunteerism, and other important things we do, believing that a diverse, equitable, and inclusive society is just a better one for all of us. And our team is passionate about it.

Dennis Devine:
Then the third dimension we measure is the quantity of member impact. That's when we look at growth. And we think if we get those first two pieces right, we'll grow as fast as anyone does. And we won't stay a best kept secret under those circumstances. We really will start to get ... But that's not the primary objective as our structure affords us the opportunity to really zero in on member impact is the primary objective.

Jim Marous:
From throughout our whole discussion, it feels like you're saying that Alliant really believes that financial wellness, financial education, is a real important component of what you do because as you said, you don't have the geographical centrality to give back to the community in that way. And so really what you're trying to do is give back in the way that people manage their money. Is that true, pretty close?

Dennis Devine:
Yeah. Words matter a little bit, and so in the eyes of our members, their journey to financial independence is what they really want. And we're working to accomplish that with them. Social good will come from two dimensions. One is disrupting these traditional norms of banking that we think no longer serve folks, high cost distribution models, models based on inertia and occasional bad habits are not the way to work, and so we're changing those. And we hope that the more people pay attention to that, the more they shop. But then we will also do good by enhancing the digital equity. We have a number of significant partnerships that we've embarked upon. We have a foundation attached to our organization. Each of those areas are really important to us and the good we want to accomplish.

Jim Marous:
So finally, Dennis, what recommendation? You've been on both sides of the equation right now. So what recommendations would you give to financial institutions of all sizes that are in the midst of a digital transformation journey? Number one, where should they start? What should they focus on first? And secondly, what do you think will define the winners in the future?

Dennis Devine:
Focus and clear decisions. The hardest part, these are completely rational, amazingly talented organizations. The problem is, for the better part of a couple hundred years, they were organized different. And they have profit pools and shareholder demands, organized differently. And so the pivot isn't so easy because you end up making decisions that are very difficult to sustain in the near term. But focus and clear decision making, winners are going to be those that are adapting to change. You see it in the form of M and A right now. But I think even bigger than that, as an industry, we feel profit pools are changing dramatically. Sustained low interest rate environment is putting pressure on interest margin. Both competitive behavior as well as regulatory attention is putting pressure on non interest income. So this competitive influence is a huge factor. And you need to build to an end game in a horizon rather than staunchly trying to defend what has always been.

Dennis Devine:
We're all here trying to do the same thing, identify customers, in our case, members, what they need, and build to that. The best models we've talked about today are obsessed with doing that. And it's tough sometimes when you're in a financial institution. I can feel the best, you can spend a lot of time talking about governance and financials and a lot of things that are not centered around the customer experience. Even the digital teams can as they get caught up in racy charts and tech infrastructure. And those that are truly creating great value, so that customers, members, raise their hand and say, "That's a great experience," as you are proudly with your Amazon membership and your Apple Card, those are where the winners will lie. And I think the more time you can spend on that, the funner this job is and the more value you're creating for your customers and for our industry.

Jim Marous:
I would agree totally, Dennis. And it seems to be because rethinking what you grew up knowing, it wasn't until maybe eight years ago that people realized we didn't have to have signature cards. And I think in everybody's mind, we thought the government required it. And then we all realized that wasn't really what they required. It required something that was much more broad, and there was ways to do it now. I was talking with bankers in the last three weeks on a one to one basis in live events, which was really exciting not to see people all lined up in grids. But we talked about the difference between risk avoidance and risk management. Banks, and traditionally, were in a risk avoidance mode. Risk management is a completely different management tool, especially as you start using data analytics.

Jim Marous:
So it's re-envisioning everything that we've known in banking for what is a digital way of life. And you have so many more tools at your disposal, so I just want to thank you very much for being on the show. We've talked about it several times. You're local, so there's no excuse for me not having reached out personally and digitally. But I really appreciate you spending some time with us and talking about your journey. Your personal journey's been exciting, but certainly, the journey of Alliant from its beginning quite a while ago, to being where they are today has been quite exciting, I'm sure.

Dennis Devine:
Jim, always a pleasure to catch up. Thank you for the time today. I enjoyed the discussion. And I'm going to be listening to the Boss for the rest of the afternoon as a result, in the background. So thanks for a great [inaudible 00:35:47].

Jim Marous:
We're born to run. There we go. Thanks a lot, Dennis.

Dennis Devine:
[inaudible 00:35:47], but yeah, have a great day.

Jim Marous:
Yeah. You too. What a great interview with Dennis Devine. It's interesting because our careers kind of aligned in a strange way in that I went from a banking industry to work with savings and loans. He went from the banking, the traditional banking industry, to work for a credit union that was digital first. What an interesting perspective on what it takes to become digital and to keep that position, and also, this perspective on how they can offer a higher rate, or put differently, give back more to their members because of the fact they don't have the legacy cost structure that really makes it difficult for so many traditional financial institutions.

Jim Marous:
Thanks for listening to Banking Transformed, just rated as a top five banking podcast. If you enjoyed today's interview, please be sure to follow the show on your favorite podcast app. And please provide a review of our show. Also, be sure to catch my recent articles on the financial brand and check out our amazing research we are doing for the Digital Banking Report. This has been a production of Evergreen Podcasts. A special thank you to our producer, Leah Longbrake, audio engineer, Sean Rule-Hoffman, and video producer, Will Pritts. I'm your host, Jim Marous. Until next time, keep learning and keep moving forward.

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