How to Leverage Advanced Developer Tools to Drive Growth

Jim Marous (00:10):

Welcome to the FIsionaries Podcast sponsored by Alkami. I'm your host, Jim Marous. The FIsionaries Podcast shines a light on financial institutions at the cutting edge of digital transformation, providing you with the tools to elevate your digital game, no matter what size your organization.

Jim Marous (00:27):

On this episode of the FIsionaries Podcast, I'm at the Alkami Co:lab event in Grapevine, Texas. I'm joined by Chad Rogers and Jeramey Litzman from Connexus Credit Union. Chad and Jeramey will share how Connexus Credit Union has grown and innovated through the process of digital transformation.

Jim Marous (00:46):

They'll also show how they shifted the viewing of digital services from a cost center to a profit and growth center, setting a precedent that not many financial institutions have been able to reach.

Jim Marous (00:58):

In addition, we'll discuss the unique approaches to onboarding, channel strategy and acquisition that Connexus use to drive innovation and member centricity, positioning them as a trailblazer in the banking industry.

Jim Marous (01:12):

So, thank you both for being on today. We got a lot going on at the Co:lab Conference, and it's interesting because there are so many people that are in the same process of trying to get down this path to digital maturity.

Jim Marous (01:25):

And it's interesting because yesterday I interviewed a few people and they're at different stages of the process. And honestly, in the podcast itself, the FIsionaries Podcast, we meet so many organizations that are either starting or build pockets or well advanced.

Jim Marous (01:40):

And Connexus, I will say that in reviewing where you are with Alkami, you are at the leading edge of this transmission, but you never can keep up. I mean, we talked about before the podcast started, that one of the challenges is actually keeping up with the pace of change that is really taking root everywhere. I mean, it's interesting.

Jim Marous (02:01):

So, your $5.3 billion, Wisconsin based financial institution that has used APIs and software development kits to really personalize the experience for the consumer, but also personalize the delivery of what you're delivering to the consumer. So, there’s many ways that can go and we’re going to get into that.

Jim Marous (02:22):

But before we start, can you talk a little bit about your background, your journey in the financial services industry, and also both of you give that information. Then also talk a little bit about where Connexus is right now in the process.

Chad Rogers (02:36):

Absolutely. Well, first of all, Jeramey and I both want to thank you for giving us this opportunity.

Jim Marous (02:40):

This is my pleasure. Believe me. I appreciate it.

Chad Rogers (02:43):

Long time fans, first time caller right here. So, anyway, personally my background Jim, just celebrated my 11th year with Connexus Credit Union. Prior to that I was in the insurance industry for almost 20 years, but all of that has been in the marketing arena.

Chad Rogers (02:59):

And when I joined Connexus in 2013, one of the first things we did was take the digital banking element and bring it into the marketing department. Specifically, because we wanted to focus on the member experience. And there's the age old.

Chad Rogers (03:14):

I mean, I bet if I listen to your show more often over the years because I'm just a recent listener over the last couple years. But I'll tell you what, it's probably a tug and pull between should digital banking sit in the business technology, IT space, or should it be in the marketing space?

Jim Marous (03:28):

Or just standalone.

Chad Rogers (03:29):

Or standalone. It's kind of its own third world. But we made the decision to bring it in and then we made the decision to organize a complete member experience around that. And that's really the history. When I started 11 years ago, we were 75 employees, we're over 700 now. We were seven-

Jim Marous (03:50):

Sounds like Alkami. I'm sorry, but we're-

Chad Rogers (03:53):

We're on the same trajectory. We were 75,000 members, today we're 460,000 members, and we were 450 million in assets 11 years ago and today we're 5.3 billion. So, when we were talking before the podcast about scaling, that's one of the foremost challenges we have right now is not to be that kid that got to the school bus late and is chasing behind the bus, trying to get the driver's attention to get him to stop.

Chad Rogers (04:18):

We want to be there early. And with guys like Jeramey and his team and the rest of the organization, we're building that infrastructure to scale accordingly.

Jim Marous (04:26):

So, Jeramey, what's your background?

Jeramey Litzman (04:28):

So, I have a strong background in IT, starting at Credit Union, so probably a little over 10 years now. Been with a series of credit unions doing digital services, information technology. I've implemented all sorts of different platforms and services across the board. So, I'm at jack of all trades on the credit union technology front. So, that's me in a nutshell.

Jim Marous (04:45):

So, it's interesting your organization has been in the digital banking realm for longer than most, I'll just say. And one of the things we talked about before we started the recording was just the fact that it's an organizational push. It's really something that the whole organization's got to be pulling the same direction.

Jim Marous (05:09):

Because I think we all would agree that if leadership at the top does not totally buy into what's got to be done in the future, we're going to hit roadblocks and make it so that we maybe don't do it. You discussed before we got on air the fact that we have to stay out of the way.

Jim Marous (05:28):

And even at your organization, you're saying that's one of the challenges that you have, that we may want to do something, but then we get into our legacy mindset because it's a comfort zone. It's what we did well and have done well.

Jim Marous (05:39):

How do you as an organization try to keep that focus on moving towards change management, which is, I say it probably in every podcast, change sucks. So, it's not something people go, "Oh, boy, we just changed."

Chad Rogers (05:53):

Even when it's good.

Jim Marous (05:56):

Well, take healthcare. I mean, I'm an example. The doctor can tell me all I want to do, I know what I have to do. It doesn't mean I'm going to love doing it or we're going to keep on path. So, how do you do that at Connexus?

Chad Rogers (06:07):

So, two words, discipline, and intentionality. You got to plan your work and work your plan. So, 2020, we made a fundamental agreement as a senior leadership team that we were going to have a vision for the organization, a North star.

Jeramey Litzman (06:22):

And that vision was to be a nationally relevant, trusted credit union, providing exceptional experience and fostering prosperity to those that we serve. Those 18 words are-

Jim Marous (06:33):

It's got it down.

Chad Rogers (06:34):

Are the focus for almost every one of our 700 employees at Connexus. And where that ties into the digital banking world, is it gives us that discipline. You get what you inspect, not what you expect. So, we break that apart and we're like to be nationally relevant. We're based in Wisconsin, but less than 20% of our membership is domiciled in Wisconsin.

Chad Rogers (06:56):

So, out of our 460,000 members, they are on the west coast, east coast, here in the great state of Texas. We are all over the board. So, how do you make that member in Texas have the same experience that they have in Connecticut, especially when it comes to a digital banking experience.

Chad Rogers (07:15):

So, trusted, well, you partner with people like Alkami because you know that there is a reliability that comes with the platform. Exceptional experiences, we can get into that. Some of the other questions that are coming in. Fostering prosperity, that's simply putting the products and services that we can offer our members to help them out in front of them through the digital sales channel.

Chad Rogers (07:36):

And then to the members that we serve, that's both perspective customers because they're not members yet, and existing members.

Chad Rogers (07:44):

So, back to your question, the having that mantra front and center all the time allows us to constantly assess ourselves to say, "Hey, if we had to give ourselves a grade on each portion of that vision as it relates to how we're performing in the digital banking channel, how are we doing? And where do we need to push harder and more?"

Jim Marous (08:00):

You measure against your mission.

Chad Rogers (08:02):

Measure against your mission.

Jim Marous (08:03):

And I say it again. Courtney sat through it a lot of times. My team has sat through it a lot of times. If you don't know where you're going, it's going to be hard to know when you get there. And it's more than just saying, "I'm going north." It's worth specifically on going and I need GPS to be able to say, "Okay, where do I have to shift?"

Jim Marous (08:20):

So, Jeramey, you're on the technology side, but I think you know, as well as anybody that is not just about the technology. In fact, the technology must have taken a back seat to culture, to employ morale and what they have to be sticking up with and also being able to implement and deployment.

Jim Marous (08:40):

So, at Connexus, you have a large group of employees, you could be viewed as their demon that they think about that could replace their job. Because a lot of employees think that AI and digital tools could be their replacement.

Jim Marous (08:57):

How have you communicated to your teams, to your employees, to make them comfortable knowing that this is an enhancement upon which they grow as opposed to a threat?

Jeramey Litzman (09:07):

So, I work very closely with my team to make sure that they're working with those frontline members that potentially could be the ones that are calling us the demon and chasing us off because they think we're replacing the shop.

Jeramey Litzman (09:18):

So, we work super close with them, they know what we're doing. They know what's coming on the horizon, kind of along those lines with technology and being the demon, I see it more so with the ... we push too much technology too fast, and the membership is affecting, so that affects the frontline, that affects those other. So, then they're upset that we're moving things that are moving us forward in the space.

Jim Marous (09:39):

That's in their benefit.

Jeramey Litzman (09:40):

Yeah, to the benefit of the members but in a lot of their space, it's change. And so, it comes back to the change management again, we’re going to make sure we're keeping a pace that our members can accept, our frontline staff can accept, my back-office staff is up. We have to find that happy medium for all of those. So, it's tough.

Jim Marous (09:57):

So, in that same realm, we mentioned that your members are sometimes threatened by — even I know when I have a mobile banking app that changes, you go, "Oh my God, it looks different. Where's what I was doing?"

Jim Marous (10:09):

How do you from a technology and a deployment standpoint, try to build things that are not revolutionary but are evolutionary from the consumer's perspective?

Jeramey Litzman (10:20):

So, we're going to talk about a little more later. So, I have a saying, “no data, no action.” So, a lot of the changes that I'm making are strictly based off of data. So, I go and find data that affects the members. We apply that, we prioritize it within our roadmap when we can fit that in.

Jeramey Litzman (10:35):

And so, when we're making those changes, we're looking for what members would be least they want but are also least affected by. So, no major movement of buttons. We did one just recently. We updated some buttons, and we had some upset members, but the majority were using something else.

Jeramey Litzman (10:52):

And that replacement, our loan payment widget, that they wanted faster access to that, so we removed bill pay. Which bill pay from our shortcuts home row and replaced it with pay loans and we had NPS. The results so far, we just made this change.

Jeramey Litzman (11:06):

I've already seen everyone, like, "Thank you so much for bringing this in. I wanted that quicker access to it." But we did have some others that were, you bill pay from a home road, but you got to balance the greater good, I guess would be the way.

Chad Rogers (11:20):

And decisions rooted in fact tend to be better decisions. So, I love Jeramey's promise. And the other thing that we do is we leverage the people outside of his team. I mean, he has a phenomenally talented team. But we're fortunate enough to have an in-house continuous improvement team.

Chad Rogers (11:35):

We're fortunate enough to have an organizational change management discipline. We're fortunate enough to have a couple of just top-notch UX designers that specialize in human factors that are actually doing user testing where we're going out into the marketplace and paying people to go through an experience and just give us objective feedback.

Chad Rogers (11:56):

They don't know Connexus from anybody else. So, all of that goes into the soup and ultimately helps drive where we need to have our focus.

Jim Marous (12:04):

Well, also it helps, one thing that we've seen, especially in the last five years, is when you look at the ability to use composable solutions from outside partners that you trust, and they have partners that they have already vetted. It gives you some speed that you can do things faster, some comfort that it's not going to blow up.

Jim Marous (12:25):

Some case studies, in your case, it may be fewer because you're pretty well advanced in the process but you're still going to hear things out there and say, "Oh, by the way, do you know that this institution's done this," that you would never have known otherwise.

Jim Marous (12:37):

So, the leveraging both internal people and tools and external tools and people, it really gives for a $5.3 billion organization some really great momentum and ability to make adjustments that you may have taken much longer otherwise.

Jim Marous (12:55):

You mentioned the growth of Connexus and the expansion beyond Wisconsin. What has caused that? What has driven that from a corporate standpoint?

Chad Rogers (13:06):

Short answer. I have the emphasis in indirect lending. So, when you think about indirect, let's say you want to go buy a car down at Joe's auto shop on the corner. And Joe's not going to let you walk off that lot until you buy that car Jim.

Chad Rogers (13:20):

So, Joe's like, "Hey, I can give you financing for that." Well, at the end of the day, Joe probably doesn't know anything about financing. He's got somebody behind the scenes that's backing it. So, we bring that in and next thing you know, you bought the car.

Chad Rogers (13:32):

Two days later, you get a letter in the mail saying, "Hey, Jim, glad you have as a member of Connexus Credit Union." Like, "Hey, wait, wait, wait, I didn't join Connexus Credit Union." "Well, when you financed, you became a member of Connexus Credit Union."

Chad Rogers (13:45):

So, you know how you extrapolate that over many years over many relationships with lending partners, and next thing you know, you have a very geographically dispersed audience as well as demographics.

Jim Marous (13:56):

So, do you generate your deposits through those loan relationships?

Chad Rogers (14:00):

Not necessarily. We used to, but with the war on deposits lately, and that struggle to get money, we now have almost that indirect depositor relationship where we can afford to provide our members with some of the best yields in the country.

Chad Rogers (14:16):

So, people are finding Connexus Credit Union, because that's where they want us to safeguard their money is with us. So, once we get them in and we get them into digital banking, now we have first move advantage to do more presentment of other products and so on and so forth. So, that conversion just begins to be like this snowball going downhill.

Jim Marous (14:35):

So, Jeramey, the desire to get indirect loans, the desire to get other types of personal loans, the desire to get new deposit customers is all set up at the front door. And if you make it heavily friction, which most organizations still have, when we ask them the question at Digital Banking Report, does your organization offer digital account opening and digital loan application?

Jim Marous (15:00):

Again, about 80% say they do. When we later asked the question, how long does it take? We find that the duration of how long it takes is 15 minutes, which means that you're not really digitally account opening or digital loan applications, obviously from your growth, you're doing something different. Have you shortened your new account opening process and your digital loan process?

Jeramey Litzman (15:23):

Yeah. So, they're very short now. So, new account openings, five minutes loans, probably a little bit-

Chad Rogers (15:28):

I would say, I mean, it depends on the loan type. I mean, mortgages-

Jim Marous (15:34):

Five minutes, there you go. I mean, everybody who listens knows I talk about that all the time. That's the pressure point. But if you do that, you can generate 40 to 60% more than if you had that 15 minute, because people they abandoned their shopping cart as they'd say in the retail business.

Jim Marous (15:54):

So, how did you do that? Because sometimes we talked about bankers getting in their own way. We want that, but we won't let go of legacy back-office process to make that impossible. How did you do that?

Jeramey Litzman (16:08):

So, we went through a very large project doing a onboarding revamp and basically started from the ground up and redid all of our processes, workflows on the back end streamlined as much as we could to generate that.

Jeramey Litzman (16:21):

And we're seeing really good results off of it. The most recent iteration was just last year, and so we're pushing forward. Right now, the numbers look really good.

Chad Rogers (16:30):

Dramatic improvement. And another benefit that we have at Connexus is we have an in-house member experience team. And they do everything from voice of customer, voice of member to the complaints to everything. They manage it A to Z, but-

Jim Marous (16:46):

So, they always have the ear to the ground.

Chad Rogers (16:48):

And you know what, members vote with their feet or vote with their thumbs.

Jim Marous (16:53):

It's amazing how our satisfaction ratings are always higher than the reality because the people that hate us have left, we don't normally have those on board.

Chad Rogers (17:02):

No, no. I equate it to the, if you're driving down the highway and you see in the back of the semi, how's my driving call 1, 800? How many times are people calling that number saying, "Hey, I just wanted to call and let you know that was a fantastic lane change that you just made." You don't get that.

Chad Rogers (17:17):

So, we drive very heavy NPS through our partner Qualtrics. And we are doing point of sale surveys in all channels, digital banking, member call center, in branches, emails. We're doing relational surveys within digital banking back to the SDK.

Chad Rogers (17:35):

We can embed that in there without being intrusive, we can constantly keep a pulse on how people want the experience. And then of course, we're also looking at the 8,000 plus app 10 of reviews that we're getting on the app and triangulating all of that data to say, "Where are the pinch points for our members?"

Chad Rogers (17:52):

And Jeramey's team took all of that data, worked with our teams internally, and did a current state, desired state on what that new member onboarding should look like, and we totally retooled it last-

Jim Marous (18:03):

So, the brand-new account opening, where were you before you turned on the iteration that made the biggest difference? What was the before and after numbers roughly?

Chad Rogers (18:13):

20 basis points increase. Just in the short time that we've had it for certain.

Jim Marous (18:18):

When you have a great rate, either on the lending side or the deposit side but you make it hard to get it, people just say, "It's not worth it." At the end of the day, they start doing the math going, “It's only this much money a year. It's not worth it.” But when you give it to them, they're preaching, and they tend to open more things.

[Music Playing]

Jim Marous (18:40):

So, let's take a short break here and recognize the sponsor of this podcast.

Jim Marous (18:50):

Welcome back to the FIsionaries Podcast sponsored by Alkami Technologies. So, what have you done? You mentioned onboarding. What have you done from a technology back-office to enable onboarding and what does that look like organizationally?

Jeramey Litzman (19:04):

So, most of it's a lot of the workflows that were there. So, fully getting them onboarded, digital banking, most of them are there within the day. So, we're seeing people apply that morning and some of them are ending up in digital banking, either that next morning or even in some cases that evening.

Jeramey Litzman (19:20):

So, it was a lot of those workflows within our account servicing teams on board, getting them to where everything is just seamless with MeridianLink, getting quick apply set up within digital banking as well for future account openings.

Jeramey Litzman (19:34):

Because we have a lot of accounts that are being opened within digital banking for their additional savings or checking whatever they're doing there. So, we have some that are even faster. So, those are even under five minutes in those, that's a couple hours. They have like a new checking open or a new savings open.

Chad Rogers (19:50):

And it's a multi-prong approach what Jeramey's team is able to do, Jim. First of all, surround yourself with great people. That includes great partners. Alkami, El Caminos, Quick Apply helps us. I mean, you talked about that great-

Jim Marous (20:02):

That's one thing that you've been in the industry long enough to know that these organizations didn't always work together very well. Even if they weren't in the same field of business, they'd consider each other competitors, or they wouldn't take the time to learn each other.

Jim Marous (20:16):

We're blessed today that I don't know many partners out there that can't work with virtually everybody else in the field, even when sometimes they have to cringe. Because some have to work on the data side with somebody that they're going, "But we have that."

Jim Marous (20:30):

Heck, your core provider ends up saying, "We could have helped you out, we could have helped you out." And we all know that you can't be best at everything.

Chad Rogers (20:39):

And that's the beginning of the end for companies that continue to believe that. That would be like Apple saying, "We're only going to share in our app store apps that we develop."

Jim Marous (20:49):

Well, we could say we have a little bit of that with Apple, where they go, “We're going to green today.”

Chad Rogers (20:54):

You're right. We could take a hard ride into that discussion. But when you look at Alkami, I mean, they're not threatened. What they're basically saying is, "We are going to be the best platform provider in the space. We're going to make ourselves-

Jim Marous (21:05):

What you want.

Chad Rogers (21:06):

Uber extensible. We're going to offer client choice. You find the partner; we're going to let you snap that into our platform. And those are the companies that are going to win.

Chad Rogers (21:15):

So, we looked at Quick Apply. When you start looking at the data, it becomes this self-fulfilling prophecy. I mean, half of the loan applications we get at Connexus Credit Union come through our digital banking channel.

Chad Rogers (21:29):

A quarter of our deposit applications that we get come through our digital banking channel. We know that the people that are in our digital banking channel that apply, have the best credit scores of any other members in our credit union.

Chad Rogers (21:40):

We know that we have the highest conversion rate for applications that come in through that channel that ultimately, we end up funding. So, where are you going to double down on your efforts? Especially when you want to — at the beginning you talked about how we turn from a cost center to a revenue center.

Chad Rogers (21:57):

This is where our members choose to interact with us. So, make that the most beneficial experience for them and the most rewarding one for us.

Jim Marous (22:04):

Well, you also mentioned in kind of sideways that you measure everything. I mean, Jeramey's brought up in everything we've talked about. Because of that, you're able to justify your investments in technology and transformation because you're basing everything on what we're going to get out of that and you're proving it.

Jim Marous (22:23):

Because I know when we introduce — I go back a little bit further than probably either one of you but when you introduced ATMs, when you introduced online banking, we all said, "It's going to get rid of tellers. It's going to get rid of people." It never did. Everything has just simply been an add-on cost.

Jim Marous (22:40):

But now we don't have any luxury anymore. Plus, there's not many more add-on channels, we're just trying to make them better. But now you're able to say, "We want to do this and this because this is going to generate this, this, and this as far as revenue, as far as members, and as far as actually community experiences that are positive,” which we sometimes put that under the rug.

Jim Marous (23:01):

But the reality is, it's good to be that organization that people think positively of, be it in your traditional marketplace or in beyond. Because you lose that car dealer if you don't perform more on their behalf as well as ally and some other very prominent names out there in digital.

Chad Rogers (23:19):

They've got choices.

Jim Marous (23:20):

Exactly. And that loan officer can pick the one that's easiest to work with. Because bottom line is he has to sell that car now and it's not always about rate, it's about, I just got to make sure this thing doesn't fall apart because of the loan side of it.

Jim Marous (23:37):

So, what have been the challenge? I mean, as I said, you guys have Alkami assessment tool that has just been introduced is an amazing way to self-assess where you are in digital maturity. You're going to be doing it while you're here at the Co:lab.

Jim Marous (23:49):

They have a tool that basically can do it online, but nothing's ever as smooth as it looks or as good as it seems. What have been some challenges internally as you look at your digital transformation data?

Jeramey Litzman (24:04):

Data is the biggest challenge. I think still we leverage it a lot, but there's so much of it and getting it all in one place is still a problem. And it's one that I think everyone is going to be dealing with. I haven't run into data, anybody. It's like, "Oh, yeah, our data's awesome. It's all set. We're good." It's something that-

Jim Marous (24:19):

Well, that's also where you use partners because you don't need perfect data to do nine-tenths of what you're doing. At least get something utilized out there will perfect you over time in your measurement tools, that's how you perfect it. You were about to say something too.

Chad Rogers (24:34):

Well, I mean the challenges can be all over the board. War on talent is still hot. I mean, we are again, super fortunate to have the talent that we have on our team.

Jim Marous (24:44):

You're in a good location, honestly, too. You're in Madison.

Chad Rogers (24:48):

Well, we're just north of Madison and WASA. But here was the game changer for us Jim, when we came out of the pandemic, we made a conscious decision to be a remote first organization. So, when I mentioned we have members all over the country, we now have employees all over the country.

Chad Rogers (25:05):

Now that has pros and cons because in his world, he's now competing with the same talent that would normally work for a Google or a Microsoft.

Jim Marous (25:13):

They don't have to be in New York City. They don't have to be in San Francisco.

Chad Rogers (25:17):

Cost of living can be lower for them. Cost of employment could be a little bit higher for us. But at the end of the day, we now have an opportunity to work with some of the most remarkable talent from anywhere in the country.

Chad Rogers (25:30):

But the talent is still an issue and then at the end of the day, it's still a business. You're still in that capacity pie with fixed time, money, and resources.

Chad Rogers (25:40):

So, our eyes are always bigger than our stomachs in this space. When you come to a Co:lab convention like this and you see the Innovation lab and all the people are there, it's just like, "I'll take one of those, two of those, I'd like three of those."

Jim Marous (25:52):

But you already know they must work pretty well with Alkami.

Chad Rogers (25:54):

They've been vetted.

Jim Marous (25:56):

So, I get rid of that part of it. And then you always are looking outside because there's all these organizations that pick other partners, whatever else. But the reality is you want to find out how do I stay ahead of the curve?

Jim Marous (26:09):

So, in the realm of staying ahead of the curve, we don't have any conversations with anybody with these kind of events about at some point getting into gen AI and ChatGPT.

Jim Marous (26:17):

You're at the front edge of this and you've talked about data and analytics, which basically what ChatGPT and generative AI, really that's how you deploy it. What do you see or what's maybe on your agenda in the relatively near-term and in the more extended term, what do you think's going to happen?

Jim Marous (26:37):

Because obviously it's going to affect those firms that are further ahead of the curve way before it's going to affect those that are playing catch up.

Jeramey Litzman (26:44):

So, I think that right now, what everyone should be aiming for is security and fraud, AI's there, it's stronger.

Jim Marous (26:51):

Where it started, where it started financially.

Jeramey Litzman (26:53):

Everybody should be leveraging AI in that realm. The other ones would be data in general. Finding ways to leverage that data. It takes a lot of human brains to do what a AI platform algorithm can do for us. Those are two safe areas too, because those don't really invade on that, "It's going to replace us, it's going to replace us."

Jeramey Litzman (27:12):

Maybe some of your data people, but you still have to have people to parse that data out. So, those are my two big areas and where I'm looking at AI, there is more chatbots.

Jim Marous (27:21):

There's a lot of nice to haves that are going to become must haves. But right now, fraud and security is no doubt a must have. And you can't ever put that as a second priority. That's what trust and everything else is built on.

Chad Rogers (27:33):

It's the first right answer. It warms my heart every time he says, because what people don't know about Jeramey's not only is he uber smart and understanding the landscape of the digital banking space and all that could come out of it, buthe's a specialist in the fraud area. So, I brag about our trend lines in terms of-

Jim Marous (27:50):

That's a prevention of fraud, obviously not doing it.

Chad Rogers (27:52):

Thank you. You always forget that first part of the phrase. But you had mentioned, should people feel threatened about their jobs with AI and our first order of business, number one, is to have a clear policy as an organization for how we'll utilize AI. Because without that risk control in place, it could be the wild west. I mean, everybody could be out on ChatGPT.

Jim Marous (28:13):

It makes it easier for them to communicate to members and their friends, community people. This is our policy because they're being asked that question already.

Chad Rogers (28:21):

And they should. As a conscious consumer-

Jim Marous (28:23):

We're asking ourselves that daily.

Chad Rogers (28:24):

The second thing I would mention to your comment about feeling threatened is we don't see AI as replacing people in our organization. We see AI as helping us not necessarily have to hire more people. And there's a big difference.

Chad Rogers (28:39):

Because when you're looking at income, you're either driving revenue or you're controlling expense. And we can work both sides of the equation with AI. We have products where we can drive the revenue, but we also control the expense.

Chad Rogers (28:52):

A perfect example on AI is we partner with another top-notch company called Illuma, which is voice biometric authentication. And we hired Illuma because when I started with Connexus like I said 11 years ago, I had the responsibility for our call center, all eight of our consultants.

Chad Rogers (29:09):

Today, we're over a hundred. And that trajectory becomes proportion. How many more bodies are you going to get into your call center with-

Jim Marous (29:16):

And what are we spending their time on?

Chad Rogers (29:17):

Exactly. And it goes back to things I've heard on your podcast. Okay, you call into Connexus because you have something you need help with. But we spend the first minute and 20 seconds, two minutes trying to figure out are you who you say you are.

Chad Rogers (29:33):

So, this AI voice biometric authentication over time, learns your voice and can identify you quickly, which shaves off 70 to 80 seconds on that authentication and allows us to get to your question earlier. Just one example of where we're leveraging AI. We we're partnering with another company called Posh, which Jeramey's a huge fan of, and I know you're familiar with Karan and his team, Knowledge Assist.

Chad Rogers (29:58):

Instead of a consultant getting a question from a member they don't know the answer to, and feverishly typing it into a chat which is resourced by people in the background. Now, we can get those scripts into AI, and we can bring back answers to common questions for our own-

Jim Marous (30:13):

And it's the beginning of the collection of data as well. So, we talk about the ChatGPT and the generative AI. The reality is we look at Bank of America over the years, some of these last seven years ago when they introduced Erica, and now we're all envious of the fact that look at all the data and interactions they collect over that time. That's going to help in the generative AI stage, they’ve already built that.

Jim Marous (30:34):

But it's interesting, you looked at, you're using widgets, you're using all kinds of development tools, things like this that really on the wish list of many financial institutions, when you look Jeramey, at a success story, what are one or two success stories you go, "This combination of the platform and the tools made so I was able to do something that was really kind of cool."

Jeramey Litzman (30:59):

So, my favorite Connexus is we leveraged the SDK to build a all inclusive loan payment widget. So, it has all of our payments available in one location versus maybe some of those buried here or buried in other menus, they're all right there at the click.

Jeramey Litzman (31:15):

So, it presents members with all their options for payments. The fee, if there's a price for it, timing, everything right there inside of a one singular screen, rather than having to go potentially to-

Jim Marous (31:27):

And that's interesting. That's a front of screen development that makes deployment beautiful. But it took the back-office refinement to make that work. It's interesting because we can come up with great ideas, but unless we can deploy them effectively, it becomes noise.

Jim Marous (31:45):

And we tend to try to show digital with having old back-office that doesn't work very well. It appears that you really focus on making sure the back-office can support what you're providing at the front of screen.

Jeramey Litzman (31:59):

And part of that was also like partnering with Alacriti. So, as part of that integration to another great partner. And so, being on board with them allowed that to be a cohesive option because it wasn't before.

Jeramey Litzman (32:12):

So, the back-office processes combined with alacrity, all that came together and allowed us to do that. Yes, most of the stuff we're doing on the front end has a significant back-office effect.

Jim Marous (32:22):

Which again is people in process and everything, but you're making your back-office digital. So, it comes to support the front office digital, which we talk about it, but not many organizations have made that move. Have you replaced your court?

Chad Rogers (32:35):

Well, your question is very timely. We are in the evaluation process right now with plans to do that over the next 18 months. So, we are right on the cusp.

Jim Marous (32:43):

To start in the next 18 months or to get it completed the next 18 months?

Chad Rogers (32:47):

Well, that's a great question. We'll probably start the actual RFP process this fall. We'll identify our new provider or maybe incumbent beginning of next year and then the 18-month clock ticks.

Jim Marous (33:00):

It's kind of interesting because we interviewed somebody yesterday who did both core and their digital platform 18 months, which was insane. And they said we would've done our core first, but sometimes that's not the way things go budget wise, timing wise and everything else.

Jim Marous (33:14):

But we're seeing fast implementation now compared to 7, 8, 9 years. And even some of the big banks have used it to replace their core, even if it's a composable core solution where you're saying, I'm going to replace certain things at once.

Jim Marous (33:27):

First question I asked you, you referenced marketing, and we haven't touched upon that, and that's my background. How has what you've done recently in digital banking changed the way you market services, the way you deploy solutions?

Chad Rogers (33:40):

Well, so we talked about, hey, which side of the fence should digital banking be in? More on that member facing member experience marketing or business technology or like you said, maybe it's a middle ground, maybe it's Switzerland where it sits.

Chad Rogers (33:58):

I don't think there's a right or wrong answer there. I will say that we're very fortunate that we have a strong senior leadership team that understands kind of the accountabilities in each area. So, our role Jim, on the marketing side is we control the front-end member experience.

Chad Rogers (34:16):

We have excellent front end web designers, but when it comes time to tapping into our core, maybe dealing with PII, maybe we have to use Apex to get underneath the hood on our core, that's all handled by our digital banking or by our business technology team.

Chad Rogers (34:30):

So, we have separation of church and state, which our regulators also like. Because now you've got additional controls in place. But it took us a while to get to that. That said, now that we have control on the front end of that presentment is focused for us.

Chad Rogers (34:47):

So, we were talking yesterday, we get 31,000 logins a day on our digital banking platform. Now, can you imagine if you had 31,000 people walking into your brick and mortar branch every day, how many opportunities you'd have?

Chad Rogers (35:01):

Well, those are the same opportunities we have with everybody across the country now. So, presentment is focused for us. Are we putting the right product in front of the right member at the right time? And that gets back to data.

Jeramey Litzman (35:15):

I'll jump in real quick.

Jim Marous (35:17):

And analytics back to X model.

Jeramey Litzman (35:20):

So, we're utilizing Alkami's user list API to take our data from the outside and create target marketing lists within digital banking. So, very specific on product. So, we're doing that analysis, we're doing that data, producing those lists, and we've actually automated it.

Jeramey Litzman (35:34):

We have brought on a new developer and that was his first big job. And so, he's automated the user list API to produce these marketing lists that are highly tailored beyond what we had previously.

Chad Rogers (35:46):

So, think of it this way, you log into your digital banking as a Connexus member, but the moment you log in, we know you've logged in. And we also know that Jim already has an auto loan with us because we financed his truck.

Chad Rogers (35:58):

We don't need to present an auto loan opportunity to you. What we might want to present to you is a rec loan opportunity, because there's probably a boat or a snowmobile or something else you might want to be pulling behind that truck.

Jim Marous (36:09):

And you have the data now to support that. And you're getting further and further along the line. Gentlemen, it's been a blast. It's a lot of fun. I'm going to continue this conversation probably elsewhere on the floor with you two, but I want to thank you for joining me today. It's been a great conversation, thank you.

Chad Rogers (36:25):

Jim, thank you.

Jim Marous (36:26):

Thank you. Thank you very much.

Chad Rogers (36:27):

Jeramey, always a pleasure, my friend. Alright.

Jim Marous (36:29):

Thanks for listening to the FIsionaries Podcast. We hope you enjoyed our deep dive into tips and tricks you can use to elevate your digital game.

Jim Marous (36:37):

If you enjoyed this episode, please share with others within your organization and with your vendors and your clients and other organizations to let them know how they can learn more about how to play the big game even for a small organization. This has been a production of Evergreen Podcasts. A special thank you to our senior producer Leah Haslage and our audio and video engineer Will Pritts.

Hide Transcript