CREDIT UNIONS REVEALEDRESULTS OF THE 2019 INDUSTRY SURVEY
Analytics Breakout Digital Transformation
AXFI Conference | June 9ndash12 2019 AXFI19
Results from the BIG | OnApproach Semi-Annual Digital Survey
Spring 2019
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consulting in partnership with OnApproach
is excited to present our third in a series of
national credit union surveys The Digital
Transformation Survey delves into how credit
unions are using digital and data strategies to
serve their members and run their businesses
This survey asked a national audience of credit
union leaders how far their institutions have
evolved in their digital transformation
Is The Digital
Transformation
Revolution
Leaving Credit
Unions Behind
AXFI Conference | June 9ndash12 2019 AXFI19
Top Line Results ndash Two Themes
bull Credit unions see that there is a revolution coming and are fully aware that
digital powered by data is changing everything they do
bull Credit unions may not be prepared for the digital war They realize they are
behind vis-agrave-vis the big banks FinTechs and BigTechs and are investing to catch
up
The degree to which credit unions see digital as an all-encompassing corporate
revolution rather than a channel strategy will determine their degree of success
in the transition from the retail banking model and ultimately in their ability to
survive
AXFI Conference | June 9ndash12 2019 AXFI19
Survey Results
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Seventy-nine percent of banks are moving Fifty-one percent of banks have
implemented a digital transformation strategy and another 28 are in the
process of doing so
bull FinTechs base their entire business model on digital The competition sees the
future and is attacking it
bull Gartner recently reported that 80 of financial intuitions will be out of business
in 11 short years if they do not embrace the digital revolution now
bull Digital takes time Digital requires new strategy culture skill sets
organizational structure channel integration (OMNI) and technology
architecture where data drives everything and all systems are interconnected
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Results from the BIG | OnApproach Semi-Annual Digital Survey
Spring 2019
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consulting in partnership with OnApproach
is excited to present our third in a series of
national credit union surveys The Digital
Transformation Survey delves into how credit
unions are using digital and data strategies to
serve their members and run their businesses
This survey asked a national audience of credit
union leaders how far their institutions have
evolved in their digital transformation
Is The Digital
Transformation
Revolution
Leaving Credit
Unions Behind
AXFI Conference | June 9ndash12 2019 AXFI19
Top Line Results ndash Two Themes
bull Credit unions see that there is a revolution coming and are fully aware that
digital powered by data is changing everything they do
bull Credit unions may not be prepared for the digital war They realize they are
behind vis-agrave-vis the big banks FinTechs and BigTechs and are investing to catch
up
The degree to which credit unions see digital as an all-encompassing corporate
revolution rather than a channel strategy will determine their degree of success
in the transition from the retail banking model and ultimately in their ability to
survive
AXFI Conference | June 9ndash12 2019 AXFI19
Survey Results
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Seventy-nine percent of banks are moving Fifty-one percent of banks have
implemented a digital transformation strategy and another 28 are in the
process of doing so
bull FinTechs base their entire business model on digital The competition sees the
future and is attacking it
bull Gartner recently reported that 80 of financial intuitions will be out of business
in 11 short years if they do not embrace the digital revolution now
bull Digital takes time Digital requires new strategy culture skill sets
organizational structure channel integration (OMNI) and technology
architecture where data drives everything and all systems are interconnected
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consulting in partnership with OnApproach
is excited to present our third in a series of
national credit union surveys The Digital
Transformation Survey delves into how credit
unions are using digital and data strategies to
serve their members and run their businesses
This survey asked a national audience of credit
union leaders how far their institutions have
evolved in their digital transformation
Is The Digital
Transformation
Revolution
Leaving Credit
Unions Behind
AXFI Conference | June 9ndash12 2019 AXFI19
Top Line Results ndash Two Themes
bull Credit unions see that there is a revolution coming and are fully aware that
digital powered by data is changing everything they do
bull Credit unions may not be prepared for the digital war They realize they are
behind vis-agrave-vis the big banks FinTechs and BigTechs and are investing to catch
up
The degree to which credit unions see digital as an all-encompassing corporate
revolution rather than a channel strategy will determine their degree of success
in the transition from the retail banking model and ultimately in their ability to
survive
AXFI Conference | June 9ndash12 2019 AXFI19
Survey Results
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Seventy-nine percent of banks are moving Fifty-one percent of banks have
implemented a digital transformation strategy and another 28 are in the
process of doing so
bull FinTechs base their entire business model on digital The competition sees the
future and is attacking it
bull Gartner recently reported that 80 of financial intuitions will be out of business
in 11 short years if they do not embrace the digital revolution now
bull Digital takes time Digital requires new strategy culture skill sets
organizational structure channel integration (OMNI) and technology
architecture where data drives everything and all systems are interconnected
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Top Line Results ndash Two Themes
bull Credit unions see that there is a revolution coming and are fully aware that
digital powered by data is changing everything they do
bull Credit unions may not be prepared for the digital war They realize they are
behind vis-agrave-vis the big banks FinTechs and BigTechs and are investing to catch
up
The degree to which credit unions see digital as an all-encompassing corporate
revolution rather than a channel strategy will determine their degree of success
in the transition from the retail banking model and ultimately in their ability to
survive
AXFI Conference | June 9ndash12 2019 AXFI19
Survey Results
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Seventy-nine percent of banks are moving Fifty-one percent of banks have
implemented a digital transformation strategy and another 28 are in the
process of doing so
bull FinTechs base their entire business model on digital The competition sees the
future and is attacking it
bull Gartner recently reported that 80 of financial intuitions will be out of business
in 11 short years if they do not embrace the digital revolution now
bull Digital takes time Digital requires new strategy culture skill sets
organizational structure channel integration (OMNI) and technology
architecture where data drives everything and all systems are interconnected
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Survey Results
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Seventy-nine percent of banks are moving Fifty-one percent of banks have
implemented a digital transformation strategy and another 28 are in the
process of doing so
bull FinTechs base their entire business model on digital The competition sees the
future and is attacking it
bull Gartner recently reported that 80 of financial intuitions will be out of business
in 11 short years if they do not embrace the digital revolution now
bull Digital takes time Digital requires new strategy culture skill sets
organizational structure channel integration (OMNI) and technology
architecture where data drives everything and all systems are interconnected
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Seventy-nine percent of banks are moving Fifty-one percent of banks have
implemented a digital transformation strategy and another 28 are in the
process of doing so
bull FinTechs base their entire business model on digital The competition sees the
future and is attacking it
bull Gartner recently reported that 80 of financial intuitions will be out of business
in 11 short years if they do not embrace the digital revolution now
bull Digital takes time Digital requires new strategy culture skill sets
organizational structure channel integration (OMNI) and technology
architecture where data drives everything and all systems are interconnected
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Seventy-nine percent of banks are moving Fifty-one percent of banks have
implemented a digital transformation strategy and another 28 are in the
process of doing so
bull FinTechs base their entire business model on digital The competition sees the
future and is attacking it
bull Gartner recently reported that 80 of financial intuitions will be out of business
in 11 short years if they do not embrace the digital revolution now
bull Digital takes time Digital requires new strategy culture skill sets
organizational structure channel integration (OMNI) and technology
architecture where data drives everything and all systems are interconnected
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Seventy-nine percent of banks are moving Fifty-one percent of banks have
implemented a digital transformation strategy and another 28 are in the
process of doing so
bull FinTechs base their entire business model on digital The competition sees the
future and is attacking it
bull Gartner recently reported that 80 of financial intuitions will be out of business
in 11 short years if they do not embrace the digital revolution now
bull Digital takes time Digital requires new strategy culture skill sets
organizational structure channel integration (OMNI) and technology
architecture where data drives everything and all systems are interconnected
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Credit unions are now keenly aware that the digital revolution is dramatically
changing every retail business model including financial services
bull Eighty-one percent of credit unions see themselves as one or more years behind
their competition and 45 see themselves behind two or more years
bull Let that sink in In a world that invests more each day in digital services and
where banks are investing billions in new digital and data technologies almost
half of credit unions see themselves as being two or more years behind
bull A call to action Credit unions can not afford to lose their service advantage to
banks by being less effective in digital service then their competitors
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull To demonstrate how far credit unions need to evolve realize that today only
23 of credit unions are processing more than 60 of their business through
digital channels
bull Compare that to 100 of the transactions at direct banks neobanks or at
FinTechs (payments lending and savings competitors)
bull Fifty percent of credit unions believe that 60 or more of their transactions will
be processed digitally in two years
bull The question is whether credit unions are creating a strategy based on a digital
vision and an integrated roadmap that identifies digital data culture and
information technology architecture or are they buying desperate digital
products hoping to keep up
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
The Digital Revolution
bull Strategic awareness of an extraordinary shift in the market occurs in two steps
First understanding something is happening (awareness) and then
acknowledging that the threat is large enough that you have to change (action)
your strategy and business model to thrive if not survive
bull BIG thinks that credit unions are aware and are beginning to take action but not
at the rate they need to
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Strategy
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull One-hundred percent of the retail world is going digital (a minor and
unsubstantiated statistic from BIG ndash but hey can you really dispute it) and yet
only 50 of credit unions have a written and documented digital strategy
bull Compare this to the Financial Brand findings that 79 of banks are executing on
a digital strategy and that 76 of millennials prefer mobile services over other
channels and you see why half of the industry planning for a digital future is not
nearly enough
bull A revolution of this magnitude requires a strategy to align service operations
and technology and to identify and manage the level of change that a paradigm
shift requires
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull The digital revolution is also an unprecedented opportunity for credit unions to
grow and compete
bull Interestingly almost two-thirds of the surveyed credit unions have a digital
roadmap and only 50 have a strategy That suggests that 20 of the of credit
unions have roadmaps but may not know what direction they want to head on
the digital highway
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull A few key questions can help you determine if your credit union has a strategy
or simply a project roadmap
ndash When making a decision about investing in a branch or investing in digital do both get
equal consideration
ndash When looking at lending do you see it as a digital platform for end-to-end digital
interactions or as better way for members to apply for a loan
ndash Finally when opening an account does compliance win the day requiring manual
intervention or worse yet branch visits or does frictionless service defeat the old
school thinking
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Strategy drives performance whether it is digital performance or any other
retail model
bull Alignment creates execution and winning performance If you are truly
committed to winning in the digital world you will find ways to answer the
questions above in a way that wins the millennial consumer and ultimately the
entire memberships business
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Strategy
bull Fifty-three percent of credit unions have an integrated digital and data roadmap This is a very positive finding
bull BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap
bull Each credit union is different in who they service how they serve and ultimately how they win
bull If digital is the channel that will drive 60 of the business then figuring out how you will create a winning digital MVP (member value proposition and strategy) will define the ultimate winners
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Services
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19Source Information to Insights PACE Findings 2019
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
Boomers ndash By The
Numbers
bull Forty percent work with a personal financial advisor
bull Fourteen percent have been victims of financial fraud in the last 12 months a higher number than the other age groups
bull Only 1 in 4 use non-bank financial services
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
Senior Millennials
ndash By The Numbers
bull Eighteen percent have switched from using cash to mobile payments
bull Sixty-nine percent are concerned with investing for the future and retirement planning
bull Twenty-one percent have a financial advisor This is more than twice the number of younger millennials
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
New Digital Services
bull The good news from Question 9 is that credit unions are stepping up their
investments in new digital services with 52 of them investing $250k or more
and one-third investing $500k or more this year
bull BIG believes this demonstrates that credit unions are serious about their digital
investments
bull Credit unions are finding ways to put more of their budget into growing the
channel and that demonstrates awareness and action
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Surprisingly 83 of credit unions indicate that they are offering digital
consumer lending and 55 respond that are offering digital mortgages
bull However two-thirds of credit unions are NOT using data and machine learning
the lifeblood of digital to create the biggest impact on the balance sheet and
for the consumer ndash automated loan decisioning
bull Thatrsquos right Seventy percent of loans are manually decisioned at credit unions
Seven out of 10 credit card loans auto loans and personal loans are manually
decided
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Existing Digital Services
bull Credit unions are trying to live in two worlds
bull The old-world manual loan decisioning has become more and more suspect
with membership expansion beyond original sponsors while the new world
provides a true digital member experience
bull Trying to live in both worlds will not work as credit unions move forward The
win in everything digital is a fast easy and thorough data-driven process not
just a slick user interface with a lot of questions and a multi-hour or multi-day
decisioning process
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Lending
bull Sixty percent of credit unions do not have a digital lending strategy and it
shows as only 30 of the loans are processed digitally in two-thirds of credit
unions
bull That is an incredible statistic given less then 33 of millennials go into a branch
or use a call center according to the Financial Brand
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
Overall Satisfaction Among Mobile and Online Direct Banks
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Credit Unions Have Not Created End-to-end Digital Services
bull A vast majority (90) of digitally initiated transactions require manual input The
holy grail is 100 digital
bull Anything less is likely a failure in most millennialrsquos minds
bull The difference in satisfaction rates is shocking Consumers are 63 satisfied
with the fully-functional digital services offered at direct and neobanks
bull According to the Financial Brand only 57 of credit union members are fully
satisfied with their service Credit union service strength is being usurped by
startups Digital is winning
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Banks are moving toward the direct model to significantly cut their costs
Banks are leveraging their scale as well as their digital and data strengths
to cut costs while delivering better service Credit unions have always
been able to win by offering a better price (lower costs of operations)
and superior service Banks are stealing our fundamental strength with
the use of digital and data strategies and tools
Coupled with advanced verification systems the use of data-enriched
machine learning decisioning engines next best product offerings and
member identified communications (SMS etc) banks and FinTechs have
created aggressive strategies and invested in better technologies that
result in better services and more loans
A Battle Credit
Unions Cannot
Afford To Lose
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Digital Is Strategy and Cultural Change
bull The results of Question 11 provide some very good news for credit unions
They are evolving their digital channels more quickly than in the past with 92
adding functionality in the last 12 months
bull This suggests vivid awareness that digital requires constant learning systematic
change and revolutionary ideas in order to remain competitive
bull That is why digital is both strategic and cultural It is not about automating old
processes it is about redesigning processes around digital mobile and data
The change required affects all departments
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
A Key Question
Is Your Credit
Union Achieving
This Level Of
Digital
Engagement
Setting aggressive KPIs is essential to understanding
how credit unions are evolving their digital strategies
to meet their membersrsquo needs Itrsquos worth noting that
credit unions are effectively measuring digital success
around activity service profit and products used
bull87 of consumers starting at digital
bull90 completing the transactions (not abandoning or changing
channels)
bull95 using digital resulting in doubling net promoter score
improvements (Financial Brand)
Banks and FinTechs are now looking at KPIs in
fundamentally different ways than credit unions
There are new benchmarks
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
A Clear Indication That Credit Unions Are Changing
bull Fifty percent of credit unions have replaced their digital or mobile banking platforms
in the last three years
bull That is a clear indication that digital banking is shifting from online to mobile and
that the old user interfaces do not hold up to the competition
bull Most of the systems being purchased are platforms for digital engagement not
stand-alone online banking platforms
bull BIGrsquos field observations suggest that credit unions are trying to connect the dots or
in this case systems into a mobile-first platform that crosses all products and
channels and which uses data to ask fewer questions verify more information and
make more decisions
bull There is that theme again digital powered by data across all channels is the
strategy that wins the revolution
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
Survey
Observations
Credit unions are aware that a revolution is upon them and yet 50 of the industry is still solving the problems in piecemeal fashion versus the necessary holistic strategy
that ultimately will win the battle and retain banking consumersrsquo dollar
bull The greatest challenges to credit unions based
on the surveys
ndash Credit unions have woken up to the challenges of
the digital revolution
ndash Credit unions are well behind the competition in
digital services but are building strategies
roadmaps making investments and enhancing
their technologies
ndash Digital enhanced lending should be a higher
priority for credit unions
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
BIG Consultingrsquos
Digital Retail
Hypothesis
The Fourth Industrial Revolution is upon us
Digital service providers dominate the retail model
Everything in banking has changed or is changing
Comprehensive digital strategies are necessary and
fueled by data and analytics
Strategy and culture must change to in order to
compete
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
AXFI Conference | June 9ndash12 2019 AXFI19
The Revolution
Is Real and the
Battle is Upon
Us
Digital powered by data is the dominant service channel now and going forward
Digital investments by all sizes and types of credit unions are growing
Competitors are prioritizing digital and data and using it to enter new markets and segments and
to enhance selling
Data is the secret sauce that leads to better business intelligence and frictionless digital member
service
Frictionless interactions powered by data (fewer questions faster responses lowered risk of
decisions automated compliance process automation) is the priority for credit unionsrsquo
competitors
Big banks and big tech are winning the hearts and minds of younger segments because they use
data more effectively (enhancing service) and build better mobile and online experiences (across all
products)
The growth of online (direct) banks is real and now sustainable
Payments have shifted from bill payment and checks to debit peer-to-peer and direct pay online
with debit and credit
The disruption in retail banking is a once-in-a-lifetime opportunity for credit unions to win market
share
Without integrating strategy member value digital and data credit unions will fail to take
advantage of the historic shift in the banking model
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom
Kirk Kordeleski
Sr Managing Partner and Chief Strategy
Officer at BIG Consulting (Best Innovation
Group)
Kirk Kordeleski leads BIGrsquos Management
Consulting practice that was founded with
the objective of offering clients innovative
solutions for strategic growth and data and
digital transformation
BIG Consulting offers comprehensive
analysis of credit union digital and data
resources operations financial
performance shared services and
technology
Contact Kirk at kirkbig-cucom or
call 516-528-5057
wwwbig-fintechcom