FSI Member Spotlight Episode #11: Carpe Diem for Credit Unions 

In a recent FSI Member Spotlight, Praxent Senior Director of Innovation, Lance Vaughn, sat down with author and fintech board advisor Mark Sievewright.  Mark brings a wealth of experience to the table, having served as President of Credit Union Solutions at Fiserv for over twelve years before founding Sievewright & Associates, which focuses on providing strategic support to credit unions.

Mark began his professional journey as a banker with HSBC over three decades ago, and fondly recounts being part of the world’s first debit card launch in the 1980’s before settling in with MasterCard for several years. Mark emigrated to the United States from Wales and took on progressive leadership roles where he found his passion for all things tech-related in the financial services world. Mark also recently penned Digital Life, a book that addresses the imperative for financial institutions to digitally transform. The author notes that, like for so many in the industry, COVID-19 rapidly accelerated the focus on innovation.

Looking ahead, Mark came to recognize that now is the time to seize the day for credit unions and is driven to support these financial institutions through this time of change. Mark notes several key challenges that hit credit unions over the course of the pandemic, including slow return on assets with loan loss provisions driving that lag on profitability, as well as interchange revenue on card transactions facing a downward trend.

All this together points to a clear strategy that effective leaders are doubling down on for the long term — deep focus on digital and electronic payments. Most customers prefer digital over in-person transactions, and it’s no coincidence that in terms of consumer satisfaction, banks are beating credit unions in satisfaction levels. Why? Mark is of the opinion that this is almost exclusively the result of the banking industry’s more enthusiastic embrace of digital solutions. Now is the time for credit unions to make bolder moves.

Lance takes the opportunity to ask Mark what his thoughts are on emerging technology’s impact on credit unions and the broader financial services landscape. Mark posits a big four, including artificial intelligence, analytics, biometrics, and somewhat linked to biometrics is the fourth — video banking. Here, Mark envisions ATMs becoming ITMs, or interactive video banking machines. This makes security ever more critical, of course, and Mark is excited about the initiatives around security currently under development in the credit union world, noting CULedger’s MemberPass as one example in identity services he’s keeping an eye on.

As credit union owned and controlled service organizations (or, CUSO), these types of organizations exist in different spaces ranging from member identification to loan origination to credit processing. CUSOs bring together pools of credit union members and technology budgets to scale up in ways that individual organizations would be incapable of doing alone. The biggest benefit to this collaborative effort, in Mark’s view, is that they are much more enabled to stay up to date with innovations in their industry. Fintechs can approach these CUSOs and offer embedded solutions within their ecosystem, or even go individually to member credit unions of that CUSO.

Mark recounts several successful fintech – credit union partnerships, as well as acknowledging the challenges that may stand in the way of credit unions adopting fintech solutions.  Limited resources and outdated legacy environments combined can pose significant challenges to digital transformation, and Mark is careful to point out that simply ‘buying’ technology is not enough to transform.

Only by aligning people, tech solutions, business processes, and data can a credit union truly succeed at innovation. When credit unions begin to look at fintechs not as the competition, but as collaborators — that’s when exciting advances occur in the industry Mark is so passionate about.

Key Takeaways

• – Covid’s impact on credit unions re: slow return on assets, loan loss provisions driving that lag on profitability, as well as interchange revenue on card transactions facing a downward trend together point Mark to a clear strategy that effective CU leaders are doubling down on  — the long term focus on digital and electronic payments.

• – Mark posits a big four in tech advancements making the most waves in the credit union ecosystem now and in the near future, including artificial intelligence, analytics, biometrics, and somewhat linked to biometrics is the fourth — video banking.

• – Mark warns credit unions to get rid of ‘mullet banking’ — or, technological haircuts that make the front end look great while the back end remains in legacy mode. Instead, a full on digital transformation may be necessary. To do so effectively, begin with a strategic, data-driven analysis of your current systems and culture before moving forward to find a partner and accelerate your digital transformation.

Additional Resources

• -Mark Sievewright, LinkedIn

• -Sievewright & Associates | Strategic Insights, Trusted Advice | Business Management Consulting for Credit Unions

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