Benjamin Maxim – MSUFCU

Graeme Gilovitz

Hey everyone and welcome to this episode of the digital transformers podcast. Here at the podcast we’re obsessed with how companies navigate the rapidly changing environment that we find ourselves in every day. And we especially love talking to leaders from a wide range of industries about how they are meeting the challenge of digitizing their business and customer interactions

Graeme Gilovitz

Hey everyone and welcome to this episode of the digital transformers podcast. I’m Graeme Gilovitz

Eytan Morgenstern

and I’m Eytan. We’re your hosts here on the podcast. Today’s guest is Ben max VP Digital Strategy and Innovation at MSU Federal Credit Union, CTO at the Reseda Group and CTO at Spave, I’m not sure you have time for all that. We’ll discuss that shortly.

Graeme Gilovitz

Today we’re going to talk about some of the tech in the credit union space, about the receiver group, which is a new credit union service organization and their first Fintech acquisition live Give Save, which is going to be rebranded as space. We’re going to explore some of the questions that many leaders in seat in the credit union space of thinking about, do I develop tech outside bringing partners? If so, who, how, when in general? If you’re listening today, you’re going to hear some great war stories about Ben’s long career in digitally innovation in the sea you space and what those tips will be applicable to many other industries.

Eytan Morgenstern

Ben. Thanks for joining us.

Benjamin. Maxim

Absolutely thanks for having me on guys.

Eytan Morgenstern

Our pleasure. So we went through a number of titles here. You hold, you have a lot of hats. Um so maybe you could start off with, you know, explaining what these three things are, how they relate and what what what does that do for the C. U. Space?

Benjamin. Maxim

Absolutely. So I kind of start with a little little history of myself in digital and the credit union space and kind of lead to where we got more recently with all these many hats that I wear. Um So I’ve been at Msu Federal Credit Union for 14 years. I started as a web developer, did a lot of development uh did our first IOS app. So that’s kind of the start of us getting into innovation. Um We we built all our own products in house starting from that point forward. We built online banking, uh IOS and android mobile mobile apps. Uh and then we will continue to grow and then as we build more and more things we of course had more and more things to maintain as an organization. So we ended up building a little software company within the organization that I lead for about four years. But a lot of it got toward toward the end where a lot of it was just maintaining that software we built. So are now Ceo have been in the role about five years. She’s who hired me into the organization 14 years ago. She want to get back to doing more that organic innovation that we really we had prided ourselves on uh in the credit union space. Uh So uh she offered me an opportunity to create an innovation program and innovation lab that we call the lab at M S. U. F. C. U with a focus on finding Fintech partners. Again, we we we made the decision, you know, a long time ago that we need to build everything ourselves and we realized that that’s not sustainable. So we need to find partners to really make a successful there’s some things that we really didn’t need to do because they were great products already in the market. So really identifying what those partners were, how we could pilot them with our members early on in the product cycle.

Benjamin. Maxim

So before we get into a 23 year, very expensive contract, just do a smaller scale pilot to see if the interest was actually there from our membership. And along the way we discovered a Fintech called Live gives Safe. They had a product called space. Maybe you can see where this will end up in the end from the intros. But we started with, you know, the idea that there would be a pilot partner of ours in the fall of 2020. Um and then as we had more and more alignment, so a small snippet on spade um, and credit unions, both of us are very mission aligned in the sense that save does roundups and self tips towards charitable organizations, savings goals, also some study analysis, but it’s really that focus on giving uh and causes and really the ability to make that more accessible and inclusive for for wider audiences. So it’s not a lot of us already have a way we give uh two different organizations, There’s a lot of people who don’t think they can make an impact or a difference because they just simply can’t get $100 or $1,000 or whatever they perceive to be, you know, an impactful amount. The goal behind Spain is to let you do micro transactions and do deposits that are, you know, uh you know, to round up or percentage, so 50 cents at a time, dollar at a time here and there, and then really show you the impact that that makes overtime. Credit unions are doing the same thing within our community, uh you know, so as we were going along this journey, we had some strategic plans to create the receipt of group holding holding company Cousteau to do Fintech investment, um the way credit unions work, we’re not allowed to directly invest in the Fintech, so we need to form, creating a service organization that we can put up to 1% of our assets in.

Benjamin. Maxim

Uh and then from doing that, that entity could then uh, invest in other Cousteau’s, uh so the Frontex must be there for Mancuso or spin off a subsidiary of their own. That’s a cute, so, Um so as we went through that process, we did the investment, and we liked it so much, we ended up taking the whole round and ended up as the 80% majority owner of spades. Uh and we’ve been working through this spring bringing that online and getting it ready for prime time here. We launched kind of in a beta pilot since uh at the end of May I think was May 26 when we got it out the door. Um and right now we’re going through the summer stabilizing everything kind of identifying, so space connects to Plaid, so we have access to at least 11,000 plus financial institutions that you can pull in. Uh and then also there’s I think between four and six, I don’t remember the exact number 46,000 fintech apps as well, so if you can move money with plaid you can connect to it. So there are things like Robin Hood that you can save two and yeah, there’s a lot of opportunities, so with all that, the CTO role became something I get to do for Rosita, where we do spade was the first of hopefully a few more. Um and then we’re also doing straight investment as well. And some certain fintech partnerships as well that we started from the lab and I kind of grew into that investment investment ready place. Um And then yeah, serving in the traditional CTO is of a fintech as well as my uh being the credit union job going uh with the lab, wow,

Eytan Morgenstern

you seem, I can’t imagine how you get all that done. Um It sounds like a lot of work. Um And we’re gonna talk I think a little later on about spade a little more about what that means and why can’t move into an investment space. But I wanna actually talk first about your background a little bit. I think it’s interesting. I was looking at your resume and linkedin um And uh and you started from a very very tech space, you’re a programmer initially and you move sort of through this sort of you know or 14 years at M. S. U. F. C. U. Um to to becoming this uh leader than innovation. So you’re really a tech person in the sea you space rather than in some cases to see you person to learn some tech, how does that influence how you see things and how you do things?

Benjamin. Maxim

Yeah. Absolutely. I think um you know I I started a computer science degree at msu uh didn’t really know what I wanted to do with it when I graduated and I kind of somebody on the credit union right? No I I’ve learned I’ve learned that yes there are many of us that have no clue what we’re going to end up doing. Um But you know I was a few few months removed from graduation and you know it was the recession was just taking hold um And I was like oh you know I probably get a job creating looks interesting and I met with uh you know now Ceo but she she was the V. P. E. Commerce at the time for my interview and I was like wow this place sounds pretty cool and she had some some grand vision for where it was going to go and you know, I think you know a lot of my ability to take tech and translated with credit union is on her and her goals um for the credit union that she started way back then and then you know, as she progressed through, I think largely because of her vision to the ceo role, I was able to to kind of join her along the journey and we really, you know think differently when it comes to to check and credit unions and we’re looking at things uh for competitors, you know that are what people use every day. So we don’t look at the credit union down the road as a competitor uh in digital we look at what is amazon doing, what is facebook doing, what is instagram doing, what are people used to uh in terms of kind of that digital experience, the digital delivery and how do we recreate that and kind of translated into a financial sense uh you know in the pandemic, we have a lot of people who are you know figured out especially in the the food space and also grocery shopping and others you know they’re kind of the curbside pickup or the delivery. So how do we translate to the financial services?

Benjamin. Maxim

Can we have a, you know, start on digital kind of pick up service for things that you need that you know, you don’t necessary want to spend all your time waiting in the branch, but it can be ready for you, right, when you show up. So there’s some ideas that were playing around with their, but really looking at influence from uh, the tech space unless you know, finance and Fintech is a great marriage of those two, but really more focusing on the tech has, has really been where I’ve focused and looked kind of my whole career.

Graeme Gilovitz

Yeah, it’s kind of interesting cause I think I read somewhere that you guys were saying that a third of all your, your members are not close proximity to a branch, so that really does speak to the need for the digital for you guys, right? And especially, you know, things like the pandemic and just remote working now and remote learning everything’s remote people are needing more. Tell me for people who are not tech heads and I mean that in the nicest possible way, I’m definitely not one of them, how should see you professionals, you know, determine what tech they adopt in this space because yes, everyone is looking to best in breed, everyone’s looking for the, the amazon life experience, look at amazon is the pinnacle of customer experience digital transformation and the rest of it. But should they be pushing this role and this and having someone who is more a C T O R A V P a digital transformation be leading these projects. And should that person from your experience now that you’ve come from that tech background, is there, do you think there’s a plus there? What do you think is the best way that see you should be looking at this sort of, I guess the role and discussing transformation.

Benjamin. Maxim

Absolutely. So as I’ve done this, uh, you know, innovation role for a couple years now, um, and met some others who are trying to accomplish this at their credit union, but they don’t have the formal kind of champion type role that I have. Um, so really, I think what you want to look for is someone who can own own it, but not not be the only person. Um, so I’m a team of one of the credit. You’re looking to spend a little bit just because we’ve, we’ve grown in there starting to scale scale the lab, but we’re always going to have a small team on purpose. So we can bring in other individuals from, you know, lending payments branches call center, like whoever makes sense to include, we’re going to include them on the team when we start up an exploration for a partnership. Um, so, you know, you don’t have to have one person that goes off in, you know a conference room somewhere, locks the doors close the shades and come up with an idea really should be about developing a culture of innovation where people are, you know, you have an opportunity to feed the ideas. So we have an employee ideation program that we encourage employees to submit their ideas and then collaborate on those ideas um compensate

Graeme Gilovitz

do you compensate and or give some sort of reward for to incentivize that? Um those ideation.

Benjamin. Maxim

Yeah, so that’s a great question. So we used to have an employee ideation program where every idea that was selected got $50 and then we had some really bad ideas that were submitted because everyone’s just trying to get $50 a month or something like. Um and uh in all sincerity like there were some really good ideas that came out of that program, but I kind of ran its course and they were, it got too clunky. There are too many ideas that you can compare. This idea was submitted last week. This one was submitted three years ago and we already said no where we said yes. Um and and the team that was involved in, there was a team of managers that were selecting the ideas versus the employees and one of the main changes I Institute, we converted the program was to a lot of the employees to select and vote on what ideas they wanted most. So we give them 55 votes. We narrow down the list of top 10, we kind of do it in cycles versus kind of being an ever present opportunity. So we do do around and at the end we narrow it down to about 10. The better ideas that can actually qualify to be a pilot. They’re big enough. We can actually bring a team together. Some ideas are good, but they can be implemented in an hour and we just go go ahead and feed those to the normal cycle. Um, and then we have them vote and then you they can either spend them all in one thing or we can, you know, spread them out however they see fit and I think that’s been really good for engagement. Um I think that the side project or the side benefit that came along with us that we didn’t realize at first, but are realizing along the way is how much of an impact, having an opportunity for employees to be involved in this process. They’re not innovation, employees, but they have great ideas.

Benjamin. Maxim

You know, some of them even doubt themselves and don’t think they have great ideas are not creative. I’m not a creative type so I can’t, I can’t participate. It’s really funny on the first day of our our workshops when people are like, oh yeah, I’m just not creative like that. So, you know, I don’t know how I’m gonna do here, that’s my big and we do like the hopes and fears exercise and they’re like, my biggest fear is I’m not going to be creative enough. And luckily by the end of even the first couple weeks, like, oh, you know what? I have some creativity. I mean, it’s just about unlocking it and being free and being comfortable with the group and actually speaking up and sharing ideas. So kind of kind of back to the original question. Um you need, I think at least one person or a small team to kind of lead the charge, but let them be flexible enough. Um put them in the organization where they can make a difference. I report directly to our ceo on purpose, so if needed and we need to get people on board with things, they know that it’s important to her to uh foster the innovation across the organization. Yeah.

Graeme Gilovitz

And so it doesn’t really matter with who they need to borrow that resource form, whether it’s a technical issue and uh a ui person or a banker, they can pull that resources as as as needed. So it’s more like a, having a really strong champion of the cause and then finding who is an expert in that area. Okay, cool. Isn’t that that really leads us to this whole idea of rosita. And it’s funny because when you mentioned earlier, I was I was really curious because I’ve never heard of this before. And you sort of explained it up front because credit unions can’t directly invest in Fintech, they had to set up now. Are you guys the first like we talked to a lot of credit unions, I’ve never heard of it. I’ve spoken a lot of banks, we spent a lot of insurers that have labs, you know, that’s probably, I think the insurance industry is probably one of the biggest we also spoke to recently, Nicola Miller who is the head of digital Innovation over BT Labs, which is like the third largest spender in europe. Are there any other credit unions doing this at the moment? And what made you guys decide to set up precede us so that you could take these actions.

Benjamin. Maxim

Absolutely. Um so que so they are not new the way we’re doing it is a little different. Absolutely. But a lot of times Cousteau’s end up being and things that are more kind of ancillary to the banking services, like a credit union set up an insurance company as a cue so or a title company or something like that. So services that are that don’t fit necessarily naturally in the banking model or the credit union model but are things that credit union members would actually need as part of the trip?

Graeme Gilovitz

That’s not a lot of that. Yeah, that’s more product oriented and maybe share of wallet orientated as opposed Exactly. Experience and and efficiency.

Benjamin. Maxim

Exactly. So yeah, so in Century city group, so a couple years ago like 2019 2018 strategic planning, we had this idea that we wanted to form a queue. So you know, and explore that as we started to get, you know, and a lot of it’s more from the larger, uh, there are some smaller credit things that do Duke uses, but a lot of times when you get closer and closer to 10 billion, um, there’s some new rules from the C. F P B. That changed or whatever. You know, if it’s a C. F. B. I think it is, but you know, some regulations that change out of the recession where larger institutions, no matter whether you’re cutting Union Bank or whoever after you have 10 billion assets, your interchange, which is how a lot of us make our money, which is the money you spend when you swipe your credit card, the merchant pays that and the banks get a portion of that And that’s how we do a lot of operations, but it cuts in half when we hit 10 billion in assets. So, you know, a lot of us are looking for alternative revenue streams because You know, to lose that, you know, overnight makes it really challenging for us to function. Um, so really, we set out a couple of years knowing we were going to reach the $10 billion dollar mark and you know, hopefully a lot longer than its accelerated quite a bit. But we, we thought new, we need to get started early in one of our strategies to identify alternative revenue streams was to form a whole, uh, uh, do so. Um, and then as the economics of Covid happened, we had less people taking loans, we had more people with funds on deposit and just kind of sat there, we got all these stimulus payments in and we got another round and then we had a very large amount of cash in our overnight funds which earned very little kind of an investment sense.

Benjamin. Maxim

Um, and so we decided now is kind of the perfect market opportunity for us as well. Kind of once in a lifetime to hey this money just sitting here, let’s convert it into an investable asset. And we had the M. S. U. S. Seaboard create and give the funding for research group. So we started with, uh, Half of the, half of the allotment were allowed by the rules, half of that 1%. Um, so we transferred over that money to, to, you know, maybe do a couple investments. Uh, there’s a credit union um, D. C. Fund that came out of a group. We participate. Members development company called the Circle Fund. Um, and it’s spelled C U R Q L if you’re interested in learning more about the circle dot com is where you can learn more there, but we kind of pooled our resources and one of the first investors in that fund and then we thought, well we can do it there. Maybe we can do it ourselves as well. Uh, so that’s where we kind of started down this path. The receipt of holding company would be able to allow us to do some investments in Fintech that we’re partnering with, give them more capital, allowing us to have alternative revenue because as they are successful, we obviously get, get some some back, some of the models work. We get a discount on the software, so also a benefit to the credit union as well. Um, but really also with that kind of mission to make the industry, but don’t have stronger software focused on credit unions, because there’s another rule for us is that they have to serve 51% credit union members and you can find that by clients members revenue. Somehow it’s got to be. So that’s another opportunity for us as an organization. We don’t have to stick to just member service, we can do some other kind of users. So it kind of allows us to different, you can

Graeme Gilovitz

diversify and go outside the market. So do you expect this strategy to be more adapted by or more adopted rather by other credit unions? Or do you think it’s only those people who have already started to really understand implement and drive their own digital transformation?

Benjamin. Maxim

Yeah, absolutely. So I think, you know, we, you know, now the events are happening again. Uh, we started talking and telling our story. um you know, we’re we’ve been to four events this month um in sharing that and there’s a lot of interest now and people like, oh, I didn’t think we could do that, and, you know, there’s a, there was a small group of us that mostly, you know, had initially invested in that Circle Fund who started thinking, oh, well, what can we do on our own and then, you know, what can we do together? And then, you know, it’s kind of grown from there. And I think the more we talk about it, and the more we get out there and share with our credit unions, share a lot, you know, we don’t find ourselves to be, you know, competitors gonna try to stop each other from succeeding as a whole industry, you know, I don’t even think we add up to the top over many banks, so really we’re competing against banks overall. Um so we know that we need to work together to do that, and there’s a lot of collaboration between our our credit unions, so we tell our story we share. Um and then I think that’s natural, I think, and to partnership with a startup, they need that partnership as well. Uh and, you know, we have some of the business sense, we have the members, we have the loyalty and they have some really great ideas that can serve some really great needs.

Eytan Morgenstern

It’s really fascinating. It’s such a, you know, the crazy in space and I’ll group you temporarily together the community banks in the sense that a lot of difference between that and the larger banks is that feeling of where you walk in and, you know, the people a little bit and more connected and a lot of that’s been challenged over the last 10 or 15 years, probably in general, as we’ve gotten used to smartphones and so on, but also during the last year and a half where branches were closed or not as available and there was that sort of invisible wall between us and, and our and our fellow human beings. Um, so being able to diversify and the way you’re talking about, I think is, you know, really gonna be key probably to credit unions, competing as we go forward. Um, you know, they’re, they’re the article I read about amazon entering into the insurance space and you know, that, you know, when amazon gets into your industry should be very careful and it’s only a matter of time before they get even more involved in other industries. Like, you know, they have some, some elements of like, uh, finance, but like getting the banking and so on, they’re gonna come for that kind of stuff as well. Eventually, probably. So if you’re not prepared to, you know, deal with that and, and provide that kind of experience for your members, you’re gonna have a hard time, I think, um, I want to jump back for a second now because we mentioned earlier on, you know, when you earlier on, when you joined, uh you know the credit union that you start, you came back, you want to develop an IOS app 2000 and nine. And I looked up earlier to confirm the, the iphone was only announced in june of 22,000 and eight.

Graeme Gilovitz

Um, I think I was still on the Nokia back then and Nokia was still the number one seller of mobile

Eytan Morgenstern

phones. It was huge. There’s a,

Graeme Gilovitz

0:21:03 – 0:21:04

I had a Motorola.

Eytan Morgenstern

So they started off

Graeme Gilovitz

with a role. I started off with like I saw funny enough they just, I gotta interject you, sorry, I’m doing a podcast about my, my football team And they’re talking about the guy that bought my team back in the 80s.

Eytan Morgenstern

He meant soccer for all the Americans

Graeme Gilovitz

I’m not talking about, I’m talking about Aussie rules football. It’s a totally different sport. Even this guy walks into a meeting, they said he opens a briefcase and it was a mobile phone. They thought it was something out of James Bond. This is 1983 I think it was um, and I think I had a motor role that was like a touch the car when I first got, when I’m showing my age man. Yeah,

Eytan Morgenstern

so there’s, there’s, by the way, I think a famous and I’m sure there are the Forbes cover of Nokia when they hit a billion dollars in sales or whatever it is and they’re like who can knock them out, you know, who can dethrone the king was like a year or two before.

Graeme Gilovitz

Was that the banana phone? Was that the banana phone that like I used to pull it down and

Eytan Morgenstern

I know a lot of different phones like Nokia as a company. Um anyway, back so back to you know, within a year. I I don’t exact date when you decided this, but you want to launch an IOS app in the credit union, not a place known for being the most cutting edge in general. Um and that on the one hand you said that and you also mentioned earlier that you know at a certain point, you know, you realize you also want, you know you have to bring in partners, you can’t do it on your own. So my question is first of all what made you think of, you know, we got to get on this smartphone or time on the iphone train and was there a point you can say we decided here because of this issue, whatever it was that we need to bring in partners, we can’t do it all on our own. It’s not effective anymore.

Benjamin. Maxim

Absolutely. So yeah, so back then, yeah, I went to a conference that was supposed to be out like creating rich internet applications and they had this iphone development track. I was like, oh what’s that? I’m gonna go sit and I said like one just to see you know what did it look like? Yeah I think they had just just maybe that week or so announced or even maybe after this that the third party app store was coming online so you could actually deliver apps, do the iphone and the three Gs was just about to come out and I still had my my flip phone Motorola. Um I was like and we have been developing an app and we developed an app for you know the flip phones and blackberries and kind of that you know web application protocol style uh mobile website. Um And you know I thought that was the coolest thing ever that I could access and you know look at my balance and transfer funds on my foot phone um you know pennies, pennies, a kilobyte or whatever it was but it’s probably costing you

Graeme Gilovitz

more money to check your account than you actually had any account. That’s

Benjamin. Maxim

exactly exactly. Yeah, it’s cool. So yeah exactly. So yes, very real. Um And then you know went to there um And then you know kind of the original model from Apple was gonna be, everyone has these web apps. I was like okay web apps but then it’s like no we’re gonna do these like native applications. Uh And and that really was like yeah you know this is where everyone’s moving everyone big is going to be on there. I remember when I first got my iphone, it’s like, why can’t I watch netflix on this? Like the website was blocked and didn’t work? I was like, this is why do I have this thing? I could just do, you know, nothing with it. So, you know, knowing we used to be there, you know, you could access websites on it, right, but it wasn’t the same experience because they were all desktop website because the small thing wasn’t that that that uh well known. So it was 2009 uh in the summer, came back from that conference, pitched it to uh are now ceo of EPE commerce at the time. So I think, I think we should build an iphone app and I want to do it and she’s like, okay, let’s do it. Well, we took a little figuring out um and then we had to work with our core provider to build um uh to their api stack, which at the time was like this very interesting and legacy kind of socket connections and text files going back and forth and strings versus what they eventually have now, which is more what you expect? Soap xml style. Um so, you know, that, that was interesting. So we had to build out that platform then while we were doing all that, we decided also let’s do online banking ourselves because that’s the same kind of rails as well.

Benjamin. Maxim

Um and then uh android of course came online during all that time, like we might as well get here as well and then we kind of because all our executives and especially my boss at the time was really into her her blackberry. So it’s like we’re ever going to do a blackberry app. I’m like, well let’s wait and see. And then the Windows phone and there were a few others that were, you know, let’s just wait and see, we got requests, but we’re not gonna do it until it’s a thing. So we made the right choice sticking to the platforms we did. Um but kind of the thing we learned in the exploration, we also looked at, there were some people that spun up companies to deliver applications for credit unions, but every single credit union will look the same, you just swap out your logo, there is no differentiation in the market. And I feel like we made the right choice because when we when we launched in september 2012, We hit number 37 of free financial apps in the app store. I thought that was, you know, that was amazing. Yeah, we dropped as more and more people had them. I think we’re roughly in the 2-300 mark, you know, considering we’re, you know, just little credit union michigan I think we we did all right for for ourselves. Um and then, yeah, as as we grew, you know, we were going to hire this big team to do that? We ended up hiring like two additional folks that was enough at the time. Um, but then as we continue to grow, uh, and we had more and more features we went on to add and then, you know, we now had went from, as a company from when I started, we had left for like 100 and 1,570,000 members. Now we have 300,000.

Benjamin. Maxim

So as we’re growing, we have to make sure this app now works for a larger, we have to upgrade servers, you know, some of the ways we’re accessing the database cashing information, like there’s a lot of kind of that kind of work that had to go and kind of the performance optimization. Um, and like I was saying, and then show we got to the point where a lot of what we’re doing is that, and not add a new cool, innovative features.

Graeme Gilovitz

It’s just the maintenance, it’s the maintenance of, right?

Benjamin. Maxim

Yeah. So, um, we ended up finding, you know, and heading down this path where before I actually moved into my role, we partnered with, we want to chapala. Um, so we start up through a connection that we had with Visa. Um, and we went out to the Visa Innovation Lab in SAN Francisco and met with them and you know, we’re like, oh cool, we’re gonna meet with the start up and we’re gonna have a chapel in like three months and then we came back and said how do we work with the startup? Uh We’re like yeah how do we work with the startup? We need we’re used to having you know these 20 year old companies, 50 year old companies that have all these like rigid security documentation, process documentation that we can just hand over to our risk team, legal security and they can review them all and then everyone’s happy Startups don’t have those. Um so really we you know had to work with them and change and refine our processes uh to make it work but we we did not move quickly. So this three months became about 10. Um but we did get it out there in October of 2019 which is great timing concerning the pandemic rolled around and we needed some relief for our live chat agents. Um But that kind of experience was what led to me having this innovation role, you know, someone to work with those partners and foster those relationships and help them become stronger partners because we can, you know, if we’re doing due diligence for a pilot, it’s a lot different than doing due diligence for a three year multimillion dollar contracts. So we can do it, we can risk mitigate by not giving up sensitive member data, we can use de identified data, we can use a white label app where members can sign in and use things like plaid to connect. Uh, and then, you know, it’s, you know, that stuff they’re doing anyway with other Fintech app.

Benjamin. Maxim

So it really lowers the kind of barrier to entry for us. So we can get something in front of our members as quickly as possible and not be this long process that is overly complex and doesn’t really help.

Graeme Gilovitz

It’s interesting because you said it took you 10 months rather than three months. But I guess that may be delayed by your standards and maybe your timeline. But the question also has to be asked, which is that 10 months? How much faster will you than maybe your biggest competitors?

Benjamin. Maxim

Yeah. So to our knowledge, we were the first credit union to get a live member chapa out into the market. So that was our goal and we did achieve that. So yes, yes. But we were racing that there were several that came online a few months later. So we we were we were close.

Graeme Gilovitz

So that’s what it’s always like. I think we all run our own race but sometimes we forget that we could be slowed by our own standards. But then you look at the next person to hold on, still beat them by a mile. Right.

Benjamin. Maxim

Exactly. And now, you know, there’s a lot of chapel companies in the Guardian space that now you have a really great product that you can say, Here you go, here’s this chap up, you know, But I think you know, we also learned some things in that angle where we approach it as a technology project and the chat about is actually a service service project is a customer experience project. Uh and we started with you know, the I. T. Team and really, you know, we launched a second step out from the lab, that’s an internal use case for our internal knowledge base and we started with service, you

Graeme Gilovitz

have to you have friends on the outside,

Benjamin. Maxim

gene on the inside, you gotta

Eytan Morgenstern

do your homework,

Graeme Gilovitz

Let me ask you because this really follows on from there. So my understanding of when I look at credit unions, it’s all about customer experience, what makes him so different from banks is at the end of the day, a bank is generally operating to service the shareholders. Right? Whereas in a credit union it’s servicing the members who are the shareholders.

Benjamin. Maxim

Right? Exactly. So

Graeme Gilovitz

from all the experience we’ve had, we’re talking to people within the credit union space. The number one thing is really has a drive member experience. So when I read something that you, in preparation for today, I heard you being quoted in, I think it was fintech futures where you said, msu always looks at the return on investment, are away for fintech innovation problem projects. If it breaks even reduce costs or makes a profit, then the credit union will consider it. So my question is where does member experience come into that equation? Because it’s the one thing that’s not mentioned.

Benjamin. Maxim

Yeah and that one’s harder. So sometimes the R. O. I. Is truly only the experience. So um you know I’ve kind of tried to figure out like what are the right metrics, what are the right way to tell that story? Um We’re using a lot of kind of surveying and qualitative data to to organize that. Um And I have a counterpart that helps me with that whose R. V. P. A. Digital strategy and research and digital experience. Um And you know we we survey the people are producing these pilots uh You know we we we did the employee Chiappa, you know we surveyed them over four weeks to see like does this improve your experience? And from week one to week four we went from roughly 50% to 100% because a I can learn and train and we could do it. Uh So we’re doing the same thing with our members. But yeah there are some metrics like that. We look out in the background that we don’t have to ask like are people adding services to their account? Are they having larger balances? Are they interacting with our digital properties more and more frequently? Um And we’re really trying to build out our analytics suite to really understand what are they doing? Uh Within in the properties We have 1 uh Uh kind of homegrown pilot that took us a little while to get out the door, but we recently put it out there to our members that’s purely based on uh kind of the experience level. So you talked about the relationships and how that’s important to to credit unions, especially in the digital age and we struggled over the last 15-20 years. So we set out to try to solve that. Um we have, you know, we have 30% of our member, even before COVID 30% of our members, a lot more than three miles from a branch, 14% live out of state. So digital is important to us and we have roughly 68,000. So even those that are close to empty branch only interact with us digitally.

Benjamin. Maxim

So all the great service that we talk about and that customer experience, we give over the phone via chat or in person. Those digital only folks are not getting a single ounce of that. So we’re trying to figure out through our digital strategy. How do we build that relationship in those digital touch points? So you don’t need to interact with a person. So yes, we have Fran is 11 angle for that. Gene actually was crafted to help speed up the experience when you’re talking to the customer service agents in the different areas so they can answer you more quickly, they have to put you on hold to go ask someone a question. Uh you know, all of it is really focused around that. Um, but this thing, we’re looking at all the financial concierge and really we’re taking your, you know, we have all this data about our members, um but we don’t really know things about what are their goals, what are their, uh, you know, kind of personality, risk, appetite, that kind of stuff, or what was their financial literacy? Um So, so we asked them kind of in a stitch fix style quiz, um there’s a little bit more engaging, so you know, what do you like? They’re more engaging than I’m going to describe him now is like, what are you saving for? What are your long term goals? What are your short term goals? You know, how do you feel you’re able to handle your finances, You know, do you need help in these areas? Uh, so that way we can recommend products and services, but also some of these Fintech that we’re partnering with as well through the financial concierge kind of, that is really ultimately a recommendation engine uh, in the background. Um so, you know, that that’s kind of also our way to kind of this little marketplace of fintech apps to kind of solve some of these needs that people have.

Benjamin. Maxim

0:33:40 – 0:34:28

So you’re really concerned about your student loans were partnered with a Fintech called, changed where you’re, they help round up uh, round up your student loans to round up your transactions to pay off your student early. Uh So that’s an opportunity there? Um So, you know, when you say, hey, I would like to pay off my student loans in the next several long. It’s okay. It was a great, maybe you can help you get there. Um and then, you know, spade is a financial wellness app so we can talk more about that, you know? Uh but really, you know, I’m interested in terrible giving. We can recommend spade. I’d like to better understand how my finances are happening. You know, there’s cash flow analysis, there’s some text and categorization um that you can get from that. So, uh, and then you can also do the general giving and then, uh, if you’re looking to do some certain saving, saving schools that automates the process for you, that would be another recommend.

Graeme Gilovitz

0:34:28 – 0:35:12

Well actually include the links in the, in the, in the notes below for spay for circle. And the last one was change. Change. Yeah, we’ll put that in. So if anyone listens to it, they can go and have a look for more information. That’s really cool because that’s, I think that’s always the tricky one for people who are not inside the credit union, which is, if we’re working with, if we want to be a partner with a credit union, you hear these terminology, but it’s like, doesn’t everybody want to try and make more money and reduce costs and accelerate processes and efficiency, but at what point does does customer experience overtake hard numbers, right? It’s like almost like Heart and Soul is worth more than something else? The cash.

Benjamin. Maxim

0:35:12 – 0:35:47

Exactly, yeah. There needs to be enough cash to make it work. But yeah, I mean, ultimately, you know, kind of our belief is that you take care of the members, you take care of our employees. You know, the business will come, the money will come. Um and that’s held true. RCO truly believes in that and making these investments uh in and things that will improve the member experience overall, both for our credit union and now it’s being accredited service organization. We look for other creditors to partner with um as well on these apps, especially space, we’re gonna be white labeling them and getting them out there and really making it a way to, to help credit unions be successful as well as an industry. Very cool.

Eytan Morgenstern

0:35:48 – 0:36:06

That’s, that’s a great stuff. Um So I want to conclude with one sort of bigger question which you probably limited already until now we’ll see, what do you see as the, if you can number one trend that credit unions to be aware of looking forward now we’re

Benjamin. Maxim

0:36:06 – 0:37:32

focused. So probably, you know, kind of, I’ll generalize it and then talk about a little bit, maybe the shorter term impact. But I think there’s kind of this huge movement towards embedded finance. So how many times do you have an app where you just put the payment method in at one point and you never know how like you get in your Uber, you get in your lift, you get in your Air BNP, you order your groceries with insta carter or shipped and all this stuff just shows up at your house and you don’t really have to pull out your wallet to pay for it. Um And then we have a lot of students coming into the university where they’re keeping money in cash app or Venmo, you know, it’s not hitting the banking system. I think Starbucks has the largest amount of this, I feel like it’s many billions of dollars just sitting parked in the Starbucks wallets. Um So you know there’s been a lot of money that’s coming out of the banking system, so kind of from a credit union perspective, how do we participate in that ecosystem where people are choosing these other methods because of the customer experience, You know, I read an article recently that said uh uh you know, consumers are looking for new or better Fintech apps are looking for better technology from their financial institution. So you know, we have a great opportunity there um and then kind of the biggest kind of short term movement is all this buy now pay later stuff. Um there’s a lot of players in the space, um you know how to credit, you get involved in that. You know, we have a lot of students who have told us in surveys that they won’t shop on the site, that doesn’t have buy now pay later option. So how do we educate them? That the products we have actually allow you to do that in a different way?

Benjamin. Maxim

0:37:33 – 0:37:42

Um you know, that is the purpose of a credit card, but you know, you don’t have to get into debt. You can, you know, spread a payment over four months and we can help you do that. And there’s some digital tech ways that we can accomplish that.

Graeme Gilovitz

0:37:43 – 0:37:50

Is that just because those companies are just speaking louder to that audience, because they just don’t know what’s available, some of these products. No, I

Benjamin. Maxim

0:37:50 – 0:38:18

Think, I think they speak in a way that makes sense. You know, it’s embedded in the it’s embedded in the process. So as you’re checking out, you can do it, you know, to use a credit card and paid off over four months, you have to actually like decide, Okay, this this thing I bought was 59 99. I need to divide that by four. Uh and then, you know, go and pay it every month for the billing date. Uh So there’s there’s some work that we can do on our side as financial institutions to make that easy and help them understand that these products already exist and they can be used in a in the same way.

Graeme Gilovitz

0:38:18 – 0:39:22

That’s crazy what you just said though about Starbucks. Um Because it makes you realize that there are companies out there that their primary business is not what they do. So for instance, I have a friend whose father was in charge of the credit union for Qantas. Did you know that Qantas is actually more of a bank than than an airline? They’ve got more money in Treasury. So you look at a Starbucks and you say Starbucks has so much money, you said it’s like like it’s actually like a bank. Um I remember hearing, I think it was a mckinsey interview with the ceo of I. N. G. And he said we have to compete with paraphrasing his words, They have to compete with google the likes of google and facebook for tech students and employees. He says before, we used to see ourselves as a bank with an IT department. Now we’re a tech company that happens to specialist finance. And I think that’s the cultural shift in a lot of our businesses. Like you said any business today who’s got a large sum of money sitting in a wallet is technically a bank.

Benjamin. Maxim

0:39:22 – 0:39:23

All right. And

Graeme Gilovitz

0:39:23 – 0:39:30

they probably investing that. So what is the what we see is the customer may not necessarily be how they make all their money. Right.

Benjamin. Maxim

0:39:30 – 0:39:31

Exactly.

Graeme Gilovitz

0:39:31 – 0:39:32

Crazy. Right.

Benjamin. Maxim

0:39:32 – 0:39:33

Right. Absolutely.

Graeme Gilovitz

0:39:33 – 0:39:44

Absolutely. When we grew up a bank was a bank and you walked in I. T. You you know we’re back office of the company. It was very very simple. Now the lines are extremely blurred and

Benjamin. Maxim

0:39:44 – 0:39:45

how

Graeme Gilovitz

0:39:45 – 0:39:48

we operate is just changing very very rapidly after the

Eytan Morgenstern

0:39:48 – 0:39:56

way. Okay, so before we actually finish we have a few rapid fire questions. Um okay

Graeme Gilovitz

0:39:56 – 0:40:00

go with the first answer that comes to mind. That’s the only advice

Benjamin. Maxim

0:40:00 – 0:40:00

we asked.

Eytan Morgenstern

0:40:01 – 0:40:06

Okay um most recent or favorite person you follow on social media linkedin,

Benjamin. Maxim

0:40:06 – 0:40:25

twitter, whatever it is. Who? Um great question. Um no, it’s not that reason but Kamala Harris.

Eytan Morgenstern

0:40:26 – 0:40:33

Well here it’s okay. You know the three words for you Graham who Vice president of US, United States. You know

Benjamin. Maxim

0:40:33 – 0:40:34

you do

Graeme Gilovitz

0:40:34 – 0:40:49

realize I do read right? I am. Yeah. And you, I knew about Fran and you about hurricanes. You forget I’m from Australia. Right? I’m from Australia. We travel we know we’re worldly um in up to three words, what is the best part of your job

Benjamin. Maxim

0:40:54 – 0:40:56

playing with tech? Oh that’s

Eytan Morgenstern

0:40:56 – 0:40:57

nice. That was good. I like

Graeme Gilovitz

0:40:57 – 0:40:58

that. And

Eytan Morgenstern

0:40:58 – 0:41:01

this next one is great for you. I think Apple or android.

Benjamin. Maxim

0:41:01 – 0:41:02

Easy. Apple.

Graeme Gilovitz

0:41:03 – 0:41:04

Oh okay.

Eytan Morgenstern

0:41:04 – 0:41:05

That’s quick.

Graeme Gilovitz

0:41:05 – 0:41:09

Would you use the word digitization or digitalization?

Benjamin. Maxim

0:41:12 – 0:41:14

Mm Digitalization.

Eytan Morgenstern

0:41:14 – 0:41:17

So when it’s good

Benjamin. Maxim

0:41:18 – 0:41:19

it’s

Graeme Gilovitz

0:41:19 – 0:41:22

a bit of a competition between a few of these questions.

Eytan Morgenstern

0:41:23 – 0:41:48

It if you look at the technical term digitization is converted analog digital digitalization. What we talk about digital transformation but it’s not it’s not how we use it. That’s not how we, you know, as people say, you know, they don’t, no one says uh people say mediums instead of media, we’ll fix things. Language later. Fine. Okay, final one, complete the sentence. The future is fill in the blank.

Benjamin. Maxim

0:41:49 – 0:41:50

The future is now

Graeme Gilovitz

0:41:51 – 0:42:19

awesome. Like wow, thank you so much. Ben, like today has been amazing, so interesting to hear the story of not only your career, but this change in the sea you space. Like I said, we’ve never heard anything like this and it has really opened our eyes to what what is the foot in the change? And I hope that our listeners have also learned something from here. Like I said earlier, we’re gonna put in the comments below. We’re going to link to those places. Um and we can also reach out to Ben and us through the podcast.

Eytan Morgenstern

0:42:19 – 0:42:28

Yeah, thank you for joining us. And uh and for all listeners out there, you know, don’t forget to subscribe on Apple, Spotify or Youtube for upcoming episodes. Thanks for being with us.

Graeme Gilovitz

0:42:33 – 0:42:34

Yeah.

Eytan Morgenstern

0:42:41 – 0:42:41

Mhm