Innovation Credit Union | Reinventing the member journey to become Canada's leading Credit Union
FSI Game Changers
Credit unions have always prioritized a personalized and more flexible customer experience to distinguish themselves from traditional banks. At Innovation Credit Union, reinventing the member journey while redefining internal processes is a key objective to their digital transformation strategy.
In this interview, Dean Gagne, Chief Disruption Officer at Innovation Credit Union shares his vision on the future of digital banking and explains why ICU selected VeriPark to help them to achieve their goal to become Canada's leading digital credit union.
Q: Your goal is to become Canada's leading digital credit union. How do you want to achieve this – being a “Chief Disruption Officer”?
Our research shows that 41% of bank customers probably would or definitely would switch to a digital alternative. Whereas the percentage of banking customers who definitely or probably would switch to a credit union is 23%. So, there's a higher likelihood that they're going to switch to a digital alternative than they would switch to a traditional credit union.
On the other hand, 42% of credit union members probably would or definitely would switch to a digital alternative. So, when we look at what's happening within the banking industry, the place you want to position yourself is being a digital alternative to both bank customers and credit union members thinking of switching and playing in that middle ground between banks and credit unions because that's a space that's going to grow in the future.
Banks have a challenge in terms of moving from brick-and-mortar to becoming a digital institution. Credit unions have that same challenge. Traditionally, they have a “brick-and-click” mindset where the digital side is an afterthought. My job is to create an environment where we're “click-and-brick”. So, we're not getting rid of our traditional business but we're transforming that business to become click-first and brick-second, and my role is to make that transformation happen.
Q: Why did you choose VeriPark to help you do this? How do you think VeriPark differentiates from the other offerings on the market?
When we asked, “where are we going to take our technology strategy?”, there were 3 key principles that drove our decision-making, and these are important to understand why we chose the various partners that we chose.
- In a digital world, we have to build out a digital environment where mobile is first.
- In order to do that, we had to have a cloud-based platform.
- We need to have partners who are excelling within that cloud-based environment.
If you look at Gartner or Forrester and their evaluations of different kinds of global tech players in different spaces, Microsoft is a leader in almost all categories. But Microsoft's greatest strength is integration, so when we made our move to the cloud, we made a series of decisions. Within the cloud, we were going to be in Azure, then we chose the Office 365 platform for all our content, collaboration and communication. Finally, we chose Microsoft Dynamics 365 as our ERP platform for Finance & Operations, HRM, Retail, Marketing, Sales and Service.
When we looked at that ecosystem of Microsoft and ERP in order to build it out and leverage our Microsoft investment, we realized we needed to look for products already built on top of that platform instead of us building on top of that platform. So, we would need partners that help us on several fronts if we're to leverage our Microsoft investment:
- They should be building on top of the Microsoft stack,
- They must have an integrated approach,
- They productize the Dynamics platform.
So, we looked at 37 different digital banking platforms worldwide, but we just didn't find anything that we liked. Because a lot of them had good platforms, but they were singular. Either they had a good online and mobile banking platform or a good CRM or AOS or LOS platform. But what they don't have is a well-integrated platform.
One day, we were in a conversation with Microsoft and we said if Microsoft had a digital bank we'd buy it. They said, we know a partner, and introduced us to VeriPark. VeriPark was the piece of the puzzle that we were missing. It was the “integrated platform” that we chose with a whole area of integrations on all the different channels including online and mobile banking, CRM, AOS, LOS, and our marketing platform integrated into it.
The key differentiator with VeriPark is that they have a fully integrated platform so we can have a consistent member experience across these platforms. You can't do that if all the platforms are different, so one of our guiding principles is “best in class at integration” versus “best in class at application”.
CRM is the backbone of any system. You have to know what's happening with a member at any given point in time and you've got to be able to record things. You need an integrated platform to do that. When we look at our account origination, member onboarding or loan origination systems, we need to be able to track where our members are in the customer journey and we need to have the single view of the member in order to deliver better service, whether that service is in branch, or through the contact center or online and mobile banking.
All these aspects set VeriPark ahead of the rest of the pack. We felt it took us on a different technology S curve and gave us a leapfrog ahead of the rest. The rest are buying the applications, then spending all their time integrating them. And when there are upgrades or when something changes, they break. You're constantly trying to deal with the integrations. One of the biggest IT problems you have is the breaking of the integration as everybody is changing their platforms. It used to be every three to five years but now it's happening every 18 months. Everybody is upgrading and managing those integrations is problematic.
Q: What do you see as the biggest challenge currently for financial institutions?
Consumers are moving at a faster pace than financial institutions are. You can't build the platforms fast enough to keep up with the consumer behavior change because technology changes are happening so fast. Consumer behavior change is actually keeping pace with that, and, in some cases, driving the change. And the institutions have too many legacy platforms and they're just not keeping pace with what's happening with consumers in the marketplace.
Q: Where do you think the future of digital banking and digital channels is headed? How important is it now to provide digital offerings and personalization? What does embracing omnichannel mean for your customer experience strategy?
The branch of the future is the mobile phone. If I can't do what I need to do on the mobile phone, the financial institution has failed.
Carl Sewell wrote a book called Customers for Life. And in the book, he has one chapter dedicated to a concept called “’Systems, not smiles’ delivers good customer service”.
It's not a customer service model that you traditionally experienced. It's a “self-service model with customer support” rather than a customer service model. You have to enable customers and members to be able to do everything themselves, and only when they can't, you have to be instantly available to help them do it.
This is different than coming in and having that personal interaction and your smile and a good customer experience. People don't want to come in. They want to do their banking at midnight or 5:00 AM in the morning. Because during normal business hours, they're busy doing their own job. That's where we see that the banking world is headed.
And it's not just the banking world. During the pandemic, it demonstrated that local businesses struggled even though they have superior customer service. They struggled during the pandemic because people just weren't going to their retail outlets. It's the ones that had an online and digital presence, who excelled during the pandemic.
Market capitalization for Shopify in Canada exceeded the Royal Bank during the pandemic. The value that people saw in a digital online shopping platform actually exceeded the Royal Bank that had been around for a century and a half. In one year, a startup that didn't exist 20 years ago passed them in market capitalization.
Look at the market caps of all the tech companies. The tech companies are the world leaders now in market cap. It's not those that own land or own resources or have huge manufacturing operations. They're not the ones that are leading in market capitalization. It's all the tech firms.
That's where the world's headed, and you better be a part of that.
This is part one of a two-part interview with Dean Gagne, Chief Disruption Officer, Innovation Credit Union. The second part is soon to be published.
One day, we were in a conversation with Microsoft and we said, if Microsoft had a digital bank we'd buy it. They said, we know a partner, and introduced us to VeriPark. VeriPark was the piece of the puzzle that we were missing.
Chief Disruption Officer, Innovation Credit Union