How new bank, credit union tech bosses are preparing for 2022

December 22, 2021 1:55 PM

Innovation moves ahead, despite the newest challenges presented by open banking, merger and acquisitions, hiring practices and the persistence of the coronavirus.

Credit unions and community banks across the U.S. are enlisting the help of new digital leaders to best adapt to all of these developments.

The importance of digital offerings at institutions of all sizes was underscored during the pandemic, as many did not have the necessary economies of scale to adapt to branch closures and the loss of in-person interactions. With the omicron variant spreading, technology will remain at the forefront of any decisions involving branch banking and customer interaction.

These four bank and credit union executives have stepped into new roles with a goal of guiding their organizations through the uncertainty while making investments that will transform their institutions well beyond the scope of the pandemic:

Raj Bandaru joined Kinecta Federal Credit Union in Manhattan Beach, California, in September, a month before its

merger with Xceed Credit Union

closed. This presented the dual challenges of staying innovative while also integrating the systems of the two organizations.

“Our recent merger touched every application and workflow at Kinecta … involving both core and digital banking conversions,” said Bandaru, the

$6.6 billion-asset

credit union's senior vice president and chief information officer. “Our strategy is all about digital transformation across our organization as a whole, focusing especially on leveraging data across business areas to help drive digital adoption.”

As part of its strategy to integrate digital features into its platforms in 2022, Kinecta plans to invest in solutions backed by artificial intelligence and machine learning. It plans to integrate those technologies into the credit union’s areas of underwriting, risk analysis, fraud, member engagement and marketing.

Currently the credit union is working with the development platform provider Constellation Digital Partners to build an open banking platform that will allow financial technology firms to integrate with Kinecta and launch services for members.

“While physical branches will continue, the future is to streamline the member experience and deliver simplified yet powerful technology solutions," Bandaru said. "Physical branch enhancements and the ability to fulfil all sales and service functions virtually are also important parts of our overall digital strategy."

But as more financial institutions like Kinecta adopt applications from various third-party providers, there is an

increased risk of cybersecurity hacking attempts

that place member data in jeopardy of potential exploits.

To mitigate this risk, the credit union looks at characteristics of potential partners such as leadership teams, organizational framework and financial history as part of its vetting process.

“We’re persistent with our adoption and enhancement of cybersecurity tools and awareness of various threat vectors to mitigate any data or ransomware situations … safety and security are ingrained across the enterprise. It’s part of our DNA,” Bandaru said.

To get the most out of its digital investments, Kinecta is focusing on training its employees and hiring new people.

“While technology is critical to success, without the right people, technology cannot progress successfully … retention and recruitment of top talent and work-life balance will always be critical for us,” Bandaru said.

Jeff Starke joined Republic Bank and Trust Co. in Louisville, Kentucky, as its chief information officer in July. He spent the first three months at the

$6.2 billion-asset

bank familiarizing himself with its existing processes and services to better understand the organization as a whole.

“When I joined Republic, and even sometime before, I was open to the fact that I didn’t want to immediately come in and attempt to start executing different priorities ... the best thing for me to do was rather to learn everything about the organization and its people without seeking to immediately disrupt what was being done,” Starke said.

As a result of that approach, he began working with the bank’s loan origination system for commercial lending to streamline the document-gathering process and automate the upload of the portfolios to its core platform.

Starke’s digital strategy for Republic in 2022 will focus on the overall reduction of spending in technology without sacrificing the efficiency of member-facing and internal services.

The first step is ensuring that the data generated through Republic’s client interactions can be understood with ease and is formatted consistently.

“If all of the data is not homogenized, and everyone doesn't share an understanding of what said data represents, it’s not going to be actionable and it’ll be a limiting factor to automation and simplification of technology … as you aggregate data, and report and provide analytics on that data, the meaning must be the same across all of the environments,” Starke said.

The next step is to review the bank’s processes to gain a complete understanding of how tasks function end-to-end. In doing so, Starke can identify the standardized steps that will be easiest to automate.

Once processes are streamlined and the data generated can be universally shared across the bank, Starke can address how to improve customer interactions.

“Now that processes are running faster, more efficiently and more accurately, how do you extend the benefit of that directly to the clients both through our banking centers and through mobile and online banking,” Starke said.

When Hunter Platt was promoted in November to help oversee digital innovation for the

$1.8 billion-asset

Sharonview Federal Credit Union in Indian Land, South Carolina, part of his initial strategy was to learn where the credit union lacked in technological understanding.

“One of the things that I’ve found is that new technology can be scary for some people, so a large portion of my day involves translating technology and helping to bridge the gap between problems being encountered and how we can use digital innovation to solve them,” said Platt, the credit union's vice president of digital and innovation.

Those conversations not only help the credit union identify friction points and unutilized functions within its internal processes, but also allow for feedback from consumers to guide which services to offer next.

Since the beginning of this year, Sharonview has launched services such as Alexa Voice Banking and mobile banking support for Apple Watch devices.

But offerings like voice banking are not a one-size-fits-all approach. Credit unions with assets of $100 million or less

don’t necessarily have the technological

resources to support the development of online and mobile banking platforms, much less to develop a voice banking system.

“From a digital innovation perspective, credit unions need to define what ‘innovation’ means for their specific institution with respect to scale and not get lost in all the shiny stuff,” Platt said.

His approach for the credit union’s digital strategy in the coming year is to find ways for technology to ease the workload of employees.

“We’re testing the waters and exploring partnerships with various fintechs … wherein one such initiative involves conversational artificial intelligence and having it handle transactional relationships, leaving our physical employees to develop actual relationships with our members,” Platt said.

With concerns of the coronavirus pandemic persisting into the new year, technology will determine how well the credit union can adapt to changes.

“Some people call it strategic foresight, but it is the idea of saying … ‘hope for the best and plan for the worst’ while striving to be fluid and flexible as we're figuring that out,” Platt said.

As senior vice president of digital experience and business transformation at Truliant Federal Credit Union in Winston Salem, North Carolina, Jeff Hibbard began developing his technological gameplan for the

$3.6 billion-asset

credit union by outlining themes for growth.

The three core items that Hibbard chose to focus on when he came into the role in May involved identifying areas within the credit union that stand to grow through digital service additions, positioning Truliant to make better use of feedback from its members to tailor products and their delivery and furthering automation throughout the organization.

As part of that strategy, the credit union has integrated various AI-powered technologies to automate call center operations and responses to member inquiries.

“In addition, we’re planning to press forward with process automation as well … and we're also looking at the use of artificial intelligence to really help us out in some of our underwriting,” Hibbard said.

The credit union plans to begin developing a specialized online and mobile banking platform for its small-business members next year, with a plan to launch the new system in early 2023.

“That segment of our membership has different needs in terms of day-to-day deposits, servicing cash flow management, payments and more … as such, we're looking to bring those capabilities more to the forefront in the digital space as a unique offering for our small-business members to meet those needs specifically,” said Hibbard. “It’s something that they’ve been asking for and our board has really supported us in terms of making those investments.”

Truliant’s investments in AI and digital banking are helping it stay relevant to members during the coronavirus pandemic, Hibbard said.

“Our challenge as an organization is as those needs begin to evolve and shift, how can we best position ourselves to be able to serve the members when they need service?” Hibbard said.