Developing a Technology Strategy for a High Tech Credit Union: Part 2


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In Part 2 of this two-part Q&A, Mike Upton, chief digital and technology officer for First Tech Credit Union ($ 14 billion, San Jose, Calif.), Discusses reducing member friction in channels digital, chatbots, First Tech’s branch network strategy, and how his career in banking software brought him back to the credit union he joined in 1993. Read part one here.

Answers have been edited slightly for length and clarity.

CU time: What are the specific digital tools that First Tech has put in place to reduce friction for the member?

Mike Upton Mike Upton

Upton: From the start of the pandemic, we had already embarked on the transition to a business transformation platform. So we adopted the Pega system as a layer of business process management and CRM, and that was going to be the business platform through which we took our business process. And we do a lot of end-to-end automation in streamlining that, because if we make it easier for our employees and remove clicks and manual intervention from the workflow, not only does it help our employees, but it benefits our employees. our members because it reduces the number of errors and increases the speed of the experiment. We’ve seen a lot of benefits in the past, if you were a member and came to the site to dispute a card transaction or request a new card, a lot of these activities required manual intervention, and we automated it all. . We are in the process of automating our cabling system – we brought back something that was a 23 step process to four steps. So we have a very aggressive automation strategy that we’re going to implement across the entire credit union, and that will be a big part of 2022.

CU time: AI-powered chatbots have become popular among CUs. What do you think of chatbots, and have they been implemented at First Tech?

Upton: At present, First Tech does not offer an AI chat feature. A bit of it is our recognition that we are comfortable being what we call a fast follower. There is a good deal of learning about the pros and cons of being first to market, or of being early on with AI and chat. The good news is, members love it, but they love it as long as it works well. What a lot of institutions have discovered is that they over-implemented some of these tools when they didn’t have the operational infrastructure, or the data management behind in a number of areas. cases, and they ended up reducing those offers. So when you introduce these types of experiences and capabilities, you really need to have the skills and operational readiness in place, and you need to strategically determine whether it makes sense to introduce them, rather than introducing them broadly and generally. to then find out that it got overwhelming and have to back down. We believe that we are in the right position, that when we introduce these abilities, it is more important to present them in the right way than to be the first to introduce them.

CU time: Across the industry, there is a consensus that traditional branches are not disappearing, but are evolving to become smaller and more focused on advisory services rather than core transactions. What is First Tech’s overall branch strategy and how does its digital strategy relate to its branch network?

Upton: The transformation of that in-person experience was already well underway before the pandemic, so we had already moved to a kind of open floor plan and engaged counseling model. We are fortunate that in our network we already have retail people, such as mortgage specialists and wealth management advisors, already physically on site, so this model of face-to-face engagement with more complex financial discussions and advice [services] was the imprint we had deployed.

One of the unique features of First Tech is that a number of our facilities are located on the campuses of the employers we support. So, being Microsoft’s credit union, for example, we have several experience centers on the Microsoft campus, so when Microsoft employees moved away, those locations had to move as well.

Branches are important to us and they will always be important to us – humans will always want to connect with humans. As far as what they log on to and how often they will log in, I think that has clearly shocked the system, and we’ll see how that sets in and evolves, but we still see a future where the focus is on. experience will have its place and its role, and will be very important to our overall success.

From a digital perspective, we want to make sure that if someone goes to a physical location and has a conversation with someone, the rest of that conversation is known throughout the credit union. Prior to the pandemic, we deployed an omnichannel strategy in which we use our Pega system to capture all member interactions, whether in person, through the contact center, or digitally, into this CRM platform. Thus, our agents, whether they are in person, in the call center or in the back office, have a 360 degree visibility of these engagements. And again, the automation work in the background will continue to make this even more transparent.

CU time: You held positions in two major banks before joining First Tech. What attracted you to the credit union industry and made you want to take the leap?

Upton: In fact, I started my career in the software world. Coming out of school in 1990, they didn’t have fintech, they had start-ups, so my first job out of school was with a Portland, Oregon-based start-up that made software for thousands of banks and credit unions. The company was bought out and I ended up at FIS, where I was responsible for online payment and invoices. Then I went to a payments software startup, then to Bank of America as head of consumer payments, then to their mobile online banking innovation team, then to Capitol One.

But to come back to this first start-up that I started with in Portland, it was a First Tech SEG. So my wife and I became members of First Tech, I think it’s been 28 years at this point. So [I had] the opportunity to take advantage of the bootstrap software experience, and [working for] big world [enterprises], and bring that to First Tech, which serves the tech community, is growing rapidly and is very ambitious not only to transform First Tech, but to be a leader in transforming the credit union community in a more holistic way. For me, it was like coming full circle.

CU time: Now that you’ve been with First Tech for a while, what offers do you think are essential for credit unions to have in order to successfully compete with the big banks?

Upton: There are still many opportunities when it comes to opening and integrating a digital account. Making this experience simple, transparent and more personalized – this is an area where the industry can differentiate itself and be competitive. Clearly, mobile is a key platform and a number of institutions have the opportunity to improve their mobile offerings. Again, the holistic experience, as opposed to just having the features, is going to be important.

The movement of money has always been at the heart of the institutions’ value proposition, so once again, continue to make this transparent, providing flexibility of choice to members and remaining secure. [is important]. It’s not the most exciting thing to talk about, but as consumers have gone digital, so have the bad guys. The speed, sophistication, and frequency with which we see bad guys trying to do bad things have increased. This will continue to be an area in which institutions will need to make investments, as well as [figure out] how to offer security and at the same time simplicity and fluidity.

CU time: What do credit unions offer that sets them apart from the big banks?

Upton: I think the people who are drawn to credit unions are drawn to something more than just a place to transact. There is a cause, a community, and a feeling that you are part of something bigger than yourself. It is a powerful human emotion – this feeling of community, of belonging and of pride. So our job is to make sure that the people who have chosen to join this community have the experiences they hoped for. It is a deliberate choice to join a credit union, and we must recognize and reward this choice by meeting or exceeding their expectations.


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