Credit unions face a new set of challenges brought on by the pandemic. Not only are community banks and credit unions providing increased financial support to members — offering payment deferrals, loans, and counseling — but also there is now increased pressure to digitally transform member experiences.
While large-scale banks and emerging fintech companies race to deliver new digital capabilities, credit unions struggle to scale digital experiences that allow members to access key products and services. According to MuleSoft’s 2021 Connectivity benchmark report, 77% of global IT leaders surveyed claim that failure to transform will impact revenue, and integration of core systems continues to be a major roadblock for delivering on digital initiatives.
Digital roadmaps will only continue to accelerate as member expectations rise. Members aren’t just comparing credit unions to competitors like large banks and fintech startups; they’re comparing credit unions to their favorite eCommerce platforms and applications.
“Our members compare us to their last great digital experience. […] One of our biggest challenges is delivering a unified, personalized member experience. We want to stand out by delivering what really matters most to them.”— Jordan Lehrman
During a recent closed-door event, we sat down with three credit union IT leaders to learn from their unique experiences driving digital transformation. How did they unlock their core banking systems to enable transformation? Their strategies include:
- Creating a composable data architecture to transform member experiences
- Starting small and scaling quickly
- Promoting a culture of experimentation to build for the future
#1 Create a composable data architecture to transform member experiences
When it comes to delivering new member experiences, core banking systems like Symitar are the linchpins for transformation. But for one Washington-based credit union, replacing Symitar would have negative effects on members.
Instead of ripping out core banking systems, our first IT leader panelist, Jordan Lehrman, recommends reexamining how your systems are used. He said, “These core systems are really good at processing transactions. But, what’s happened over the years is that we’ve tried to use it like a customer relationship management (CRM), and we’ve created a monster of point-to-point connections.”
To keep up with the needs of the business and to quickly roll out new features and member experiences, the digitally-focused credit union needed to shift how the core banking system was being used, so that it was no longer at the center of the business. This required shifting to API-led connectivity, leveraging of Anypoint Platform, and connecting Symitar data to applications through reusable and purposeful APIs.
Rather than creating point-to-point connections, every asset becomes a managed API — a modern API, which makes it discoverable, composable, recomposable, and adaptable to the changing needs of the business through self-service. Jordan said, “Once you’ve decoupled and built out different process, system, and experience APIs, then you’re off to the races.”
For Jordan, exposing all the data in an easy-to-use architecture using system and process layers was the most critical stage of core transformation. It enabled the credit union to not only move faster in delivering new services and experiences to members, but also to more effectively use the member data it was collecting and storing to improve customer experience.
“Unlocking the core allows you to actually use the data that you have to make your members’ lives easier.”— Jordan Lehrman
Today, the credit union is developing the ability to quickly offer members new, personalized experiences via online banking, like pre-filling loan applications. When members are refinancing or applying for mortgages, the process becomes as simple as confirming the pre-filled information.
#2 Start small and scale quickly to move at the speed of business
“Speed-to-market is very important to us. We compared the time it would take us to do this using our previous methods, vs. scaling quickly using smaller, bite size pieces.”— Pam Brodsack
For our second panel participant, CO-OP Financial Services, speed-to-market is a top priority, but the team knew this transformation would be a marathon, not a sprint. They focused on gradually proving success with small, high-value wins, and resisted the urge to build everything all at once.
Pam Brodsack, CO-OP Financial Services’ Senior Vice President of Technology Delivery, recommends starting with a small use case, and including key stakeholders as beta partners in the project to co-develop APIs that accelerate their key initiatives. She said, “Partner with the rest of your organization and tie the MuleSoft project to a strategic outcome that will help the business.”
With API-led connectivity, you can move fast on your first project and accelerate from your second project onwards, leveraging reusable assets and a built-up organizational capability. On average, MuleSoft’s customers found that the increases in agility and speed provided by API-led connectivity led to delivering projects 3x to 5x faster and increased team productivity by 300%, compared to legacy or homegrown integration solutions.
CO-OP Financial Services also took a crawl, walk, run approach to addressing the skillset gap in their employee base. In this case, Pam started small by first training her onsite staff, and used a third-party firm to supplement in the interim.
Over time, she built up her agile delivery team and hired developers who already had MuleSoft experience. She said this strategy can be helpful to jumpstart fast delivery, but also emphasized how quickly junior developers can pick up and run with MuleSoft.
“When you bring in new developers they can pick up MuleSoft very quickly. The speed to bring in a junior developer and ramp them up has been a benefit to us.”— Pam Brodsack
#3 Promote a culture of experimentation to build for the future
Paramount to your success in adopting an API-led infrastructure and future-proofing your company, is your ability to transform IT into a nimble organization that can keep pace with market demands. This involves driving organizational changes such as decentralizing IT, paired with new operational practices, such as democratized application development and data access to business partners.
As you embark on that journey, our third event panelist, Dan Groves, Westerra’s Vice President of Information Technology, recommends engaging your team early and creating a culture of experimentation as an IT organization. He said, “We instilled a sense that we’re going to make mistakes and we’re going to fail, but we’re going to learn from those failures.”
Dan discovered that over time, making changes became easier because change and experimentation became the norm. He’s also empowering his team to “say no” to long-standing practices to make room for new ways of working.
“When you make changes you start with the people and the processes. […] We have more changes scheduled over the next 3-5 years, and people are bought in and engaged, and that will lead to more and more success.”— Dan Groves
Want to tackle your transformation initiatives “at the core,” and learn from more customers across industries who have benefited from API-led connectivity? Download our eBook to learn how API-led connectivity enables digital transformation.