Thomas P. Novak, AVP/Digital at Visions Federal Credit Union, discusses member-centric digital transformation during COVID-19...
Technology lies at the heart of every organization today. But, when that technology has a singular purpose that transcends the business strategy itself, it can be truly transformational. For Visions Federal Credit Union, technology exists to improve its members’ lives. “Whenever we start any new business endeavor, it always begins with the member as the central focus,” states Thomas P. Novak, AVP/Digital at the US-based leading credit union. “The technology is out there to achieve almost anything, but unlike some organizations, we consistently approach it with consideration for the member – the person – that will be impacted by the innovation.”
Novak is a highly experienced leader who specializes in digital transformation, specifically in relation to member-facing technology platforms. At Visions, he is directly responsible for the organization’s digital strategy. When we spoke in late 2019, Novak was in the midst of implementing an in-depth and innovative digital transformation strategy across the organization, one which he described as a central tenet for its success. Six months on, the adoption and application of new and inventive technologies continues in line with the company’s mission of “Making Visions matter to all its members, employees, and communities”.
To achieve this, he remains resolute in the power of technology to transform members’ lives. “The technology has to meet a member need and a business need, not just technology for the sake of new technology,” he states. “The typical technology development or the adoption process may start with research or implementation modeling, but the defining factor is how that process or that piece of technology changes the member experience, as well as the experience of our employees, and how it aligns with our overarching mission. And that does not always have to be complex or over-engineered. If we can save, for example, a member $200 per month on a monthly payment for their loan based on our interest rates against the solutions already on the market by digitizing the process end-to-end, or being top of mind in a moment of need for that member, that’s what really matters.
“We’ve carried out a lot of analysis to set our strategy, particularly in terms of how decisions position the organization, its members, and our communities,” he continues. “It allowed us to establish four key pillars for the first phase of our digital strategy: online banking, mobile banking, consumer lending, and consumer new account opening. That has since grown and evolved into a broader strategy for a full-blown digital transformation, through which we aim to grow our business by at least 100,000 members over the next five years. More than that, we aim to acquire those new members primarily through digital channels. Now that the first phase of our digital strategy is complete, we are focused on the next level. That means creating a digital ecosystem throughout the organization that fosters digital transformation; from the creation of an internal Digital Center of Excellence to supporting all member needs digitally, we are striving to act on our advocacy mindset.”
Novak has experience as a leader across several areas of the financial services industry. And, while working with Visions enables a greater dedication to members, he recognizes a general trend towards human-centric digital solutions. “I’ve certainly seen a heightened need industry-wide for visionary leadership over the last decade when it comes to digital transformation, and that’s increasingly about the culture or mindset that underpins that transformation. I think the impact of COVID-19 has accelerated digital transformation roadmaps and highlighted the thoughtfulness needed in the approach. From our perspective, it’s really shone a light on delivering digital with a human-centered focus – it’s about having empathy, being able to balance what is best for a business in terms of efficiency or specific technologies with how that is impacting the broader landscape and community that you serve. We strive to have digital solutions in place that are ready when our members experience a moment of need.”
The global COVID-19 pandemic has impacted every business sector. For financial services – and Visions in particular – it has reinforced the human-centric trend. “We’re in the age of the consumer right now,” says Novak. “You have some stellar companies and industries that, because of where they are on their digital journeys, were able to react and thrive very quickly amidst the disruption. In my view, it’s very difficult for any business to truly succeed if they haven’t made significant headway in putting members first, and we’re seeing that being played out as a result of the pandemic.” A great example of this, says Novak, is the physical and digital parity that a retail leader such as Wal-Mart has done. With e-commerce sales up, it is now planning to convert the parking lots of 160 of its stores in August to drive-in movie theaters, where it can sell products from the store for the patrons to snack on while watching the movie.
Thanks to Novak and his colleagues’ work on its digital transformation strategy, Visions has been able to respond rapidly to the disruption brought by the pandemic. “An example is the emergency loans we offered at the onset of the crisis,” he explains. “With that human-centric approach in mind, we developed a 0% APR personal loan for up to $5,000 over a 12-month term that was offered to any of our members in need. At the same time, we ensured that, even though we had to roll this out quickly to help those in need, it was an entirely digital process. Because of our previous digital transformation efforts, this meant very little operational work and leveraging the same infrastructure as we do for our other consumer loans. In turn, that created familiarity and simplicity for members and employees. At the same time, we created various digital processes, supporting over $79mn in residential mortgage forbearances, over $150mn in commercial mortgage forbearances, 19,280 consumer loan skip-a-payments, $15mn in SBA PPP loans, and almost $2mn in 0% emergency loans.
“The digital transformation efforts we have in place have served us really well. Even some of the ad hoc decisions we made along the way about how we set up remote working capabilities for our employees and the various enterprise collaboration tools have really made the difference. Quite simply, we had the right infrastructure in place at the right time,” Novak adds. “From an employee perspective, we were able to scale up very quickly regarding the overall remote working rollout, and on our member side, we just accelerated the adoption of technologies that we had already been using. Having that bedrock in place has been a real differentiator for us in comparison to other, similar organizations that may have more manual processes in their back-end operations. There is a common misconception in the financial services sector that big tech companies like Google and Amazon can do technology better, and therefore will take our customers. Through COVID, we learned that we can absolutely compete at that level. By working collectively towards objectives, we can compete against the biggest tech companies and financial institutions in the world.”
With members in mind, Novak explains that the impacts of COVID will be far reaching for people’s financial well-being. For many, he explains, survival mode has been the immediate new normal, and their job was to give them the tools they needed to succeed. “We’re here to partner with them, and the benefit and joy they receive from succeeding is the same that we get from being a successful cooperative. All of the technology implementations we have carried out, such as modifications to our ATM fleet, a general increase in digital services like machine learning powered interactions, and taking a multi-channel and empathetic approach to communicating with our members digitally, have allowed us to help shepherd them through a challenging situation.”
Naturally, Visions would not be able to guide its members without adopting the latest technologies. One area of interest, says Novak, is payments and how a member can access and move their money whenever they need. Visions’ focus on digital banking has been around improving its money movement capabilities, he explains. “We’ve made several UI/UX improvements to the bill pay experience and changed our limits on debit and credit cards. Similarly, on our public-facing website, we’ve rolled out the option for members to pay their loans with a debit card or ACH from another financial institution.”
Other initiatives include the Business Performance Department and the use of robotic process automation (RPA), which Novak says have seen a continuous rate of adoption within the business. While not always directly evident to members, he explains that RPA has streamlined and improved processes to enable better member service and an environment where employees can more readily focus on the highest value work.
When it comes to messaging, Novak highlights a concerted effort to increase the use of digital marketing to communicate with Visions’ members. “We’ve had tremendous success with our COVID-related communications, ensuring that messages were personalized, focused on members’ real issues, and targeted specifically to them. Getting those messages out has allowed us to enhance the overall experience for members at a crucial time and align with our mission.”
Such success has been enabled by close collaboration with technology partners, says Novak. SWBC, for example, has been instrumental in powering Visions’ payments and digital applications. For digital banking, Visions collaborates with Q2. This partnership, Novak explains, has proved particularly beneficial during COVID as Visions has had to implement swift and ongoing changes to help members. The massive increase in digital banking adoption and active usage was exponential. Q2 played a key role in Visions being able to seamlessly support the growth in the channel and educate members about convenient functionality, such as Card Controls and FinSavvy, Visions’ personal financial management tool.
“One other critical partner in our success is Extractable, a San-Francisco based digital strategy and UX design agency,” Novak continues. “We’ve been working with them on a complete digital transformation strategy to build our digital business roadmap beyond our first-generation strategy. This will include a fintech collaboration framework that allows us to more readily partner and do business with fintech’s as member needs evolve. It will also let us install a fully defined payments strategy which is instrumental for ongoing money movement use cases. Because of our partnership with Extractable, we are focused on growing a fully digital organization – not just a financial institution. There is a new normal because of COVID, and so we have to be ready for it.”
There is little doubt that Visions will be ready. In terms of digital banking and the broader digital organization, under current leadership the organization is several years into its plan. “Accelerating digital usage and enhancements across the other areas of the business is in the early stages, but that’s where that full, comprehensive digital business plan comes in. We realize that ‘digital’ is synonymous with ‘business’ – it’s not enough to rely on one digital arm or business unit, we must plan, execute, and deliver as an agile organization to a greater degree than any fintech or tech company, and that’s an immensely exciting proposition because of the trust we have earned with our members.”