WSECU: their journey towards embracing disruption and digital transformation
Financial institutions, specifically credit unions, have had to navigate disruption since the early 2010s. New competitors, new tech, new rules, and ever changing member demands have been disrupting the normalcy credit unions have become accustomed to.
Content Marketing Manager, North America at Backbase
Ben Morales, Senior Executive of Product, Tech, and Payments at WSECU, watched first hand the move toward mobility and more seamless user experiences. He and the WSECU team recognized that even while enjoying business success, in order to become an industry leader WSECU would have to transform their old ways.
We spoke with Ben who shared his digital transformation journey and insight into what it means to embrace disruption.
What industry disruptors were affecting WSECU the most?
“We had been on our legacy system for a long time and it wasn't evolving. In fact, they were falling behind. We were seeing new functionality being deployed in the marketplace faster than our partner could adapt to. We saw adjacent marketplaces implement creative, engaging experiences, using newer technologies as well as seeing data play a bigger part of enabling engagement. And none of the things were happening with our solution at the time.
When we think about industry disruptors, certainly there were probably big players, but I think the major disruptor was in the adjacent marketplaces, where consumers were beginning to expect certain things to happen because other credit unions were doing it in their apps, whether that was happening in the retail landscape or other verticals. These things all played a big part in us deciding something needed to occur.”
Can you provide a few examples of old ways and approaches at WSECU that you wanted to transform?
“When thinking of old ways of approaching things, we began to realize that just from the voice of the customer perspective, not necessarily the market or competitors, we had to change the way that we plan. We really needed to adapt to real time feedback we were getting from our members and the market data and be willing to adapt our original plan that was created - including budgeting and allocation of resources. We also needed to break our old model of deciding how we make capital allocation more iterative and responsive to the time and the need versus creating that traditional waterfall type of long planning budget execution.
We also needed to move from a CapEx to an OpEx driven organization. We knew we had to change our planning component, and then along the same lines, our execution.
Last, we really wanted to increase our business agility to respond to the opportunities or the change in the members expectations and to leverage the capabilities that Backbase could provide us. If we didn't do that, then we would have made a huge investment without being able to realize the full value.”
What about your old tech stack did not work for your digital transformation vision?
“It was architected differently and it felt like it was a very monolithic solution that was developed and delivered based on a slow moving business model. That certainly was not what we saw in our future, so we knew that we couldn't move forward with that type of model or platform based on that. It was very clear for us that that stack would not work for our future.”
What about Backbase let you know that we were the best fit?
“Well, you know, we did a lot of research and used some well-known advisors in the industry when we initially started looking and evaluating the marketplace. And we realized the vendors were many of the same, it was just a different name. The models in which they built their technology, the way they were deploying it, the way they were evolving, it was all very similar. So we knew that it wasn't going to meet our future needs for us or our members. We started looking at other solutions and we even considered building it ourselves, but we acknowledged that what we do best is serve members. What we needed was a partner that was going to help us bring solutions to the marketplace, to our members and drive us along this digital journey.”
“We also knew we needed to have the flexibility to build the experiences we felt would differentiate us in our marketplace and we couldn't do that with existing solution providers. We needed to have a partner that would keep adapting the platform ahead of our requirements. I mean, I didn't want to be the smartest guy in the room, my job is to serve members. And I really needed a partner that could confidently drive the bus, if you will, and we were choosing which vendors were most relevant for our members and our business opportunity.We saw what Backbase did with their global footprint, how the company operated, and felt that this was a solution that could meet our needs.”
Can we explore a little further, why WSECU didn’t choose to build it themselves?
“The reality is we're not a software company. We don't build software, we serve members. Sometimes we can get enamored with the idea of building and owning it all, until version two comes along and things start to break down. I've been there, done that. So we realized that our job isn't to build software services but to deliver great solutions to members and Backbase had the flexibility in their platform for us to be able to do that.”
Were there any member demands you knew would require digital transformation to meet?
“With our Voice of the Customer platform we put together all of these member surveys that were going out from various departments, on various products, at various times. We synchronized all that data to create the story around our current member experience. The feedback was regarding different areas of our business and a portion of it was related to how we were delivering our digital solutions and our products to the marketplace. Once we had the story we had to do something about it. And the speed at which the story was coming at us, we knew we had to have a solution that was very responsive not only in how we resolve it, but in our operation as well.
We needed an operating model that we felt was much different than the traditional waterfall approach that we were taking which would take months and months to deliver.“
What were your top goals for digital transformation?
"As a member owned cooperative, our number one goal is member satisfaction, that's why we exist. So it was a must that we stay in-tune and relevant to our members to make sure where we're meeting their needs.
Number two was really speed. We needed a platform that was going to react to new opportunities, be willing to pivot and take a chance, while building and improving a constant stream of capability within the existing solution. So speed to market was probably number two.
Number three is to increase revenue from our digital channels. We know that there are members that are digital natives and we need to be able to serve them and increase our ability for our digital channels to drive revenue to create access to other revenue opportunities."
Did you face any hesitancy from the board? If so, what were their concerns?
“Change is difficult for all humans so there was hesitation from the board, but it was really about telling the story. When discussing it with the board, we took the time to build a story around how the member experience was today and ended with what we’d want the member experience to be. This happened in iterative sessions, rather than everything in one big bang so that they could grasp the important nature of this endeavor. The investment we were making was probably the largest we ever made in a software solution, at least in their minds. So, we had to walk them through to make sure they were right beside us and our decision to move in this direction.”
Of the 3 steps you provided for selling your board, which was most impactful?
“I think the most important part of selling your board is focusing on what is happening right now. This isn't meant to be derogatory, but if the credit union board members and other boards are fairly older it can be hard to truly understand what is happening in the digital space.
So it was important to tell that “what.” What is happening now in the marketplace with our members, both old and young, and what the future is going to hold.”
How have you positioned WSECU to be successful and remain competitive moving forward?
"We’ve focused on creating more business agility. To do that you must have the right solutions and partners. You also have to have a growth mindset and be willing to give up control to become a much more agile organization. So that's something we've been working on during this digital transformation journey.”
If you’d like to read more about WSECU’s digital transformation journey and learn how you can succeed in this new era of banking, purchase our new book The Engagement Banking Revolution today. All proceeds go to the Financial Literacy & Inclusion Campaign.