Face-to-Face Innovation in a Fintech World

August 7, 2017

CU Direct’s new lab brings together credit union leaders.

By Karen Bankston

CU Direct regularly hosts CU and industry leaders at its Innovation Lab to collaborate on mapping and developing new solutions that improve lending and member engagement. Here, CU Direct SVP/Marketing and Innovation Brian Hendricks (facing camera) meets with two other members of the CU Direct team.

Since CU Direct opened its Innovation Lab in March, credit union leaders from across the country have gathered there to brainstorm ideas for new lending technology.

The new center in Irvine, Calif., about 40 miles from CU Direct’s headquarters in Ontario, has hosted innovation sessions for Credit Union Advisory Councils focused on the company’s product lines, such as the CUDL auto lending platform and Lending Insights analytics tools. A group of credit union executives also met with CU Direct at the lab this spring to talk through the possibility of facilitating participation loan applications through block chain technology, and another group has formed to study how best to convert paper checks issued to preauthorize auto loans into a digital format that members could present to dealers via a mobile app, says CU Direct President/CEO Tony Boutelle.

“The Innovation Lab offers a high-tech environment with collaboration cells for breaking into smaller groups around whiteboards,” he says. “Our aim is to create a lot of collaboration and discussion so that we can all prioritize together a combination of new products and improvements to existing lending products and processes.”

In addition to convening sessions with credit union executives, CU Direct—a CUES Supplier member—has also capitalized on its standing as a leading indirect lender to invite executives from Lending Tree, Edmunds and eBay Motors to discuss potential partnerships. “We’re working to connect credit unions with more lending opportunities in the fintech environment,” Boutelle notes. “There is an opportunity to go expand collaboration and partner with other organizations.”

Idea-generating sessions at the Innovation Lab might involve journey mapping and small group discussion on questions like “How would Superman look at indirect lending?” or “What tools might we adapt from other innovative industries for use in indirect lending?” In a recent session, credit union executives came up with 35 ideas, which were then culled down to two or three strong possibilities. A recurring theme has been using data generated through CU Direct systems like Lending 360 loan origination system and Lending Insights on loan performance and balances to facilitate faster, more accurate decisions on loan applications and create a more positive member experience.

In an increasingly virtual world, the Innovation Lab offers a physical presence for generating new business ideas. “There’s a process you need to go through before something is developed and implemented. We absolutely believe that people have to be face to face for this to happen,” Boutelle says.

Recognizing that software development requires close collaboration, IBM and other technology firms have been reeling in some of their telecommuting employees to a shared workspace with the goal of improving collaboration and productivity.

“It’s hard to get it right if you’re not sitting across from one another, with someone focused on developing the software, someone else focused on testing, and a product manager there making sure that everything is meeting product specifications,” Boutelle notes. “Our client credit unions are key stakeholders, and we want to be sure they’re close to us so that we fully understand what they’re asking for. Physical presence is critical to at least part of that process.”

Boutelle says his participation in CUES’s Strategic Innovation Institute at Stanford University helped inspire the Innovation Lab. “It really made it clear why we need to do this,” he says. “It’s hard to think outside the box when you’re focused on operations. You need a separate environment and agenda to foster innovation.”

Karen Bankston is a long-time contributor to Credit Union Management who writes about credit unions, membership growth, marketing, operations and technology. She is the proprietor of Precision Prose, Eugene, Ore.

If you liked this post, you might be interested in attending CUES School of IT Leadership, Sept. 20-22 in Orlando, Fla.

Innovation and fintech will be big topics of discussion at CEO/Executive Team Network, Oct. 10-12 in Las Vegas.