By Robert McGarvey
For Credit Union 2.0
“We are not moving fast enough. We need to move 2x or 4x faster,” said John Janclaes, CEO of the $1 billion Partners Federal Credit Union headquartered in Burbank, CA.
In a wide ranging interview, Janclaes revealed exactly why he had put the credit union on what he describes as a journey of digital transformation – and he also talked about progress made.
You might think Partners is a blessed credit union. It has enough assets to compete and it has strong SEG ties – it essentially is the Disney credit union and pulls membership from the many Disney companies, from the theme parks to movies and ESPN. It also has two very different geographical hubs – southern California and Orlando, FL. It has a lot going for it.
But three or four years ago, Janclaes looked at the competitive landscape and he had a worrisome thought: “Credit unions are in the crosshairs,” he said. He elaborated that the industry faces ever smarter, tougher competition from big banks and also fintechs and companies like Amazon. “We need to keep up with that level of competition.”
Not that many decades ago, credit unions, he said, were a well balanced three legged stool that offered better rates, better service, and better convenience because many members could bank at work.
And then that happy bubble burst as consumers – increasingly – have demanded digital banking and many credit unions have faltered in the transformation from high personal touch and community based institutions.
“We recognized we need to keep changing to remain relevant to our members,” said Janclaes.
Fueling his thinking was a CO-OP funded study on digital transformation that found, in a survey of 221 credit union leaders, 88% said digital transformation is “extremely or quite important.” And about half the respondents acknowledged their digital experience is “inferior” to top brands like Google and Apple.
Janclaes wanted more for Partners, he wanted to offer members a digital experience that in fact rivaled the best of breed because – face it – those are benchmarks members use to grade what they get from their financial services providers.
A big step was that he went outside to Kony and also the Boston Consulting Group to help Partners in its journey. “We wanted to work with trusted partners who are industry leaders,” said Janclaes.
“We have de-emphasized inhouse tech innovation,” said Janclaes and that is because – looked at frankly – few credit unions have the scale and environment to attract the top tech talent that is needed to create a thriving 21st century institution. “We are picking where we can win.”
What especially attracted him to Kony – which has done the bulk of the heavy digital lifting for Partners – is that it had a limited credit union background and also had had successes in very different industries such as retail and energy.
“We did not want a credit union incumbent with a credit union mentality,” said Janclaes.
Read that sentence again. Credit union management orthodoxy is to vet potential vendors based on their resumes of past credit union hits.
But Janclaes turned this thinking upside down.
He elaborated that “we are getting better at picking strategic partners.”
He also has taken an increasingly active role. “Ten years ago I was not involved with our tech partners. Now I am. I talk regularly with their CEOs.”
He said he had full support from his board which, he explained, is composed of Disney executives.
“Our sponsor sees us a value for the company and its cast members,” said Janclaes.
A challenge, he added, is coordinating the new digital credit union with the traditional brick and mortar credit union He indicated that every measure says that in fact is happening as Partners has committed to offering an omnichannel presence that lets members pick how they want to interact. Most tasks – from account opening to joining the credit union – now can be done via any channel and that, believes Janclaes, is the future of credit unions that aim to thrive tomorrow.
Along the way, Janclaes has recognized that the traditional credit union way of updating digital functions via an annual or semi-annual upgrade just doesn’t work today. “We need to do this much faster, 3x, 4x. We have started with 2x – that’s the business problem now in front of us.”
“We want to make incremental improvements at a rapid pace,” said Janclaes.
This, he said, represents a massive “mindset shift” in credit unions that, traditionally, have aimed for perfection and that has taken time.
Today calls for faster and that means, often, perfection won’t be there.
But what happens will nonetheless be good enough.
That of course is how all tech companies think.
“Our members are already ahead of us in thinking that way,” said Janclaes.
And now Janclaes is determined to bring Partners to that mindset too.
An 11 minute video on the Partners digital transformation is here. It’s worth a view by any credit union manager, or board member, contemplating the next steps in their institution’s digital journey because that has become a ride no one can refuse.