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Yeekeng: Welcome to the podcast by America's Credit Unions. I'm Yeekeng Yang, Digital Media Design Specialist at America's Credit Unions. On this episode, I am joined by Shanon McLachlan, President of Credit Union Solutions at fintech company Jack Henry. This one's all about technology, and some topics we discuss include challenges credit unions face with technology modernization, how credit unions can leverage technology and benefit from it, And how it all benefits member experience.
Enjoy.
Yeekeng: Welcome Shannon to the podcast. We're very happy to have you on. so just to start, why don't we just start with, introducing who you are, just a little brief background on you and what you do at Jack Henry.
Shanon: For sure. Well, first off, thanks for having me. I appreciate the opportunity to speak with you. So I, I'm the President of Credit Union Solutions at Jack Henry. Uh, What that means is for all of our credit union core clients, right? Anything that goes on there rolls up to through my part of the business.
Anything that you can think of in terms of daily operations, development delivery, support, all of that is part of, of my world.
Yeekeng: So let's get started with technology modernization and what it means for credit unions. Can you tell us a little bit about that?
Shanon: For sure. Well, I mean, There's, there's the concept just generally of techno modernization that, that suggests that We want to make sure we keep everything current and forward thinking and all that, but why do you want to do that? Right? What is our strategy behind tech modernization? And it's all about capitalizing on market disruption.
When you think about what's happened recently, right? So COVID, COVID accelerated all the digital channels, digital delivery by years. Depends on who you talk to. Some will say five, some will say 10 years, but by years, that's a major disruptor. So you think about digital evolution, and that's a big piece of technology, technology modernization.
And it's how how do we enable that? And how do we accelerate that? How do we keep at the forefront of it? So that we have an ability to deliver to our members through a platform, right? That, that enables, enables. Functionality enables capability, enables speed to market and so on. So that's what we, that's how we look at technology modernization.
Make sure that leading edge can up, can update easily and can enable. Customer and able to member enable our customer to have better interaction with their members to to deliver that ultimate experience
Yeekeng: Yeah, it is crazy to think about with how bad the pandemic was. A lot of different good things came out of it too. And, and our technology landscape is definitely affected by that too. So that's, that's just interesting to think
Shanon: sure. And, and you think about that too, right? The downtime downtime is, is not an option, right? So everything that we're doing, we're doing to. Maximize the uptime, make sure we're, we're delivering and that our members can take care of themselves right when they want, where they want and how they want.
Yeekeng: So what is the biggest challenge credit unions can overcome with a modern technology strategy?
Shanon: I think it comes right back to that member and to the member convenience.
They want certain things and they want it when they want it, they want it how they want it, they want it where they want it. How are we going to be able to deliver to them without modern technology? How can we get to them in a fast and efficient manner? You know, it's got to be secure, but it's got to have minimal friction at the same time.
And I think that's a big piece of what we can overcome.
Yeekeng: And then on the other hand what is the biggest benefit to credit unions that adopt a modern open platform?
Shanon: I think there's multiple of them, right? So if we, if we walk through. Back to speed to market or speed to delivery as they want to bring new products and services or as they have members come to them and say they really want this product or service. How can they get it to them? It's that availability and uptime.
Can you, you can't appear to be down. You can look at what happens in social media when there's an issue. And social media lights up really quickly. Efficiency and automation, right? We're all looking to do things more efficiently, more consistently, and do it in a, in a automated fashion where possible, so we can free up the human elements to have that human interaction that's really, really special in the credit union space.
And then I think also visibility. Visibility into the data, visibility into the analytics. That that modern systems, modern technologies can bring together and you wrap all that with AI and machine learning. There's, there's a really bright future ahead for all that we can do here.
Yeekeng: Yeah, I can. It's going to be a crazy decade with AI getting better and better. And, and maybe a little bit scary too towards the end of the decade. Let's see what happens.
Shanon: We can touch base on that one in a couple of years, right? And see
Yeekeng: Right. Yeah. Yeah, for sure. So how can credit unions leverage technology to get the data and insights they need?
Shanon: Well, I mean, first off, the data, right? We, we need to be able to collect all of the data and bring all that data together so that it can be in a, in a common location that industry standard tools can can look at and can leverage. But we also need to eliminate some of the problems with that data or some of the problems with securing that data.
So open banking, we look at as a huge component of that. And, and our platform, our, our tech modernization platform is all about enabling not only the credit union and the member, but it's about enabling that, that FinTech provider as well. So as an example, we've created a partnership with with MasterCard, with ity and a big piece of that and, and with Plaid as well.
But a big piece of that is to eliminate screen scraping. Right? Because we want to gather the data in a secure way, as frictionless as possible. But when you've got all that data, right? How, how are you getting it? How are you updating it? How are you maintaining it? And, you know, frankly, bringing it all together.
In a place where you're securing it and you're ensuring your, your members are providing are performing best practices. So we, we did those partnerships to avoid or to eliminate screen scraping from our platform. So you don't anymore have to go. Give it all your financial relationships and give it all of your usernames and passwords and then update them every six months when, you know, the common aggregation engine would be doing that.
We're doing it all through those integration layers, if you would, that are enabling us to be able to get better insights. and eliminate the financial fragmentation that our, that our members, you know, experience when they've got all these different apps on their phone. How can we bring that all together into one and bring it to them in a way that they can see their total relationship with all financial instruments?
Yeekeng: And to follow up on, you know, leveraging technology to get the data and analyze the data also poses security risks too. So does the strategy slash platform help credit unions mitigate risk and address security threats?
Shanon: Absolutely. Everything from, the secure nature of the platform, like You know, it's really, it's one thing to take a product and move it from like an on premise or private cloud environment into a public cloud environment, lift and ship, but really they're not designed for that, right? That just moves the processing from one location to another.
What we've done is we've completely rebuilt all this stuff on the cloud, purpose built. For the cloud, on the cloud with all best practices. So security, the elasticity of the cloud, right? That's all built into the product. Now, on top of that. We can identify is your, is your, is that end user really you, right?
So eliminate the account takeover risk, all fraud, right? Synthesize and analyze all fraud across all channels and really enhance the, the security and the fraud mitigation. Right. It's eliminate, eliminate or stop as much of that as soon in the process as possible. So it's not making it downstream.
So that's all part of the tech modernization platform.
Yeekeng: How does this strategy help credit unions grow?
Shanon: So you think about that and the platform is an enabler and you go out and you look at all of the apps that are available out there. You look at all the financial apps. And your members want to use them. Well, the platform allows for ease of integration in a secure method for those fintech providers.
And it also allows in our digital solution to bring that fintech provider as an embedded technology into into that app. So bringing together. Tools, the APIs, all of all of the components that really enables the credit union in a simple, fast, efficient and secure way to offer more to their members and by offering more to their members in a, in a highly available environment is going to bring in more and more.
Dollars, more and more membership.
Yeekeng: And so let's say a credit union chooses to modernize and integrate are there any tools and resources available today that can help with integration?
Shanon: Absolutely. So, so one of the important things to understand is that everything we're developing in the tech modernization is an API first type of a development effort. We use our own APIs, right? So if we're delivering something with our product, it's using an API and that API is something that then is available to our customers or to their partners.
So API first is, is a key tenant. We got developer toolkits. We've got published APIs, so you can go out to jackhenry. dev, and you can actually get access to all of our all of our published APIs that are out there. In addition, we've created a, a design standard as well, and those design standards are available to you at jackhenry.
design. At present, we've got between 800 and 900 partners that are integrated into the platform already,
Yeekeng: So let's kind of shift gears here from the credit union side and to the, the member side. So what role does everything we talked about with technology today play in enhancing member experience?
Shanon: you know, it's all around member experience and it's all around providing them an efficient, a simple, and a robust way to interact with the credit union really back to the beginning, right, enabling the member. But, but what does that actually do? Our goal is to make sure that we provide that better experience to bring the member closer to the credit union, closer to the community that they operate in.
But that improves the depositor. Think about everybody's out there running after deposits today. Brings more members, brings more depositors. Into that environment, into that ecosystem, it simplifies the borrower's experience and it supports that financial health that we're all, you know, that we're all chasing, right?
We're all at a different spot, but we're all driving and striving towards financial health.
Yeekeng: And what advice would you give to help get buy in on, on investing in technology modernization efforts?
Shanon: Well, I think you got to look at it for the long run. This is not about today, just today, right? And it's really not about the next one to three years. I think you got to be thinking about. So where do I want to be three years, five years, 10 years? What's the technology going to be at that time? What's the technology evolved from up till now and how is it changing?
So what am I going to do to keep up with that fast rate of change? And think about, again, the acceleration we saw under COVID. That's going to happen again. That multiplier is going to happen again and over that time frame, but you got to be in a place where you can perpetually evolve and you can perpetually innovate and, you know, be thinking about who you want to be, what you want to be, not just where you are today and what next year's budget looks like.
Yeekeng: So to wrap this all up, how does Jack Henry help credit unions plan for the long term future?
Shanon: Yeah, I think it really helps just to. Support their strategy. I think if you look at what we're doing, we're here as an enabler. We're here to, we're here to enable that credit union to be the best that they can be, figure out what their strategy is, work alongside them with their strategy and bring their, the tools processes, the capabilities, the partnerships.
That makes sense to help enable that strategy. And we've got some really, really great stories where our clients, our prospects are out there and they, one of the, one of the things that we hear kind of regularly is that our open banking approach, our open banking infrastructure is a leading factor in why they decided to go with us.
And it's more than. It's the technology partnered with the business strategy. So the enablement on the business side partnered with the community and the community that, that Symitar has in the credit union space is, is fantastic.
Yeekeng: Alright, and before we close out here, were there any last thoughts you had? Anything you want to wrap up on?
Shanon: You know, I, I think If anybody has any questions in this area, I would love to have a further conversation with them. I'd love to walk through what their strategy is and share with them how we can help enable that strategy and how we're, we're, we're working really hard to see around corners, see around, you know, what's coming down the road that we all need to be embracing, and we'd love to do it with them.
At Jack Henry we're here to serve you with people inspired technology so you can strengthen the connections between your credit union and the members you proudly serve. We're committed to supporting your efforts of service and putting your members and communities first.
For resources about our technology modernization efforts, visit jackhenry.com