Patelco Credit Union – October 2019

MEMBER FINANCIAL JOURNEYS: FROM EMOTION TO IMPACT

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EMPOWERING MEMBER

Using collaboration to drive innovation

Measuring your members’ experience at every touchpoint is critical to building a better relationship with them.

CO-OP Financial Services surveyed more than 1,200 credit union members across 13 high-frequency touchpoints to understand how credit unions are performing across the entire journey.

Read our “Mapping the Member Journey” report to discover how to leverage this research to improve the member experience at your credit union.

Download the Report: visit.coop/memberjourneyresearch

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Patelco Credit Union: creating a culture of innovation

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PAT E L C O C R E D I T U N I O N

We speak to Kevin Landel, SVP of Innovation and Payments Strategy at Patelco Credit Union, to discuss how collaboration between business and technology teams is the key to creating a culture of innovation

A

not-for-profit organisation, Patelco Credit Union’s focus is on community. Started in 1939, it was originally the Pacific Telephone

Company’s credit union, where employees could collect deposits and fund loans. Rooted in that 04

cooperative nature, Patelco has grown to a US$7bn company with more than 350,000 members.

Landel says, “we truly believe we’re here to help our members”. Patelco has multiple community outreach and support programmes, from connections to the Children’s Miracle Network to its loan programme that offers an upfront 0% interest $500 cash loan to disaster-stricken customers.

Kevin Landel started at Patelco six years ago as Chief Information Officer. “At the time,” he says, “virtually all of our technology was home grown.”

While this has the upside of flexibility, it meant the company was spending most of its resources on support rather than strategic building. Landel shifted to a platform strategy, sourcing out Patelco’s technology. CU Direct took on its loan origination system; Alkami made its system for online banking.

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$7bn In assets

1939

Year founded

1,100

Approximate number of employees w w w.pa telco. org

PAT E L C O C R E D I T U N I O N

“ There’s no reason for us to reinvent the wheel, so we partner with providers that offer a great foundation that does all the basics but is an open platform that allows us to build strategically on top of it”

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— Kevin Landel, SVP of Innovation and Payments Strategy, Patelco Credit Union

Now, when Patelco wants to add a widget to simplify customer donations to its community outreach programmes, it can do so easily without having to develop the technology for an entire web platform. “I’m happy to say we are out of fix mode and into the build mode,” says Landel. His role has since shifted as Patelco brings on a new CTO, as well as marketing and credit analysists with strong data science backgrounds. Now, Landel focuses on developing other areas of innovation where the company can flourish: robotic process automation,

CLICK TO WATCH : ‘MEET PATELCO ONLINE’ 07 virtual agents, and bringing in AI for

asked a room of potential providers

data analysis.

if they were willing to update its mobile

“There’s typically this build or buy

site first and online site second. “It was

decision that technology leaders

an innovation in the industry, but it’s not

make,” Landel says, “and we take a

a big leap in technology,” says Landel.

middle ground. There’s no reason for

Because mobile users are more

us to reinvent the wheel, so we partner

flexible and accustomed to change,

with providers that offer a great

this strategy allowed Patelco to

foundation that does all the basics but

“concentrate on what’s important and

is an open platform that allows us to

limit the risk”. Patelco launched the

build strategically on top of it”. Patelco

new system without removing the old,

chooses providers based on their

incentivising customers to change over

“flexibility and willingness to work in an

with additional functionality rather than

unusual way.” When updating its online

forcing them. 85% of members

banking system, for instance, Patelco

switched systems of their own accord. w w w.pa telco. org

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“ The culture of innovation here starts at the top.

It falls into three areas: learning, doing, and refining” — Kevin Landel, SVP of Innovation and Payments Strategy, Patelco Credit Union

This, in conjunction with a virtual advisory team that asked for feedback from the mobile users, allowed Patelco to limit the usual dip in customer satisfaction when making the platform conversion and to come out of it in only three quarters. “It isn’t using unusual technology,” Landel says, “it’s just a different way of thinking.

“The culture of innovation here starts at the top. It falls into three areas: learning, doing, and refining,” he adds. From sending executives to the Credit Union Executive Society (CUES) Innovation Institute at MIT and Stanford, to putting

E XE CU T I VE PRO FI LE

Kevin Landel Kevin has held executive positions, been a principal in two startups, and as an alumnus of the MIT Media Lab and subsequently at the San Diego Supercomputer Center, Kevin has designed systems, taught courses, and consulted for many companies in the US and abroad, has been awarded a variety of grants and awards, and holds a patent for computer video display technology. Kevin is a sought-after voice in financial services technology and innovation, and has served on advisory boards for Fiserv, CO-OP, Alkami, CUISPA and others.

An avid surfer and outdoorsman, Kevin lives in Pleasanton with his family.

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PAT E L C O C R E D I T U N I O N

“ It was an innovation in the industry, but it’s not a big leap in technology” — Kevin Landel, SVP of Innovation and Payments Strategy, Patelco Credit Union

the full leadership team through the Harvard Business School online course 10

about disruptive strategy, Patelco ensures its heads of teams all speak the same language. “Filene Institute has an innovation immersion that we’ve done with our executives, and we had them come out to do a follow-up presentation with our whole team.”

One of the ways in which Patelco instils collaboration into its culture of innovation is through the use of the SAFe framework, a scaled AGILE system that “goes higher than just a team level with scrums and sprints.

It really works at the company and portfolio level.” According to Landel, “it allows us to understand what the dependencies and risks are in any

project that we’re working on.” During the planning sprint, business leaders and technology teams get together to discuss solutions to projects.

“It dramatically increases the transparency and flexibility of the teams by creating a higher level of collaboration between the business and technology teams,” says Landel. This has allowed Patelco to go from taking 90 days to roll out a product to going from ideation to rollout in three weeks.

Patelco leverages the collaborative aspect of credit unions. “We don’t have the budget like big banks,” says Landel, “but we do have the collective strength of credit unions working together.” Landel serves on several industry advisory boards and is active in credit union collaborative initiatives, including big data and financial health research initiatives with Callahan Credit Union Financial Services Limited Partnership, and as a member of the strategy council of CO-OP Financial Services, a credit unionowned service organization that provides payment card services, shared branching, contact center, and other services to Patelco and the CU industry. “We leverage the collaboraw w w.pa telco. org

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MEMBER FINANCIAL JOURNEYS: FROM EMOTION TO IMPACT

EMPOWERING MEMBER

PAY INTEGRATE ENGAGE PROTECT CONSULT

Measuring your members’ experience at every touchpoint is critical to building a better relationship with them.

CO-OP Financial Services surveyed more than 1,200 credit union members across 13 high-frequency touchpoints to understand how credit unions are performing across the entire journey.

Read our “Mapping the Member Journey” report to discover how to leverage this research to improve the member experience at your credit union.

Download the Report: visit.coop/memberjourneyresearch

©2019 CO-OP Financial Services

tive nature of credit unions to multiply our energy to provide the best tech we can for our members.”

Being located close to Silicon Valley, Patelco has access to all of the very latest technology and innovative ideas.

“There’s a real synergy,” says Landel.

“We have knowledge, data, and an understanding of our business that an entrepreneur may not, while an entrepreneur has the technology, skillsets, ideas, and capacities to build things that we may not. Considering this, it’s natural to get together and do a partnership.” This synergy gave Patelco an AI chatbot that it now uses

“ We have knowledge, data, understanding of our business that an entrepreneur may not while an entrepreneur has the technology, skillsets, ideas, and capacities to build things that might not.

It’s natural to get together and do a partnership” — Kevin Landel, SVP of Innovation and Payments Strategy, Patelco Credit Union

as the primary knowledge database for w w w.pa telco. org

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PAT E L C O C R E D I T U N I O N

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“ It isn’t using unusual technology, it’s just a different way of thinking” — Kevin Landel, SVP of Innovation and Payments Strategy, Patelco Credit Union

the entire organization. Actionable Science approached Patelco with background data machine learning technology; Patelco was looking for a way to help members understand its new credit cards. The pilot was so successful as an in-house training tool that Patelco “took it and expanded it across all knowledge areas […] our entrepreneur was able to take these learnings and develop products from them,” Landel notes. “We’ve launched a startup and we have a solution that’s meeting our needs.”

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In the next two to three years,

digital changes are underway, Patelco

Patelco will cross the $10bn threshold,

still strongly believes in its physical

a major milestone for US financial

branches, although these have been

groups that would trigger several

shifting from transactional locations to

compliance regulations. “Our work for

places of advice and financial health.

the next few years is to get prepared

True to Patelco’s core values, Landel

for that and cross the threshold with

concludes, “we strongly believe in

momentum. We’re growing at a

people helping people.”

tremendous rate,” explains Landel.

Patelco is looking at improving its payment system with AI, investing in a blockchain group exploring digital identity, and in a group focused on natural language processing. While w w w.pa telco. org

Patelco Credit Union P.O. Box 8020, Pleasanton CA, 94588 USA T 800.358.8228 www.patelco.org