Digital Federal Credit Union is partnering with a homegrown fintech on a next-generation digital banking solution.
The solution combines behavioral insights and predictive analysis with the goal of changing members’ lives in big ways.
CU QUICK FACTS
HQ: Marlborough, MA
Data as of 12.31.19
12-MO SHARE GROWTH: 12.0%
12-MO LOAN GROWTH: 1.5%
When Digital Federal Credit Union ($9.3B, Marlborough, MA) launches a new online and mobile app in 2020, it hopes the upgraded, expanded tools will substantively impact the member experience, says Sean McNair, vice president of marketing at DCU.
“We want to help credit union members feel more confident about their money,” McNair says. “And, we hope that confidence translates into better money management.”
McNair is confident the improved digital banking solution will change members’ financial lives. And he’s confident because, well, the credit union built it.
The Project? Finance .
DCU launched its Boston-based FinTech Innovation Center in 2014 to provide a physical space where national startups could work, rent free and equity free, and connect with local business executives.
Some 60 companies have since graduated from the incubator, including Project Finance, a digital banking service that uses predictive forecasting to uncover insights and determine steps that are most advantageous to a user’s financial health and wellness . Early on, DCU recognized the value in Project Finance and was ready to invest in the company by the time it graduated from the incubator . The credit union is now a stakeholder in the CUSO as well as its first client.
There are many solutions out there today that tell you what your money did. We want to make our members feel confident about their money by showing them what their money can do.
For the credit union, getting in on the ground floor was an advantage. DCU is a large, complex financial institution with nearly 900,000 members. Finding a customizable and controllable solution allowed it to implement functionality tailored to member need.
“We were able to design specifically for DCU members,” McNair says.
Addition, DCU saw value in what Project Finance was bringing to the table. For example, knowing people tend to think of their finances holistically, the company’s solution allows members to link various financial accounts in one central hub.
“You don’t just think of your checking account, your American Express credit card, your Bank of America mortgage, your Navy Fed auto loan,” McNair says. “You think of them in the aggregate.”
So, Project Finance will allow DCU members to see all their financial accounts in one place, but the insights run deeper than balances and transactions . Members will be able to compare their current interest rates against DCU’s own products as well as glean predictive insights and guidance on their money management based on historical spending and savings. For example, the solution can determine a member will overdraft in three days based on past habits. DCU can then provide advanced notice to ensure the member doesn’t incur unnecessary expenses.
Ultimately, DCU hopes such insights will help members tweak their spending and savings behaviors and develop financial confidence. According to McNair, it’s the small questions with which members often struggle: Can they afford a Saturday night out? Can they afford a weekend getaway in three months? Managing these small moments have a large effect on a member’s financial anxiety or confidence. That’s what Project Finance is designed to answer.
“There are many solutions out there today that tell you what your money did,” McNair says. “We want to make our members feel confident about their money by showing them what their money can do.”
DCU’s new online and mobile application will help members track their spending and savings habits as well as see future account balances based on present spending and saving activity.
Changing Members’ Finances In Grandiose Ways
DCU has not yet announced the date of its conversion to Project Finance but is working diligently to prepare for it.
Putting forth a holistic financial picture and adding predictive insights to its digital banking experience is a selling point, but the credit union’s current digital banking has valuable elements, too, that DCU doesn’t want to lose.
Sean McNair, Vice President of Marketing, Digital FCU
For example, DCU currently offers a rounding tool that allows members to round up the difference from debit card transactions to the nearest dollar and deposit that change into a savings account. Additionally, DCU’s current digital banking experience has a feature that allows members to save for a specific, defined purpose. The credit union wants to transfer both features into its new solution and is working with Project Finance to implement these outside requests.
“We’re working through how we can better structure those features to tie into the current system of predictive insights in a way that remains streamlined,” McNair says.
The member experience is important, too, and it’s an aspect of the conversion DCU is focused on getting right. The first impression is critical, and after a recent spate of high-profile app launch failures, McNair wants to take the time to get the rollout right.
“We are trying to perfect this experience,” the VP says. “When a member logs in for the first time, they are welcomed and walked through the new experiences to get them excited to have these resources.”
Post-launch, the work will continue. The credit union is prepared to address questions and pain points in the member experience and will track the tools members use and avoid. It will also track financial wellness behavioral insights as they arise.
DCU wants to introduce and maintain a best-in-class digital banking experience, and it has big goals for Project Finance.
“We are hoping it will change our members’ lives in grandiose ways,” McNair says.
Want more credit union strategies? Sign up for the CreditUnions.com free newsletter.