Anne Legg:
Everybody who's in a leadership role or who's in that discipline is because they're the expert in that discipline as they should be. We're not going to hire people, we're not going to have people who aren't going to be the expert in that. That's great. What we have to remember is each discipline is a data steward.
James Robert Lay:
Greetings and hello. I am James Robert Lay and welcome to episode 246 of the Banking on Digital Growth Podcast. Today's episode is part of the Exponential Insight Series and I'm excited to welcome back Anne Legg to the show. Anne is the founder of Thrive Strategic Services and author of the book, Big Data/Big Climb, which is a must have guide for financial brands who are looking to approve their account holders' lives using data, which is exactly what Anne and I are going to discuss to empower you, the dear listener, to maximize your financial brand's or fintech's future digital growth potential through data strategy. Welcome back to the show, Anne. It is so good to share time with you again.
Anne Legg:
Oh, no, thank you for having me. I absolutely enjoy our conversations and it's just, I have to say the best part about this podcast is I walk away totally learning something, which is so much fun.
James Robert Lay:
I mean learning, education, that is the core ethos of what we are doing. It's what you are doing around the data side. And before we talk about the opportunities for financial brands to maximize their digital growth potential through data, what's been good for you? Personally? Professionally? It's your pick, what's positive right now?
Anne Legg:
Oh my gosh. A couple things. From the work side of the world, it's been so much fun because a couple years ago we put out this pretty big audacious goal that said, "Look, we want to educate the credit union space on how to leverage their data to improve their members." And everybody's like, "That's really big." Well here we are and there's been a couple really cool proof points. Number one, we've had over 240 students. We've added this cool program where you actually get continued professional education credits, we've issued over 1,700. Okay? What I love are the data use cases, right? Things around the statements of what am I trying to do, what am I trying to leverage my data for? Here's a great one, members are equipped to live and give more abundantly. Who's not in on that?
So there's this beautiful traction that's happening in education and super excited for next year to be able to offer it in kind of an academic setting to be able to say like, "Look, I'm just going to pick the class that works for me as opposed to the way the structure is right now." So that piece has been incredible. And then the second piece around that is, hey, if I have this foundational understanding of what I need to do with my data, what happens next? Well, hey, let's deep dive on strategy. And not just the strategy of your tool, the strategy of the credit union. You're going to be going through some really crazy, it's not rocket science to say that the next couple months and the next year are going to be exciting. This is where your data is really going to be powerful for you, incredibly powerful for you. So let's make sure we have it as that foundation.
And then on top of it, if I've got that, let me understand the member friction. So what is that friction the member has doing business with us, what's the data I need to solve it? Let me wrap that in. And then that kind of brings us to this next phase of, well, if I've got a foundation, I've got my understanding of what I'm trying to solve for, hey, I've got to get my people excited. So we have this 10x your MX experience. And I got to tell you, this is what's so exciting. You're working with a credit union and literally they say, "What is our biggest friction?" And it comes down to, look, we make members sign for too many things. Yeah, that is exactly what you need to focus on because when you articulate it like that, then everybody understands.
Because friction really has three spots; product, process, and people. When it's suddenly you sign for too many things, if you can get your organization, your credit union to sign for just one less thing, that's huge. So it's been so much fun this year to see all of these things together. And then the two cherries, honestly the two cherries on this gorgeous cake have been number one, the book that I wrote to do this. As I said, building out all these years of experience and work with credit unions, what you need to know is now in the Industries Museum, which is the America's Credit Union Museum, it's now in their Ensweiler Research Library. Who does that? I'm sorry, we just got [inaudible 00:05:09] like, what's a book, it's used as a textbook and it's now sitting in your Industries, that's just a pinch me moment. Which then the second piece is Thrive, the company is a Luminary Award finalist and the Luminary Awards is via the Credit Union Times and they're really coming together to highlight both individuals and organizations that are truly changing the industry. So, gosh.
James Robert Lay:
It has been a banner year for you, and I'm so excited. I am so happy. Congratulations on all of the growth and the progress that you've experienced individually, personally, professionally, your team, your organization. I want to come back to a couple points that you were making about strategy versus tools. And I want to lean into the side of strategy because I think tools are secondary. They should be secondary to strategy. Tools should be there to support and bring the strategy to life. And when it comes to maximizing digital growth through data, it all starts with vision. Strategy begins with the vision. It is a future state. We need to create the future in our mind to bring it into the present moment. As ancient wisdom teaches us, without vision, the people begin to perish. So on that note of vision, I want to start by giving the dear listener some clarity around, what does a straightforward data vision and strategy look like around data to begin with?
Anne Legg:
Absolutely. So, what a great position point. Okay, so let's just think about this again from who is our ultimate end user? It's going to be your customer or your member. That is, no matter what you do in your industry, that is the person you do it for, right? So when you think about, and let's just say stick with credit unions, you think about that member, well what the heck are we trying to do for that member? And as I said earlier, how about something like, gosh, I want members to have frictionless access to education and resources. Yeah, that's what I want. That's what they want. That's what we all want. Credit unions, financial institutions are all in this really amazing powerful position to help the financial life of their end user, customer or member.
To do that, to go out there and do that, I have got to have a strategy and it has to be a strategy that is focused on my end user, not necessarily on the institution. We have tons of beautiful, gorgeous details that help us here, but when I think about that end user, and I'm developing for the end user, and what's fun about this is we're really talking about technology here. That's a technology play. I play and I build for the end user. That's exactly what we're looking at here from data strategy. So I'm building for that beautiful member, that customer.
Then I think about what I need from my people. What do I have right now? I need to assess what I'm doing. I need to understand, what can I possibly do that will help me get to that? And in there isn't necessarily just going to be a tool. There is two things around there. There's going to be understanding your current landscape, your people, your processes, your products, and figuring out what you can do right now to help accomplish that. In most cases, when you think about that end state, you're thinking about that member friction, right? The friction, your member's going to have a friction doing something with you at some point. When I think about that, that becomes my micro use case to that bigger one.
James Robert Lay:
When you think about strategy in what you're seeing presently today, where might there be gaps in data strategy? What are financial brands missing, not thinking about, they don't have awareness, they don't have clarity, and it's those blind spots in their strategy? Or perhaps it's just a lack of strategy altogether that is preventing them from maximizing digital growth through data. What is it that they don't know that's hurting the most?
Anne Legg:
Well, let's just start off with my favorite statistic, which is what percentage of all financial institutions actually have a data strategy. It's only 30%. Okay. So it's the lack, but within that lack specifically, it is around understanding what you're trying to use your data to solve for. Those are called those use cases, all right? In our language, in the credit union business language, it's going to be, hey, what's my business case? Or actually, let's articulate real tightly on this, what's my member's problem? Your member actually has just four problems that they want the credit union to solve. They have a shelter problem, a transportation problem, a travel and play problem, and a rainy day and retirement problem. Ideally not all of those at the same time. What is the friction that the member has getting that problem solved? That use case piece in there, that's really big.
The second piece on that is if you've got use case, then you're going to need to be thinking about data governance. And I know there's probably a lot of people who are like, that is the least [inaudible 00:10:37] attractive thing you could have ever said. Data governance, I want all of you financial institution people to just anchor on me for a minute here, data governance, just move out the word, you're currently doing it, it's called loan governance. You have to know the quality of where you're pulling information so that you've got quality reports. It is that simple, but you are willing, you going to be regulated on it if you aren't already. So please, please, if you understand what you're going to do with your data, let's throw some governance in there to make sure it's quality. And then that final piece where we see a lot of organizations really struggle is around building up the talent capability.
Hey, if I understand this is my member's friction and I'm being able to build out, so I've got my use case, I've got my governance to understand how quality is, my people have to, it is not going to be magical. You are not going to build it and say, "Here's this amazing dashboard, go build." That is not going to happen. People have to understand, hey, how does my piece fit into that? It's going to be information that they need. What information do they need to solve that member friction? That, my friends, is all gorgeous data. So wrap that whole thing with a little bit of translation, but it most importantly is you have to have a strategy that is going to be end user focused and let's just say member focused to solve their problems and being able to then build up talent capability to help you solve those.
James Robert Lay:
So, summarizing all of that, a lack of clarity into what are the major pain points that we're solving or curing those problems around lack of quality of data, data governance, and once again, I think though that word data governance can put a lot of people to sleep. But I mean maybe a way to think about this is like front stage and backstage. Your front stage can only be as good as your backstage and the backstage is the data governance piece. Garbage in, garbage out.
Anne Legg:
If you don't have people, and let's just think about a stage for a minute, you've got all these stage hands are pulling up and down curtains and sets and-
James Robert Lay:
Lights.
Anne Legg:
Lights and audio. If any one of them drop the ball and don't do what they're supposed to do, that performance suffers.
James Robert Lay:
Yes, it does.
Anne Legg:
So that's exactly a beautiful way of looking at it.
James Robert Lay:
And then I'll call it lack of capability and probably closely tied to that, which you mentioned talent.
Anne Legg:
Right.
James Robert Lay:
Maybe technology, but I think technology is secondary to talent, because what good is technology if the talent doesn't know how to utilize the capability to its fullest extent? And then closely related to the capability is capacity, creating that space to create the future to get out of what we're doing in the present moment. It's like, what are we going to have to stop or give up or elevate or bring in capability to begin to move the ship forward? Otherwise, we remain anchored in the present moment. And I think, you mentioned something too; time. How long should a financial brand be thinking when it comes to defining and clarifying their data strategy to maximize their digital growth? Because back to your point, 70% of financial brands do not have a defined data strategy. How long to realize the benefits? Is it three months, one year, three years, five years? Because I think context here is very important when thinking about bringing the future into the present moment.
Anne Legg:
So let's kind of unpack data strategy for a minute. First of all, data strategy is going to be very dynamic because it's going to depend on how well you can access your data. So with that, knowing that, on average you are going to build a data strategy that's going to be around five years. And I know as everybody just gasped because they're like, "Whoa, we only think about things in the next 90 days." Let me be clear about what you see in the five years. Again, at the end of that five years, you've got that roadmap, right? I want to have members equipped to live and give more abundantly.
When we back into that, at some point we are going to bring in data, whether it's into a tool or some component, we have to integrate data. That will take you 18 to 24 months. So we've got two years possibly in there. Again because you're going to be testing, checking, governing, all goodness. So when we go to the very beginning, current state right now, what can I do before I get to having to integrate data? What are those pieces, as we talked about earlier, what are those small incremental steps? We were talking about, hey, I'm working with a credit union right now and I love this, they're focusing on, we need to make our members sign less. That is a data strategy, that is actually a data tactic, that is a use case. How do we get our members to sign less? You do not need to buy right now any sort of tool, anything. You could do that and start solving that in 60 to 90 days. Just that one action of getting the member to sign less will improve overall member experience and give you insights.
James Robert Lay:
Well, let's talk about pain points here. I think the more that we can give the dear listener things to think about and take back to their financial brand for consideration, the more well off they will be to help people solve common people problems causing common people pain, as I like to frame this. And before we hit record, you mentioned two pain points that I think are going to hurt even more going into next year when we're thinking about the state of the economy, and they both start with the letter G; gas and groceries. Talk to me about this and why the pain point and what can financial brands do, low-hanging fruit here, to provide some maybe relief and guidance in these two areas?
Anne Legg:
Yeah, absolutely. So when we think about economic impact, when we think about any sort of things where rates lever, any of the levers that happen in our world, what happens is you're going to have to either pay less or you pay more. And if you're looking to very quickly understand what your member's current feeling is or impact is, look at gas and groceries because that will tell you right now, and let's just be clear about this, right? Let's just say I can pull that information relatively easy, there's an ACH report, but let's just say I look and I realize that you know what? A year ago, I had members or users who were pulling gas and groceries and gas was coming from Costco, groceries were coming from Whole Foods.
I might also have a group of people where gas and groceries actually come from the same place and it might be 7-Eleven. This is going to tell me so much about where they sit in their financial condition. So I'm going to be able to understand some pain points. I'm going to be able to see change pattern. From there though, what can you do? There's going to be some areas that you're going to be able to do some quick things. But what about understanding the financial education? Do you need to be sitting here? How do we do budgeting? How do we give you loan or deposit or whichever tool we have that is going to help you walk through this and navigate this?
James Robert Lay:
This would be a fascinating study to look at where people are pumping their gas and where people are buying their groceries from and then provide them with guidance. And maybe what we can frame this up around is providing people guidance through gas and groceries.
Anne Legg:
I like food and fuel. Those are my two apps.
James Robert Lay:
Yeah, food and fuel. I mean it's a fantastic framing as well. And I'm curious to know though, how many financial brands have taken the time to run these numbers? Because it's right there. A lot of this transactional data is right there and a lot of it's going to be on a card most likely, whether it be debit or credit. Cash is obviously going to be near impossible to try to identify. But then you could also maybe make a hypothesis around like ATM, where are those ATM transactions coming from?
Anne Legg:
The sources you're going to pull from are going to be even transactional, like you said, debit and credit, but you're also going to have payments as well. The payments ebb and flow. So you're going to see a lot of pieces around there that will give you enough to be heuristic. And if you're heuristic then you can start going back and validating and refuting.
James Robert Lay:
Well see this gets into a deeper lens of something that I've been having some conversations with financial brands around what I have framed as digital anthropology because you're almost studying the patterns of people and how they buy, how they spend, how they live, how they drive. Back to those four problems that financial brands can solve for, speaking about solving problems, you mentioned people capability internally and I'm finding more and more that there's a massive need for cultural transformation, maybe even deeper than that, human transformation for financial brands to maximize their digital growth potential through data. So when it comes to data strategy, what are some benchmarks? How can a financial brand benchmark their current state of what you call their data culture? What should we be aware of? What should we be looking for here?
Anne Legg:
So it's going to be no surprise, but when you're thinking about your data culture, you're going to be thinking about, how does your current credit union staff consume data at this point, right? So consumption. And consumption's going to look in high level and what's interesting about this, when you start looking at consumption, it's going to then remind you that you're completely looking internally the entire time. You're looking at your board reports, all of the key KPIs, you're looking at operations, you're looking at everything that says today backwards or descriptive data.
It's interesting because when we think about it from that lens, it's like, wow, I can't go forward because I can't see where I'm going. So we have the descriptive data, which helps us understand consumption. The other piece around this is if you're really trying to understand, how does your credit union, their data capability and the readiness from the culture perspective, how are you at innovation? Is it formalized? Is it informalized? Data will give you insights that you will be able to take action. That action has to come in creative problem solving, critical thinking, and that obviously lends this to an innovation.
So if you had to just say, "All right, what's our consumption? What is it that we're looking at and what do we look at? Are we looking at a forward lens or a backward lens or a current state lens? And then number two, how do we innovate?" And in that innovation piece, are we critical thinking? Are we in a growth mindset? I mean literally in a growth mindset. I'm not saying we just have a growth mindset, but we actually activate and we actually really succeed and we encourage those who do fail because those are learning opportunities. Those are some really good points.
James Robert Lay:
Growth mindset requires looking at the lens, and we were talking about Peter Diamandis's book, Abundance, but you really have to look at the world through a lens of abundance. You need to be continuously learning, gaining new perspective. Like I said, you've trained what? 200+ people now to provide them with clarity around data strategy. When you think about what they're learning and what you're hearing from those who have learned and compare that to conversations that you maybe have had with others, how much are you seeing, maybe it's a lack of knowledge or more deeply a lack of just, we'll call it understanding that prevents financial brands from maximizing digital growth through data strategy? Because it's what you don't know many people fear. It's fear of the unknown is probably one of the greatest fears when it comes to cultural transformation and cultural change here.
Anne Legg:
What I hear most often is around, we need to be thinking holistically about the member. And let me kind of click down on that. Holistically, I realize now that data isn't just a report, it's an enterprise tool. Data is an enterprise resource, just like loans are an enterprise resource. And now I need to be thinking about not the data per se, but what's the information that I need to improve the member or to remove their friction. What's that information? Because that's data.
James Robert Lay:
I'm going to give some perspective here from a recent conversation that I was having with a marketing team, and they were having some conflict with their IT team who, and I don't like to use this word because this is how silos get built, but these were their words, well IT owns the data. That creates cultural conflict. And I said, "Well, let's look at this through a digital anthropological lens. IT is most likely looking at data as ones and zeros, as numbers, as reports. Marketing though is thinking, there are real people behind these data points that we can provide help and guidance." What are the opportunities you see to begin to eliminate some of that internal conflict around "ownership"? Because I see this as a major roadblock that will prevent an organization from maximizing digital growth through data strategy that you're helping them with.
Anne Legg:
So here's the thing we all have to anchor on. Number one, when we think about the disciplines, and sometimes people say departments, we think about the disciplines that go into a credit union, you have technology, marketing, operations, finance, leadership, all these disciplines. Everybody who's in a leadership role or who's in that discipline is because they're the expert in that discipline, as they should be. We're not going to hire people, we're not going to have people who aren't going to be the expert in that. That's great.
What we have to remember is each discipline is a data steward. So we all have pieces that all help us work together. And that data stewardship, all of those disciplines have one purpose and that, in the credit union space, is to serve the member. Whether you're front stage or backstage, you are all doing that. That is your common language. So why don't we talk about the member's language and not who owns the data, but how do we, from our superhero, from our gorgeousness, our expertise come together to bring our part into it to solve the member friction? That is a holistic approach.
James Robert Lay:
I like how you deconstructed departments in one word and called them disciplines. They are. And I like the framing on being a data steward because being a steward, you are responsible, stewardship and guideship I think go hand in hand together. So this is a really important point that the dear listener can take back who might be experiencing some of this friction and frustration. I think another area as we look ahead towards the future, particularly when there's some economic turmoil on the horizon, this is important, but we don't have the budget to allocate to gaining clarity, to gaining knowledge, to learning, to really understand, and let's roll this back, 70% of financial brands do not have a data strategy. Therefore, what would you say to someone, "This is important, Anne, but I don't have the budget for this next year?"
Anne Legg:
Absolutely, absolutely. It's funny because we're obviously in budgeting season right now, so there's a lot of conversations around this and what I want credit unions and financial brands to think about is, what is the cost of no action? The cost of standing still? There is a defined cost. Many, many organizations don't consider that because they're like, "Well, it's just staying the status quo." Actually it's not. If you stay the status quo, you are missing opportunity. You are losing space. You are losing the ability to do if you had something to move forward.
So it's actually not status quo, it is going backwards, it is reducing momentum. So the cost of standing still is exceptionally important because you now are looking at it from, well, if I had spent this, where could I go, right? Now you're saying, "Oh, well if I don't spend it, that doesn't worry about it." Oh, you have missed an incredible opportunity and who's going to crawl into that opportunity? That's the other cost. So it's not even just that you're reciting, but who else is going to jump into your space that you haven't... Now, let's be clear about this, there are certain things that you may say, "I don't think I can do all this, but what can I do to continue momentum?" What is that? And I love to pull a little beautiful page from technology. What is my minimal viable product to maintain momentum? My MVP?
James Robert Lay:
I think that, maintaining momentum, because momentum over time means you're moving the ball forward.
Anne Legg:
Velocity.
James Robert Lay:
You're going down field, using a football analogy here, and you're converting. I mean you don't win football games in the Super Bowl, you don't win World Series by a bunch of grand slams. You win World Series by getting a hit, yeah, getting a hit, you get someone on base. You win Super Bowls, one first down at a time. And I think when you start to break large initiatives like data strategy up into these smaller, we just need to convert on a first down.
Anne Legg:
100%.
James Robert Lay:
and-
Anne Legg:
Or we just need to get the ball back.
James Robert Lay:
Yeah. Yeah. I think that's a great point, we need to get the ball back because we need to stop playing defense. You don't score on defense. You score when you take an offensive and an initiating stance. Now granted, you could get an interception and run the ball down the field, but we're not going to get into the football strategy. But you're right, we have to get the ball back and begin moving down the field, not as an individual, not as a team, but really as an organization with all these different disciplines being data stewards. As you look ahead towards the future, Anne, what's one thing that you're feeling most hopeful and excited about around data strategy?
Anne Legg:
Oh my gosh. Many of the credit unions that we're working with realizing the importance of financial education. And let's be clear about that, right? I'm a member and in the financial world, we live and breathe, we understand rates, we understand terms, we understand conditions, we understand regulation to a certain level. We get this. We have to remember that the rest of the world is walking around and going, "Do I have money for a coffee or a beer?" So when we think about that, to be able to have the money for the coffee or the beer, I'm not even doing gas and groceries, I'm going primary level here, then I need to understand how my money works
And I don't need to understand it at a [inaudible 00:31:33] level, I don't need a spreadsheet. I need to understand that money comes in and money goes out and I need to have some allocated for those expense that's happened overall, basic budgeting, financial education. What I am absolutely just over the moon about is how many credit unions are figuring out and working on how to fold in these pieces, because that's what they're doing. They're having these great conversations, whether it is in deposits or in loans, but how do I bring that in? Because if I can educate my member on how to understand and how to use their money better, A, I've done my job, and B, their life will get better. And it may be incrementally, maybe it is literally saying, "We found $5 a week." That's $5 more than they ever had and that $5 adds up to $20 and keeps going.
James Robert Lay:
And that's where I think, to complement the financial education, building, I'll use your word, a discipline and a culture of coaching. Because people, they might think that they're doing this alone, that they're struggling alone, and regardless of if that coaching is in a one-on-one context or in some type of a cohort, a peer group, you see this in other areas like the fitness vertical. You and I have both run marathons. I had accountability partners running, it wasn't me doing it by myself. There's a community around running a marathon. There is a community around Peloton. There's a community around F-45. There's a community around CrossFit. And it's that idea of community, we have a common bond, credit unions particularly, but community, even community banks, unity, we can unify people to learn, to grow together, and just simply provide a place for facilitation of dialogue, discussion, discourse, Socratic methodology. I'm really big into that, writing Banking On Change right now, thinking about ancient Greece and data becomes a big part of that narrative.
Anne Legg:
Because it allows you to, as you think about the Socratic method, I have a hypothesis. My first point is I need to validate a refute, that's information, that is data. I think that, wow, these members over here are going into my special loan committee because they don't have, let's just say they don't have a great credit score. Why do they not have a great credit score? What's in there that you can help them solve? And if you solve that one, you know there's going to be many other ones. That's going to help you along the way. And that goes within the overall mission of what you're supposed to do. And honestly, when it comes to community and common bond, the seventh cooperative principle is concern for community. I mean it's like, dude, it is in your principles. It's in your founding principles.
James Robert Lay:
This has been another great conversation with you, Anne. A lot of practical takeaways that the dear listener can go back and think further about, thinking about Socrates. It was Socrates who once said, "I can't teach anyone anything. I can only make them think." And it's my hope through conversations, through dialogue, discourse, discussions like this one, Anne, that we're making them think.
And let's wrap up here. Let's get real practical. What is one small next best step? Because all transformation that leads to future growth begins with a small simple step forward. What's one small thing that you would recommend the dear listener to do next as they look ahead to maximize their digital growth potential through data strategy?
Anne Legg:
I would like for them to ask one simple question. Ask it of your leadership team, ask it of your departments, and ask it of your frontline, what is the friction the member has doing business with us?
James Robert Lay:
Can I build on that for you? Have everyone write them down individually, top 10 list, have each person then circle their number one.
Anne Legg:
May I add to your thought on that?
James Robert Lay:
Absolutely.
Anne Legg:
Because what I'd love for you to do is, if you can understand that, compare, what does leadership say is the number one friction? What does your departments, what does your frontline? But most importantly, if you are now going to solve that friction, if you look at that list, let's say you have five on there, right? Leadership [inaudible 00:36:14] all the different organizations, you have to solve it using this criteria, what's going to have the most impact to the member with what you have currently? You can't buy more people, you can't buy any more tools, you can't buy any more time. What can you, as you look at that friction, if you solve it, it will have the widest impact on the member and you have feasibility to do that?
James Robert Lay:
Because that creates momentum. That creates early momentum. There you go.
Anne Legg:
Just a quick win, guys. You got this. You got this. You absolutely got this.
James Robert Lay:
Super practical. Anne, thanks so much for another fantastic conversation. What is the best way for someone to reach out to you, say hello, and continue the dialogue, discussion that we started here today?
Anne Legg:
Absolutely. Easy way to really get ahold of me is to visit the website, which is anneleggthrive. And that is A-N-N-E-L-E-G-G thrive.com. But also hit me up on LinkedIn. You'll find me, of course, at Anne Legg on LinkedIn as well as Anne Thrive on Twitter. So feel free, any of those. You will absolutely be able to get ahold of me and learn a whole heck a lot more around all the stuff we talked about.
James Robert Lay:
Connect with Anne, learn with Anne, grow with Anne. Anne, thanks so much for joining me for another episode of Banking on Digital Growth.
Anne Legg:
Thank you so much for having me.
James Robert Lay:
As always, and until next time, be well, do good, and make your bed.
