Samantha Paxson:
We never had a time in history or at least in our lifetimes where we've really been able to just stop and be able to assess what are we doing?
James Robert Lay:
Welcome to the show, Sam.
Samantha Paxson:
Thank you. Good to be here.
James Robert Lay:
Well, when you and I talked to frame up some thinking around this conversation, the world was a very different place. A lot has transpired over the past few weeks. And you've been busy leading your team, leading your organization, but what is good? What is good right now for you as you've worked through this new normal that we're all trying to pick through together?
Samantha Paxson:
I think there's a lot of good things. I mean, I read an article in Medium the other day, describing this time as the great pause. And if you haven't read the article, it's really good, help the great pause. And basically when it saying is that we never had a time, in history or at least in our lifetimes, where we've really been able to just stop and be able to assess what are we doing? How can we be doing it better? As we've been going through Maslow's hierarchy of needs the air, water, food, view of the world where we've been fighting fires, all of this change that's happening in our personal lives and our business.
James Robert Lay:
So you mentioned the great pause and you're right. We have not been able to really create this space and time. This has been almost a forcing function into our work life, into our personal life, our family life, but it's literally one of the four digital growth operating environments that I work with financial brands around. Because there's the training aspect, the learning aspect, which you have a big conference that's right around the corner. You have the thinking aspect, the planning aspect and as you noted in our pre-interview, this is like strategic planning in a week. Then you have the doing aspect of everything, but I find a lot of people get stuck in the doing of whatever it is that we're working on. So it is nice to get this space in time, this great pause as you noted because it is from there, we can move into the fourth environment, which is to review and reflect, learn something and just apply this thinking going forward.
James Robert Lay:
So as you've shifted internally, you mentioned here two things that are important, the employee experience and the service or the customer experience, how has that thinking shifted for you in this post COVID-19 world?
Samantha Paxson:
It's been tremendous to play this out. We really had to put on our mask before assisting others and really looking at our employees because we have this distributed workforce. Each location had a different set of rules. We did have also essential employees that in our contact center that have to be on the front lines, really assisting our member credit unions. So what their experience was going to be was going to be different than our marketing team or our finance team or our sales teams that are sitting at home. So we really had to take within a week and a half we moved everyone remote, had to get all of the infrastructure stabilized, had to really make sure our frontline staff were well taken care of. And we just felt as a leadership team, tremendous responsibility to take care of the humans that could be medically impacted by this pandemic. And so that was first and foremost in our minds and took up a good two, three weeks for us to really get make sure that we managed that the right way.
Samantha Paxson:
And as we were pivoting, I mean, of course we were doing that while keeping service levels as solid as possible during all of that transition, keeping up times as solid as possible. What we realized was that while the work that we've been doing over the past few years has really paid off because Co-op and our board has driven us to really invest aggressively in our organization to be a platform business, to be able to be agile and responsive, regardless of what comes at you. And mostly that was done in order for us to bring in new service sets, new solutions, new things that would be appropriate in a growth environment, but also works in a risk environment. So first we took care of our employees and what that did is that it really gave us a culture lift, the employees, we ramped up communications dramatically. We put out daily, we have something called the cops snapshot, and that was typically weekly, we now made it daily so that employees would know what to expect.
Samantha Paxson:
And many of them that our schools were closing, we were just talking about, I'm now a homeschool teacher and a CXO. They have all of these new challenges and how do you make it all happen? So they were needing a lot of information, our CEO, Todd Clark, he is speaking with them weekly, via video conference. And what we found was that employees' gratitude was so high. It really helped them be thankful for Co-op and what we were able to do. And it made them hungry to be change agents and do what we need to do for our clients. And so us really focusing first on the employee experience was helping us be more innovative with the changes that were happening in the COVID environment to say, what should we do differently to best service our clients and their members?
James Robert Lay:
Hearing you talk through that, it gives me a lot of hope just for the sheer size of the organization and being able to be agile, make these pivots, leadership, I think plays a big role in that. And just to hear what Todd has been doing with communication, more importantly, video communication, to ensure that the human element is still in there, just like you and I are having this conversation. We had a little bit of technical difficulties, and I'm hoping that we will see this through, but the fact that I can see you just add so much more richness to everything going on. And communication, communicating courage, because just like this virus, courage is contagious and gratitude. I was just talking with Dr. Benjamin Hardy about this, the importance of gratitude starting the day, just, it puts your mindset in the right direction to rise above all the chaos, all the confusion, this crisis.
James Robert Lay:
And it's not to limit that but it's like you said, it's about putting your mask on. And I know it's the oxygen mask, not the surgical mask. So let's talk about, you've dealt with the employees and that's had a big impact about experience and experience is a big part of today's conversation and really the opportunities in a post COVID 19 world. So how would you define the customer experience or for credit unions, the member experience in today's digital world, really from your perspective as it stands and what are the opportunities to that matter going forward?
Samantha Paxson:
Yeah. So we're seeing it in pretty much four different ways. If you were to roll that all up, digital transformation has never been hotter. It's never been sexier. It is really important and essential. I know it is something that we've all spoken about for a few years now, but man, we are grateful and that our board pressed us to really invest in the infrastructure and the teams. And they had developers and doubled down on our distributed workforce and having talent available from everywhere and just getting the best talent. When you put all of those things together, having data scientists, really having that altogether, it helped us be able to shift like that. And so us being able to turn really quickly, even in the midst, when COVID was happening, we had just put in the biggest piece of technology, had to have the biggest tech upgrade in our contact center that we had ever had. And the teams were in the midst of doing that technology shift when COVID hit.
Samantha Paxson:
And then we had to move the teams that were in our Dallas location to another location, take some of those teams, make them remote, have dual site continuity with our Iowa location. So that went off without a hitch. We were able to do that with limited impact to our clients. And we ended up dealing with double the capacity of our call volumes and had service levels remain stable. So when we talk about digital transformation, it's crucial at a time like this and what we understand about consumer sentiment and behavior, they will give us all a break because they understand COVID they'll do that near term. But come the fall or as this draws on, they're going to expect that kind of response and that kind of service level, as they would expect from Google or any big tech company. And so the things that we need to be thoughtful about are digital first everything, we're a payments company, so we see our credit union clients, the most sophisticated are really looking at all of the ways that they digitally engage around the payment experience.
Samantha Paxson:
How they're making it transparent, how they're embedding themselves in digital merchants and putting together full rewards programs and marketing programs using Amazon and those types of merchants that are digital first. And then the credit unions that are just really dipping their toe in the water, they're just seeing a run on debit cards. They have members that are typically cash members that are now asking for debit cards that are enrolling in the pays. In Apple pay and Samsung pay Garmin pay all of these different types of, all of the digital pays. And then we're just really needing to reassess, what does that digital environment look like to do business remotely? Secondly, we're a no-touch world, so contact less is through the roof. Everybody is asking for contact less and they are experiencing that point of sale environment, either using a digital wallet or using their contact less card. So we're seeing a lot of skip the debt types of efforts and campaigns.
Samantha Paxson:
And of course, rounding out that financial wellness between both of those things in the payments' environment, near term, we saw a lot of skip of pays and really demonstrating that empathy for our member base. And then on the flip side, we need to really be thoughtful about remote service. How are your members doing business with you when you're not going to be seeing them in person? So what does that journey like within your credit union and how do they take advantage of your services? Whether it's spend, save, borrow, invest, protect, what do all of those use cases look like in a remote service environment? And then fraud, I mean, card not present fraud is starting to go up dramatically. So how are you making sure that your teams are managing that? So it's just really rethinking that employee experience and the member experience through their eyes. And it's leading with empathy and using, we talk about the operating system, having your operating system and your service model be digital first throughout all of those. And there's very simple things that you can do to just start that.
James Robert Lay:
Yeah. Hearing you talk through that digital transformation, digital first, digital payments and as to that last point, the idea around digital payments. Because what I'm seeing is it's almost a quad tsunami because we've had the health crisis, which is going to lead into the financial health crisis, which is going to lead into the societal crisis, which is all of those. Because job displacement, for example, 30% unemployment is a prediction going into 2021. That's going to then lead to the psychological or the mental crisis. So you talked about the financial wellbeing, because there's such a strong correlation between physical wellbeing, mental wellbeing, and really read at the bottom of that is financial wellbeing. And the longer that we stay in this situation, the more that consumer habits, consumer behaviors, almost like new neural networks are being formed in the consumer's mind of how they're buying, shopping, banking, paying. So there are vast amounts of opportunity. One of the things that I think it's important to be cognitive of when we talk about experience is, and you use the word empathy, it's the financial hardships and trust.
James Robert Lay:
Trust will become the credit union's most valuable currency. I've always talked about making deposits in a consumer's trust bank, being their mind. What can credit unions, what can financial brands do to make those deposits? Those trust deposits and the consumers trust.
Samantha Paxson:
There's a few things to think about with that. Trust can be defined as character and capability and character is definitely something that credit unions really on. I mean, we're known as being the good guys and doing the right thing. From a capability standpoint, you might not trust that a credit union can do all of the things that you would expect them to do or do what you seem to expect or the manner or the method in which you expect it. So what consumers end up doing is that they're financial nomads, they are digital nomads, pulling in their different use cases from different partners. I have a story, anybody that knows me, when I started working in Co-op, I was using a Blackberry that did three things. It made phone calls, I kept my calendar and I can send a really weird text message. I took forever on that keyboard. I now have an iPhone, a smartphone that has 111 different companies that I can carry around with me everywhere.
Samantha Paxson:
And typically, my day is traveling and so I need to be able to do business with all of those different providers, regardless of where I am. So what the end consumer has been doing in terms of trust is finding the quickest point from A to B and that whomever can execute a use case and this, the phone, the aggregated environment of the phone is the one that wins. The challenge there is that the end consumer doesn't have a good idea of how they're doing in their financial life when they have fragmented all of those use cases, they can't tell am I performing on my cashflow? How am I doing with my retirement? How am I doing and saving for my eight year olds college education? What does my insurance look like? And I think the opportunity for credit unions is to double down on the empathy and the trust that they have, that they're going to do what's best for their members, while they re aggregate financial services and truly behave as this ecosystem of engagement and financial wellness. And that's how you build trust that can turn into market share.
Samantha Paxson:
We are seeing transaction volumes down because people are not just not spending in a non-discretionary manner or a discretionary manner. They're putting everything into the base, the essentials, but we have a real opportunity to be there for our members and to demonstrate that empathy and what they can be doing from a financial wellness standpoint, over communicating with them, we will win the battle ground today, is on engagement and financial wellness. And when you put that together along, I still believe that payments as part of that engagement. When you put that all together, we're building that trust and we're growing market share. And you will also see loans pick up when you do that, you will see that correlation between that engagement and payments day to day lifestyle, and you being embedded in the day to day lifestyle of the member with those life stage, big ticket items that happen for credit unions depend on as their bread and butter.
James Robert Lay:
I really like that perspective. Trust is character and capability combined. And so when I look at experience through the lens of digital growth institute, it's really twofold. It's the digital experience or the DX, but that's only one side of the equation. It's also the human experience as we talked about before and using technology to bring people together for good. So here's a question. I'm an executive at a financial brand at a credit union. I get what you're saying, Sam, but I can't get everyone on board. And you said credit unions aren't really known for speed, but does COVID-19 as a forcing function, to force some of this digital transformation that's been in the conversations fear, what can I do to help bring others along so that we can move forward in a unified manner to implement some of this thinking and really build experiences that build trust, that generate leads, retain leads, and to use your word re aggregate, the credit union.
Samantha Paxson:
Funny, it feels overwhelming. I know for our credit unions, that feels really like a lot to look at the entire experience that they're delivering in all of their channels, in all of their use cases. How do I optimize this? What's the answer saying is that COVID-19 is forcing them to do it. They're having to look at their branch experience. How do we need to change this to make it safe for our members? We need to have numbers outside. If we're open, they would then have an appointment and then we get to come in and meet with one of our team members and member services representatives. We're doing this, we're transforming the experience already. We're looking at elevated call volumes, we're looking at greater uptick. And like I said, the payments vehicles and all of the ancillary services that go around those payments vehicles.
Samantha Paxson:
We're seeing an uptick in digital engagement, in digital banking and all your social channels, how you service those clients. So we are doing it. What I would recommend is that what we tend to do is we've looked internally, remember I said, look inside first. I would actually flip that for designing the experience for the member and against our use cases. If you look at the basic things that we do for our members, we help them save, spend, invest, borrow, and we keep their money safe. So those are the basic use cases of what we do at a credit union. And when you think about who those people are that you are providing those use cases to, credit unions tend to cast the widest net possible and say, we are everything to everyone. And that is a challenge, when we are community based financial institutions that have limited resources, limited staff, we don't have the capital investment to compete at the same level as big tech and FinTech and the top three banks in the country that are investing dramatically into these things.
Samantha Paxson:
So it is helpful to focus, there's a credit union or a borderline credit union that has a tremendous case study on how they really focused. And they said, we are going to focus on these really tech savvy, connected types of members and make tough choices about what are we going to cut? What are we going to say no to in order to enhance the experience for this member? So you have to get very focused on who your members are and what that experience is across those use cases. And you design, you get very clear in understanding those members and design from the point of view in. So practically the way that you do that, I do believe it's important to journey map. I do believe it's important to have a cross functional team within your credit union of many functional areas where we're really understanding what does that look like and collaborating on that.
Samantha Paxson:
And then you make choices on what are we willing to change? And I know a credit union that decided that they were going to cut their branches and cut their ATM footprint, participate in a network of ATMs so that they could invest in digital. There's many choices to make when you're saying, build, buy, or partner. But when you are clear about who your target member is and what they want and design or think about it from their perspective inward, you're going to be a lot more successful in prioritizing where you should be investing and understanding, creating metrics around, are you going to gain market share if you make those strategic bets? So start from the consumer and go in and don't have 72 different consumer types as your personas, you really have to focus.
James Robert Lay:
That right there, don't have 72 different personas. I can't tell you, when we go in and we do digital growth diagnostics and we see, and I've seen upwards of 90 different persona types. This is about simplifying the complexities and we have to start the simplification internally because otherwise the complexities then just spread out externally. And I liked what you said, this is about people putting people at the heart of all of our thinking and all of our doing, it's human centered design. But most importantly, it's having the courage to say, no, it's having the courage to let go of the past. And it's not personal, it's just what got us to where we're at today, won't get us to where we need to go tomorrow. So I'm finding courage is really required at a time like this. Sam it's been such a wonderful conversation.
Samantha Paxson:
Not as scary and not as hard, but it is exciting too. I think that we have to see it, we're very good at saying, oh, that won't work and that's not good. And people can show their value in saying why things are wrong. It's much harder to have a builder's mindset or mindset around this because people need us. These members need us, and they're getting annoyed by Chase, they are annoyed by Bank of America and really how they've handled COVID. So we are being served up this incredible opportunity right now, this is giving us the space as the credit union movement to say, we're an important part of the financial services fabric. And we can really help people right now. And look, we're here and we're going to show you how we're going to do it. And I think that's something we missed in 2008. We missed it.
James Robert Lay:
And that is the opportunity. And really it's been such a wonderful conversation, a lot of practical ideas for someone listening. I'm going to take your recommendation on focus. And I'd like to ask you one last question, let's shorten the curve, 12 months. What is your recommendation for a financial brand or credit union to focus in on, so that we don't have this list of 72 things that we need to do. But if you could maybe just say, you know what? It's not the end all be all, but it's just going to get you started and moving in the right direction.
Samantha Paxson:
I would say, you need to double down on how you're investing right now. So all of the shifts that you're making now keep going with them, throw the original budget out the window and the original strategic plan. It's important for us to be focused on a digital first environment, look and see the trends that you saw. What was member behavior like when you made these shifts? Can you be open to really measuring what just happened and saying, all right, let's keep going with this because the digital is going to go faster. It is what we're seeing from our competitors, really not even in the banking space, but in the big tech space. Apple got into financial services and payments, that is the day to day member engagement. And I think as credit unions, we look too much and at our lab metrics and our P&L to drive our strategic choices, that's looking backwards.
Samantha Paxson:
I think we have an opportunity to look forwards and to say, how are members behaving and where are our technology competitors coming in? And we need to make sure that we can be trusted from a capability standpoint. So as we've seen member behavior move to completely remote, to having everybody basically including my 87 year old, mother-in-law do her banking remotely and via a cell phone, we have to be digital first remote service and be available in a no touch environment. And I think that's going to help us speed up this idea of digital transformation and that flexibility on how we bring talent in and how they work, I think needs to continue.
James Robert Lay:
Very much so. So looking forward, building trust once again, through character and capability, digital first. Sam, if someone wants to continue the conversation that we started today, what's the best way for them to reach out to you and say, hello.
Samantha Paxson:
LinkedIn is always great. I'm Samantha Paxson on LinkedIn. And I'm also pretty active on Twitter as well. Sam Smyth Paxson on Twitter.
James Robert Lay:
Excellent. Sam, thanks again for joining me on another episode of Banking on Digital Growth.
Samantha Paxson:
Absolutely. Thank you, James Robert.
James Robert Lay:
Until next time, be well, do good and wash your hands.
