Partners FCU Embarks on Digital Transformation Journey

Keeping up with exponential technological growth has never been more difficult for credit unions, especially when it comes to digital banking, member experience, and matching or beating the competition.

In an effort to keep pace with changing technology, the $1.65 billion, Burbank, Calif.-based Partners Federal Credit Union, which serves more than 150,000 Walt Disney Company cast members, employees and their families, embarked on a new digital transformation journey.

John Janclaes, president/CEO for Partners, explained the credit union’s “Digital 2x” initiative focuses on digital banking services and capabilities, as well as enhancement of its current app offerings (it should be noted that Partners already offers some pretty progressive tech features). Partners set an aggressive goal of accelerating the rollout of its enhancements from once every six months to once every other week, quadrupling its rollout speed.

Its strategic plan contains four components: Member experience, cast member enablement and engagement, safety and soundness, and accessibility to the right technology enablers. Partners partnered with the Austin, Texas-based digital apps company Kony and the Boston Consulting Group to completely overhaul its technologies, processes, systems and services.

“Our vision at Partners Federal Credit Union is to make all financial dreams come true for our cast members. To do so, our velocity of improvement must meet the speed of digital disruption,” Janclaes said. “Our objective is to ensure we deliver innovative banking services seamlessly across both our digital and physical channels, and not only meet but exceed the expectations of our cast members today and in the future.”

Recent member surveys revealed shifting expectations for digital banking services. While offerings such as person-to-person payments and robust budgeting tools are on Partners’ agenda, its pace of delivery was not meeting members’ needs. Janclaes noted, “The number one thing was access and convenience with a focus on technology.”

Partners also sought to provide services comparable to those offered by its big bank competitors, such as Bank of America, Wells Fargo and Chase. Partners observed what those rivals offer as far as mobile delivery and in-branch technology. “We could see they were speeding up and offering all these different touch points. We were falling behind,” Janclaes said.

Partners also polled its management team and staff for additional feedback about the credit union’s offerings. Ninety percent of them said their experience was good, but not good enough compared to the competition, Janclaes revealed. “We needed to do something different and if we want to have a different experience, we’re going to need to think differently about how we’re going about this. We needed to admit what we don’t know.”

The organization brought in the Boston Consulting Group in an effort to quickly move ahead with its digital overhaul.

Janclaes acknowledged his thinking about technology has evolved. “Five years ago, I sometimes thought of technology as a utility and so I didn’t get involved in decisions. Now it is a team decision. From a strategy standpoint we all need to be involved in these partnerships.”

The Partners CEO said the credit union looks for partners from technology companies to show up in these conversations too. “Gone are the days where we just focused on price and SLAs [service-level agreements]. Those for me now are guard rails to the relationship, but what’s right down the middle and the most important pieces are cross-functional teams working together with goals in mind.”

Jeffrey Kendall, SVP of banking at Kony, explained, “We really view ourselves as a member of the Partners team. The staff and the experts we bring to the table are really there to augment the strategy and be the technical enablers.”

Kendall emphasized Kony’s important role in assuring a successful strategic outcome for Partners. “We have a responsibility and accountability for that outcome as well. I think that is a joint vision.” He maintained Kony not only understands how to help Partners achieve strategic goals at scale and improve the member experience, but also how to teach credit unions to develop products faster and use automated tools to speed up release cycles.

Janclaes pointed out Kony showed Partners how to use some continuous testing tools, which reduced what used to take three days for automated testing to a couple of hours.

Partners just completed a pilot in January and February that highlighted what the credit union needed to do. “We’re doubling down on this strategy and investing in people, process and technology,” Janclaes added. Partners also visited Kony’s innovation labs in Austin to help chart what product features are available now and will be in the future to integrate into the credit union’s ecosystem.

“One key thing credit union members should expect is access to a broader set of services supported in digital channels – particularly opening new accounts, loan approvals and more relevant offers targeted to the individual,” Kendall said.

Another big deliverable for Partners was fostering an agile work environment to empower its teams to quickly adapt to change in all areas, including finance, risk management, audit training and shared services. “Everybody in the credit union needs to change. If we are going to deploy stuff faster and quicker, folks need training on the new services that are going out so we can explain and welcome members to them. This is a new way of operating, a new way of working to keep us relevant,” Janclaes stated.

For example, for the pilot program, Partners started presenting members with their FICO score on an ongoing basis. Therefore, all credit union staff members needed to learn how to explain the intricacies of FICO scores.

Kony provides Partners with a hosted cloud environment. “That’s an aspect of the technology piece that allows us to accelerate and lower the cost of operating in an agile environment,” Kendall said. “A lot of banks and credit unions are starting to become more comfortable with the idea of us hosting all their solutions, or at least parts of their solution, that need to change and evolve rapidly.”

Kendall explained one of Kony’s specialties revolves around a new category of tools in the market, low code, which removes some of the complexity traditionally involved when creating enterprise grade applications. As an example, Kendall mentioned a critical element that people want, but often leave out, when building a mobile application is reading analytics on consumers who interact with their institution’s app. “If you use a low code platform like Kony, a lot of the capturing and management of analytics in the application are already handled for the developer. The platform itself has those components and hooks already built-in out of the gate.” Kendall added the same holds true with its security framework.

Alongside the digital transformation journey, the credit union is also taking on a capital study. Janclaes noted, “If we are going to do more continuous planning, to speed up products and services going to our members, we need to do more continuous capital planning and be able to keep deploying, safely and soundly, more capital into more services of the credit union.”

Janclaes also explained that to have a total buy-in from all participants in the organization, the process must start with communication. “We keep all 400 of our employees and other stakeholders like our board and volunteers up to speed about what is going on.” He added there is another principle at play: “If you want to master something, master it as though you have to teach it.”

Janclaes concluded, “We really feel good about where we’re going … to achieve the things that we set out to do. But it is just an awful lot of learning.”

As part of this initiative, Partners will document its transformative journey in a five-part documentary-style video series highlighting key milestones in the credit union’s digital evolution. Part one already debuted and the second is almost ready for primetime.