Helping Credit Unions Become More Like Fintechs

Fintech and member experience – they may look simply like buzzwords, but they are also two top-of-mind strategic considerations for credit union executives today. With consumers now accepting nothing less than seamless, frictionless, personalized digital experiences every time they pick up their phone or tablet, credit unions are under pressure to leverage fintech to keep pace.

A key part of this effort involves forming partnerships with fintech companies, and to gain some insights from the other side of those partnerships that continue to grow across the industry, CU Times spoke with Lightico CEO Zviki Ben-Ishay, whose company is currently expanding its presence in the credit union space. Lightico, which is based in Tel Aviv, Israel and has a second headquarters in New York City, provides a customer experience platform that enables businesses to collect customer e-signatures, documents, payments and ID authentication in real-time and straight from the customer’s smartphone.

CU Times: Can you tell me a bit about your professional background and how you decided to zero in on improving the digital customer experience for credit unions and other businesses?

Ben-Ishay: I spent about 15 years in the call center space, building and designing software for financial organizations in the United States. It was always a trouble if you wanted to do more than talk to the customer, with the services being so siloed and so full of friction.

I think the main driver for forming a digital solution was when the smart devices began to pop up. When I started working on Lightico seven years ago, I had a Blackberry. It wasn’t smart, although it had some cool features, but then the iPhone started to come. That was the point where we could offer the world some new type of solution, where every time you’re interacting with the member or customer, you’ll be able to open a digital channel and get everything completed on the spot, making life easier for both the developers and the customers/members.

CU Times: What was the thought process behind targeting credit unions, and how many credit union clients does Lightico have now?

Ben-Ishay: We have close to a dozen [credit unions]. With our earliest adopters, we started by getting the solution on board, understanding their troubles and increasing functionalities. And then when we started to get to know the industry well, we saw that credit unions are a bit behind from a technological perspective. So we needed to help them go to market and digitize the member experience, and move to becoming a “fintech” instead of just a regular credit union. To do that, we needed to create partnerships with the leading core systems. Credit unions really need an integrated solution, because they won’t spend lots of time and resources on connecting things together.

We are about to launch a beta with one of the leading vendors when it comes to credit unions, and we’ll be able to offer friction-free services to thousands of credit unions across the U.S. This is going to be one of our main pillars for 2022 as a company, because we’ve found that [credit unions] really need it.

CU Times: Credit unions have viewed fintechs as potential competitors in the past, but recently they’ve viewed them more as partners that can provide digital capabilities they cannot create on their own. How would you describe the relationship between credit unions and fintechs now?

Ben-Ishay: So there are fintechs, and then there is financial enablement software. What’s the difference between the two? A fintech is like a neobank, and that is competition for [credit unions] in some sense, because eventually, that is a bank that is going to compete for the same types of customers for loans, accounts, etc. A fintech has employees doing the underwriting and everything else on the back-end, and only digitizes the front – that’s the difference between a fintech and a regular bank.

But on the other side, there are companies using the name “fintech” that are not building banks. What we are doing is helping the credit unions become more like fintechs. We’re giving a standard financial organization the ability to rapidly, digitally transform their customer communications, to make the customer feel they are dealing with a new, cool kind of company that gives them awesome service that is fast and frictionless.

CU Times: What are some of the biggest gaps in credit unions’ efforts to improve the member experience, and how should they be addressing those gaps?

Ben-Ishay: The first gap is in brand, and the second is in technology. Credit unions’ brands can be a bit old fashioned, and [they need to understand] that the younger audience is not [made up of] 14-year-olds, it’s 30-, 35-year-olds, and they’re all used to a modern tech experience. So investing in brand is one thing I think needs to be done, and to support that brand, they also need to invest in technology. And I think because credit unions are small compared to the big banks, they have the ability to move much faster, and deploy a lot of different solutions with less friction. This way, they can become much cooler and more tech-savvy, and what customers want is a personal, non-corporate banking experience.

CU Times: One thing that is trending now for financial institutions is introducing the ability to buy, sell and hold cryptocurrency into their suite of services. Do you think credit unions should consider offering crypto services to members?

Ben-Ishay: It depends on the business. If you’re a financial institution that has already digitized the entire customer experience, maybe adding those kinds of solutions would be a good fit for you. I think credit unions specifically need to start investing in lots of different things before they start looking at cryptocurrency.

CU Times: How is Lightico approaching an onsite versus remote workplace strategy?

Ben-Ishay: Our office is at about 50% occupancy, and we encourage our employees to come in. I think it’s important, the human touch and getting closer in the workplace, it’s very critical for getting an organization to function. Humans love humans, we love interaction, it’s what drives us and makes us happy.

CU Times: Any final thoughts for credit unions looking to improve their overall digital banking strategy?

Ben-Ishay: What I would say to credit unions is, let’s build an amazing tech stack for them so they can be more like fintechs, and when the competition comes – and it will come – they will be more equipped and can lead a new chapter in the credit union space by really becoming technology companies.