By John San Filippo
The Filene Research Institute’s big.bright.minds conference was held in San Diego November 19-21. The 19th was devoted to a number of pre-conference activities, while the conference proper kicked off on November 20. Presented here is a recap of that first full day of the conference.
Introductions
The day began with an intimate conversation between event emcee and HerMoney CEO Jean Chatzky and Filene CEO Mark Meyer. The two first discussed the importance of bold and courageous leadership in today’s fast-paced environment. Considerable attention was given to the pandemic, given the significant and unprecedented changes that resulted.
“To be decisive in a moment where things seem very erratic is also to be calm,” Meyer told the audience. “I think [one thing that] is becoming one of the most critical competencies to leaders today is agility. The notion of really developing agility. And it's exhausting.”
The conversation then moved on to how to drive a cultural shift within an organization. “When we started i3 20 years ago, one of the key aspects was to get people to seek and understand that change is really just doing the field work,” said Meyer. “It’s getting people to watch what's happening around them. Chin up, head up, look around to just get off the credit union cul-de-sac. Run to the autobahn and look around and you see so clearly this blossom of just magnificent opportunity around us.”
DEI in 2024
The first speaker of the day was Quinetta Roberson Ph.D., a John A. Hannah distinguished professor of management and psychology at Michigan State University, who shared insights on “Empowering Leadership: Cultivating Courage for a Truly Inclusive Workplace.”
“I think we can all agree [this is a] pretty confusing time for the world of diversity, equity, and inclusion,” Roberson told the audience. “We are now at this point where many leader groups don't know what they can say about DEI [diversity, equity and inclusion], what inclusion means in today's world, and how they can move forward to create a workplace where everyone is part of the culture.”
She brought her presentation back to the theme of courageous leadership, providing practical advice for today’s credit union leaders as the navigate the uncertain waters of DEI in 2024 and beyond.
Design-Driven Innovation
The next presentation was titled, “A Design-Driven Approach to Innovation.” This topic was covered by Mai Nguyen, director of The Design Lab and professor, urban studies and planning at the University of California San Diego.
“Human-centered design is missing a really, really important component of our humanity, so we've shifted from human-centered design to humanity-centered design,” explained Nguyen. “What that means is we're thinking about the future – longer term future – as well as the planet. Not just people, but people's impact on the planet. So, this entire ecosystem of living things in the natural environment, when we create products, services, policies, it can't just be for people.”
She continued, “It has to be for people and the planet. And then it's really important for us to think about designing with the community. A lot of times designers say, ‘Oh, I'm designing for the community. I'm designing for these people, or I'm designing for this population.’ That's the wrong way to think about it. We design with community and as much as possible, we support designs by the community. We enable the community through our skills and our talents. In the end, when we create that product or service, we know the community was involved in it and they wanted it in the first place.”
The lab* at Filene
The lab* at Filene plays a unique role in the organization’s advocacy. From the Filene website:
The lab is Filene’s ongoing platform for testing new tools, products, and strategic solutions for their potential to help credit unions grow and deepen their impact. Each year, the lab works with a group of credit union sponsors and stakeholders to select and execute a set of “quick and nimble” tests identified through Filene’s research and market engagement.
The lab’s efficient and collaborative approach to testing yields actionable insights to support the adoption of proven solutions and expand credit unions’ capacity for innovation.
The lab goes beyond idea generating and takes questions and new ideas emerging from Filene’s Centers of Excellence and communities and returns actionable insights and solutions for credit unions to put into action in real and tangible ways.
In the next presentation, session moderator and Filene’s incubation director Megan Freshour was joined by a panel consisting of Royal Credit Union’s VP of Digital Experience Colin Boone, MSU Federal Credit Union’s Chief Research and Digital Officer Ami Iceman-Haueter, exagens’ CEO Michael Stojda, and VerticeAI’s CEO Mitch Rutledge to present and discuss the lab’s seven tests from the previous year. Each test fell into one of the following categories:
Growing Membership and Product Adoption
Improving Operational Efficiencies
Enhanced member Engagement
Security and Fraud Protection
Member Profitability
“Member profitability has been a bit of a dirty word for credit unions,” said Chatzky as she introduced the next speaker, Mike Higgins of Mike Higgins & Associates. “The problem with that, as you'll hear from our next speaker, is that profitability is an equation for what members actually value. Increased profitability means that your members are benefiting from the services that you're offering.”
Higgins went on to explain the importance of looking at member profitability. “We have this thing called a net interest margin on our income statement. Really what that is, is the profit we make off the balances. And that usually is a very large number, 75, 80, 85% -- more total net revenue for the organization,” he explained.
“It's really comprised of two spreads. And this isn't playing games of math; this is the actual truth. We bring in deposits or shares at some cost and while we're waiting to loan them out, they can earn some type of spread being invested. So, it's the difference between the cost of the deposit and what we could invest and earn with it. That's called the deposit spread,” he noted.
“When we loan those dollars out, we take money that was earning an investment yield and convert it to a higher rate of return called the loan yield,” he continued. “And the reason we get a higher rate of return is we've got credit risk and we've got interest rate risk.”
Higgins went on to explain in detail why all of this is so important, not the least of which is the need to engage more with higher profitability members.
Gen Z and Banking
The final session of the day was a panel discussion moderated by Inlay Insights Founder Kim Lear. The panel consisted of four Gen Z volunteers who agreed to discuss their financial knowledge and habits. These include two Chase customers, one Wells-Fargo customer, and CalCoast Credit Union member. The panel included a married technology worker, a single technology worker, a food service worker and a student.
One of the most interesting points from the discussion is that all the panelists, without exception, chose their current financial institution based on direct input from their parents. Commenting on this, Lear noted, “One of the things that we're seeing in the marketplace is that there's not the same rebellious spirit that we saw with previous generations of young people, where the service providers that parents used were a big deterrent – a point of friction.” She added that in the past, some financial institutions employed slogans like “Not Your Parents’ Bank” to attract younger accountholders, an approach that is apparently now outdated.