By Roy Urrico
The $4. 5 billion Westbury, N.Y.-based Jovia Financial Credit Union has much going for it technologically as demonstrated by its winning the 2024 Tekkie Award for Member Growth. However, the credit union realized it needed help in building a member application platform that could scale. As a result, Jovia partnered with San Francisco-based Clutch, which delivered exactly what the credit union sought: two interconnected origination engines – loans and deposits – that members can interact with digitally or in-branch.
“We had built our own member application platform in-house. The platform we had was rock solid and flexible to whatever we wanted to do as an organization. But like all things in life, nothing comes for free,” Jovia’s Chief Technology Officer Dennis Klemenz told Finopotamus. “The pain point that we had was that we needed to be a full software development shop to build the platform in a way that could scale from a technology standpoint.”
Klemenz pointed out the investment to do that would have been significant in both cost and time. “It’s not worthwhile building software unless you can scale that software to offset the development costs and we were not going to be able to achieve development scale with our internal platform,” he noted.
Clutch, a cloud-based fintech platform, specializes in omnichannel consumer loan and deposit account opening solutions for credit unions. “Credit unions love the combination of both products. If you onboard at a credit union, you either do it through a loan product or deposit product. Imagine that experience is a 100% consistent,” Clutch CEO and Co-Founder Nicholas Hinrichsen told Finopotamus.
Shopping Around Led to Clutch
Jovia looked for “out of the box” platforms that could replace its homegrown system, Klemenz recalled. “We knew that most platforms that have been on the market for a while would have a robust set of capabilities. But we also wanted to look at some newer platforms to see the trajectory of development.”
The reason for that, Klemenz said, is “when you buy software you are not just buying for today, you are buying the trajectory of development of that company, too. We were okay with finding a platform that met most of our needs but had a strong trajectory to keep building. Clutch provided us the trajectory that we wanted and also provided the best platform for offering members other products that would save them money.”
Jovia implemented Clutch in two phases. The first phase occurred in the first quarter of 2024. The second phase took place in second quarter of 2024.
The highlight in implementing Clutch, noted Klemenz, is its ability to offer products and services that Jovia’s members need. “If a member has a high interest auto loan with another financial institution, the Clutch platform will offer the member a loan from our credit union that will save the member money. That’s a huge win for the member. At the end of the day, offering ways for our members to improve their financial lives is a key tenet of Jovia. Clutch’s platform fits that mission.”
Tangible Results and Benefits
“The Clutch platform integrates with several systems that we already have and also provides integrations to systems we are evaluating. Integration of systems is where financial technology is going so integration is key,” said Klemenz. “Even better is that with the trajectory of development, if they do not have integration, they are able to quickly add that to their roadmap and execute on it. The speed at which they move rivals that of an internal development shop. It’s incredible.”
Klemenz emphasized the swiftness of development for new features. “We are a demanding shop and we were doing everything in-house. To transition to an external product is a tough transition to make, but Clutch’s speed of delivery is unmatched in the marketplace. If you need something that is usable by multiple clients, they will build it and build it fast.”
The other benefit, relayed Klemenz, “is our ability to scale the services. We ran a Super Bowl commercial and spent a significant amount of time balancing our tech resources to handle the scale of applications from the commercial. After we converted to the Clutch platform, they have scalability built-in. If we have another viral commercial or ad and we need more horsepower, they can easily add it. They’ve architected this thing right. As a tech geek, I appreciate that.”
Klemenz continued, “I cannot emphasize enough how hard it is to move from in-house developed products to buying those products from a company like Clutch. But the Clutch folks have delivered with the speed of an in-house development shop. It’s really incredible.”
Clutch Start with a Loan Experience
In 2017, Hinrichsen and Chris Coleman, Stanford University alumni, sold their previous digital car retailer company, Carlypso, to Carvana.com. The two followed up by co-founding Clutch in 2020, a credit union service organization (CUSO), which now processes more than a $1 billion in loan applications.
Hinrichsen described how at the onset they were looking to create the next generation point-of-sale system for digital credit union lending. This desired software solution, he noted, would allow credit unions to compete with direct-to-consumer lenders, reduce labor intensity and data aggregation from multiple sources, and offer borrowing experiences that members would rave about to family, friends, and coworkers.
“(Clutch) started with an auto refinance experience where you click twice and it just magically knows everything about you and the car and makes it really easy to refinance your car to the credit union,” said Hinrichsen. He added, that then became a portal for all loans (e.g., auto, personal loans, credit cards, lines of credit, recreational vehicle, boats). “And then the credit unions asked us ‘can you build the same (experience) for account opening?’ So, we launched that piece last year and that has been on a tear. Credit unions love the combination of the both products.”
Hinrichsen explained, “What used to be a very disjointed process, becomes an experience like Chase.com or Chime.com.” Clutch offers:
Digital account opening. A digital origination experience complete with automated cross-selling, retargeting, premium fraud and identify verification, immediate funding, and a streamlined member experience that takes less than five minutes both online or in a branch to open a membership and deposit accounts.
Digital loan opening. A digital experience for originating and refinancing loans complete with automated cross-selling, retargeting, and a streamlined member experience that takes less than five minutes both online or in a branch.
Designing Clutch
What started as an auto refinance product that became a loan portal now is a platform with 115 credit union clients. “And most of them have both products for loans and deposits,” Hinrichsen said. “So, getting a loan, any consumer product from the credit union should feel you are dealing with the most modern institution with the best technology possible. That is what we are enabling.”
Henricksen said a team of 12 technologists managing the Clutch platform also helps add layers of protection and security to protect clients from data breaches and hackers.
“I hear credit unions tell me and partners and other people at the largest conferences ‘Clutch is the premium solution.’ It is all about digital onboarding,” he stated. “Digital banking technology also needs to empower the branches. Technology should support the staff in the credit union and to serve you incredibly well.”
In 2022, Marlborough, Mass.-based Digital Federal Credit Union, better known as DCU, won the 2022 Tekkie Award for Lending helped by its partnership with Clutch, which delivered a digital loan system.