Honoring Innovative Credit Union Solutions

By Randy Salser

Credit unions have access to many leading business partners to help them identify and fulfill needs for their members. Whether growing membership, revenue or both, there’s a vendor for that, to coin a phrase. Sometimes it’s simply creating efficiencies for the credit union, so they can focus more time on doing what they love: serving members. That’s why we created the Innovation Awards, to celebrate the groundbreaking work of our industry’s leading business partners.

The judges’ jobs have become increasingly difficult every year as the field of game-changing solutions grows in scope and complexity. The judges evaluate the entries based on their creative approaches to adding value for credit unions. We were excited to announce the winners of the 2019 Innovation Awards at the NAFCU Annual Conference in New Orleans.

LendKey was selected for its student lending platform and credit decisioning API. This solution enables improved analytics to help more borrowers fund their student loans through partner lenders.

Senior Vice President of Lender Partnerships Christian Widhalm explains that LendKey wanted to bring the credit union reputation for excellent member service into the digital age, to face new competitors such as marketplace lenders. “Over the last decade, marketplace lenders actually have become the leaders in personal unsecured lending,” he says. “They have nearly half the market, and then credit unions are second.”

Widhalm says marketplace lenders recognized that the personal loan market segment was relatively ignored and dissatisfied with the customer experience, so the market was ripe for disruption. “We see ourselves as empowering credit unions to better compete in this new digital age and have the right tools to do so,” he says.

As credit unions work to keep relevant in the digital banking realm, LendKey is providing quick, cost-efficient digital lending solutions for credit unions of all sizes to participate in student and home improvement loans.

The Mastercard Pay with Rewards program is another unique service offering that the judges recognized with an Innovation Award this year. The new rewards program helps credit unions bolster card usage, driving spend and engagement by allowing cardholders to make purchases anywhere with their rewards points. The card brand also rolled out new APIs in the Mastercard Developer Zone to open up client access to the solution and data.

“As you look at the rewards landscape and the payment landscape in general, obviously there’s a lot of change happening. Consumers have higher expectations in terms of how and when they get things,” says Mastercard Vice President of Loyalty and Engagement Michelle Geraghty. “We found that a lot of consumers were not happy with the lack of choice and flexibility when it came to redeeming their points or getting value for their cash back.”

Geraghty continues, “Pay with Rewards enables cardholders to redeem rewards by simply using the card they earned the rewards on. Then they can just go to a local store or restaurant or online and use the points any way they choose, so it addresses that need for flexibility and choice for cardholders.”

The program generates real-time engagement and branding for credit unions’ cardholders as well as revenue, because members are using the card again to redeem the rewards, and they receive a notification congratulating them for using their points for the purchase. “For issuers like credit unions, it brings in more  real-time  engagement for their cardholders,” Geraghty says. “So, they’re really reinforcing their brand and their rewards program at the point of sale.”

The program is a flexible, cost-effective method for executing point-of-sale reward programs with no impact on the processes or technology used by merchants or acquirers. Card issuers can configure program rules to guide behavior that optimizes their portfolio’s potential.

Finally, Q2 won an Innovation Award for its introduction of Gro technology. Gro specializes in mobile-first member acquisition, rapid account opening, large-scale marketing tactics for smaller credit unions, service to business members, ID scanning for quick data extraction and more.

Q2 Gro Vice President of Sales David Eads explains that he built the platform to help credit unions create a member experience similar to that of leading e-commerce providers. And the product allows members to join a credit union in just four minutes!

“Account opening is certainly a part of it, but it’s also about being able to integrate with best-of-breed email and digital marketing tools, and so on,” Eads says. “A lot of the solutions that came before Q2 Gro were really more underwriting-focused. They weren’t focused on streamlining and providing a frictionless experience for the consumers.”

Eads says the results have been clear. Q2 Gro clients have experienced a 70 percent checkout conversion rate; typical institutions experience around 20 percent or less. “That means a lot more people are able to get through the process successfully and, ultimately, join the credit union and get the products they’re looking for instead of being frustrated and going somewhere else,” he says.

Q2 Gro enables growth efforts as consumers increasingly move toward digital and mobile channels, a clear winner for credit unions.

Congratulations to our 2019 Innovation Awards winners!

Randy Salser is president of NAFCU Services Corporation.