How CUSOs and FinTech Partnerships Can Become a Powerful Growth Engine for Credit Unions

Doug English: [00:00:00] Welcome back to cu on the show. We dig into bold ideas that help credit unions protect and grow their future. And today we’re talking about one of the most important levers credit unions have for growth QSOs in FinTech partnerships. Our guest has been on the front lines of this space for nearly three decades.
John Deering, a managing director and partner at Capstone Strategic. Uh, welcome to see you on the show. Thank you for joining me today.
John Dearing: Thanks so much, Doug. Appreciate the opportunity to talk about the movement and QSOs.
Doug English: Yeah. So, uh, as always, I like to know this credit union movement is a special place.
How did you come to be a part of the, the credit union movement?
John Dearing: Sure about, uh, 20 years ago, uh, we started working with, uh, the credit union, uh, community, I guess you might say. Um, up until then, we were generalists when it came to marketplace, and we’ve worked in over 120 different industries. [00:01:00] But, uh, most of our business was coming from speaking opportunities and people that were interested in growth through acquisition.
And one day, uh, someone what. From one of the largest credit unions, uh, credit union service organizations rather, uh, from PSCU now, Valera, uh, attended one of our workshops and thought that the message was spot on and thought the message could be utilized throughout the QSO community. Um, so we built a relationship and they had us come in and help with their growth strategy to help with their.
Expansion efforts to specifically, uh, educate about fun things like valuation and due diligence and planning for, um, QSO expansion. So that’s how we first got involved about 20 years ago. And that was about the time Doug, I learned about the difference between, um, organization and corporation and member versus, uh, consumer.
And [00:02:00] it’s been 20 years now of having fun in the, in the community. So that’s how it all started.
Doug English: Well, uh, so what are you doing now? Like, what do you spend your time on? Uh, and then, uh, yeah, let’s get into some of those details.
John Dearing: Sure, sure. Um, I guess at this very moment, the number one answer on the board is working with either credit unions that have a desire to utilize QSOs to continue growth.
They could be already in. Uh, involved in a QSO themselves wholly owned, or through a group and multi owned or working directly with the leaders and boards at a QSO itself to help them expand and grow and therefore benefit the, uh, member owner credit unions and flow through to the membership benefits as well.
So we could work with, um, both types of organizations at this stage in the credit union movement, um, and a third category. Um, could be, as you’ve [00:03:00] already teed up, uh, some folks in the, I’ll call it partner, vendor chain and the value chain that, um, provide service to credit unions and ultimately their members.
Doug English: So, you know, in, in the, uh, in the talking points for today, uh, you, you said, uh, uh, you made a nice statement, which is the QSOs are the best growth engines for credit unions. And I want you to, to talk about that, but also like. Why, uh, the qso Uh, over, uh, you know, mergers and acquisitions, which we’ve talked about a ton on this podcast.
And why over core membership growth? A, you know, again, go ahead. Let’s see how Well,
John Dearing: um, I don’t think it’s one or the other, or one of any of those alternatives. Each organization’s gonna have a different strategic roadmap where these things could play a role. You’re right. Um, and, but the other thing is it doesn’t have to be a QSO that doesn’t help with core member growth.
That could be actually the reason that you [00:04:00] get into a qso. So, um, you know, that is, uh, one of the many reasons why, uh, when we’re facilitating on the strategy side with our credit union clients to decide. Path makes the most sense, right. Um, the QSO opportunity can check a lot of different boxes. Um, the opportunity as you’re suggesting, is I believe in my heart and soul, it is the best growth vehicle because it can do about 20 different things.
Yeah. Um, for a credit union and therefore for its membership ultimately, and continuing to allow them to, um, not only survive, but thrive into the future, um, in their communities. So, um. Yeah, I believe they’re a great growth vehicle, but there are a lot of reasons and strategic reasons and rationale, if you will, for pursuing QSOs.
Um, one of them is absolutely new member growth. Another one could be, uh, getting deeper with their members, right? They want to get, uh, deeper relationships with [00:05:00] each of their members. Still. Another is financial solving a non-interest income challenge because of the market evolution, because of some of the things that are going on, uh, with fees and other compliance requirements and things of that nature.
So folks are looking for ways to augment, uh, their current base business and their product and service offerings. So, um, each of those has about, you know, a lot of sub points, but those are just a few. Yeah. On why someone might consider utilizing QSO as a growth vehicle for the, um, and it’s also gonna differ, right?
If they’re already involved or they’re thinking about getting involved. Um,
Doug English: yeah, I assume that, uh. You know, I know that there’s a scale, uh, issue with QSOs, right? There’s, there’s some amount of size that, uh, credit unions think that they have to have, but, uh, the collective nature of the credit union movement means, right, you can get together with other credit unions.
Well, let’s, uh, Um, like, can, can you talk about any [00:06:00] examples of like, uh, where you’ve seen. Uh, a credit union with a QO drive significant growth, especially some, some, uh, non-traditional growth would be interesting. Uh, and then, uh, I think maybe we should back up to the framework that the credit union should have from a strategy standpoint.
But is it, you know, what’s the, where do you start? It is not like fire aim, right? We, let’s, let’s aim before we fire.
John Dearing: Yeah, I mean, to hit that nail on the head, so to speak. I mean, it’s definitely. Um, you need to be strategic versus opportunistic. Um, when, when it comes down to it, you’re entering a QSO with, uh, lots of new folks involved typically.
So you wanna reduce your risk profile and one of the ways to do that is be very clear about what you’re trying to accomplish, uh, through that. That new vehicle, that qso. Um, and too many times, uh, not just in the QSO [00:07:00] community and other industries that we’ve, we work in regularly as well outside of the credit union land, you know, people are opportunistic.
They hear about something, they jump all over it and sounds great, or they like the person or they like the technology or somebody’s referred them, whatever the case. But that’s all, all those things are in the opportunistic bucket and we really guide folks back toward. You know, define what you’re trying to accomplish and see how this opportunity benchmarks against that in order to increase your likelihood of success.
Because nine times outta 10, the credit union’s gonna be investing their hard earned dollars, so to speak. That could be allocated somewhere else. And why would you do something that doesn’t, that’s gonna typically have 70% failure rate, right? Um, you, you want to try to. Make sure that you’re doing all the right things to increase that likelihood of success.
Um, you asked the, a good question about a credit union example. There’s lots of great folks out there that are doing fun things in the, in the QSO community, but it [00:08:00] has to be fun and it has to be. Um, worthy of consideration. So, um, one, one example, I’ll just say, Um, long-term relationship, if you will. Uh, we helped them acquire a benefits insurance organization long ago, south, um, South Carolina Fed.
Um, and then they called us one day and said, you know, we to your, tie those things together. You said earlier, you know, we’re about to do a merger. Um, we’re going to enter a new geography through this merger. Um, we have great things on the benefits and the insurance and property and casualty in our home markets through our qso.
And we see great member engagement as a result of that because we’re doing more products and services with them. As a result of having this QSO and the ability to provide the member and the community more products and services, we want to try to replicate that in the new market, that we’re going to have more members and the opportunity to expand our membership.
Um, so they engaged with us to [00:09:00] find a property and casualty insurance. Agency to fit their strategic profile. Um, so we went out and, Um, did our typical process in what’s called the not for sale market. Um, meaning that it doesn’t matter whether an intermediary, a broker, or an investment bank is selling an organization, we contact the owners of the organizations of those property and casualty insurance agencies that fit the strategic profile that our client defined.
And open those doors and move forward. And in the end, they acquired a, a, a great, great organization with great leadership that had a lot to offer, that actually the leader of that organization and owner that exited, uh, stayed on board and ended up being a great mentor and trainer, if you will, for their younger, uh, property and casualty, uh, folks that work within their QSO and other regions as well.
Um, so it was a home run, not only on the talent acquisition. On the additional, uh, membership benefit, [00:10:00] but also, Um, filling a void, if you will, in their system because they wanted to provide this broader breadth of product. So that’s one example that I thought of. Do that,
Doug English: that’s a, that’s a build versus buy decision, right?
They, they, so they came out, Uh, in and decided to purchase, they already had an insurance operation. But this was a different marketplace. And rather than expand the existing operation, Um, organically, they decided to buy. Do you know, uh, can you tell us anything about how, why to buy versus build anything about that process?
John Dearing: Top Sure. Top two answers on the board are built into the criteria, right? One is the, the folks on the team, Uh, they wanted to do what’s called an aqua hire to get a team of folks that knew that market, knew that community, knew the people, knew the members, et cetera. And number two, hold on, hold on. The insurance and the insurance business.
Aqua hire, you have to carry a [00:11:00] relationship. So
Doug English: you just gave me a new word, John, an aqua hire. I have not heard aqua hire before. So that’s a acquire hire.
John Dearing: Yep. Well, it’s, it’s one of those things, you see it every day now in the credit union community because of the evolution in technology. Right. They.
Credit unions as a whole can’t afford to hire one person after another with certain technological backgrounds and expertise. So they’re teaming in one or partnering or, you know, could invest in organizations at a minority stake level. Um, and they have access immediately to a group of folks that they wouldn’t.
Necessarily have had access to. So, absolutely. I mean, it’s something that’s been utilized for years and years in lots of industries, but because of the technology evolution after COVID, the credit unions are knee deep in it now. No doubt about it. We get calls about that all the time. You know, we’re trying to fill a void and we know [00:12:00] we can’t get the HR system to, and, and, or budget constraints, right?
So we need to do it a different way. And QSOs can help.
Doug English: Yeah. Yeah. Well that, that is a great, great example. Uh, thank you for that. So let, let’s, Um, bring the FinTech side of it in, right. The, the, you know, we’ve had many conversations on this, the podcast about, Uh, FinTech partnerships, Uh, FinTech investing. Uh, what, what are you seeing going on in, Uh, in FinTech investing for credit unions?
Uh, and what strategies do you suggest around that, Uh, activity?
John Dearing: So the, the answer to the second question around strategies is again, be strategic about it, be proactive about it. Be, Um, really systematic, if you will, about your approach to doing it. And again, not just one off handling. You know, Um, inquiries, if you will, because credit union leaders are inundated now, [00:13:00] Um, with inquiries from fintechs to try to solve some riddle in their, in their implementation product suite, whatever the case may be.
Right? So they just can’t keep up with the inquiries. The, the key to this. And back to my comment about how do you increase likelihood of success is, you know, you need to know what you’re trying to accomplish. One on your strategic, Um, roadmap and what gap the QSO can fill. And then internally within that, what the FinTech can do for you.
And sometimes it does make sense to build it to your point earlier. Um, but there’s also in between, Uh, build and buy, there’s partner, Um, and QSOs allow you to do that at lots of different levels because as soon as you put $1 in a FinTech company, either a debt instrument or a equity investment, they become a QSO and they’re part of your organization and hopefully benefit from that in a few ways.
Um, but we really try to guide folks toward, you know, defining that one reason. [00:14:00] Why with.
To your first question, several, Uh, prevailing wins that have made the last, Uh, five years, Um, very, very active in this space, right. It used to be a, I define it as a, you know, a very sheltered market, if you will, in the credit union community. Um, 20 15, 10 years ago, still, it was very sheltered. Sure, there were a couple vendors in the, in the value chain that were owned by private equity, but in the last five years.
Um, half the vendors are owned by venture capital. Half the vendors are owned by private equity. Um, you know, and, and they have, some of ’em have great solutions that credit unions need to look at. Um, and they’re no longer outside of the credit union community, so they’re coming [00:15:00] in. Um, credit unions can buddy up with them in lots of different ways, but the FinTech wants.
Access right to the credit union community. They want a logo with a credit union to show that they’ve had a pilot, they’ve had a win, they’ve had, Uh, an opportunity to succeed. So, Um, you know, a lot of things have evolved in the credit union community, but one thing’s for sure, nobody likes to be the first still.
Um, although that’s continuing to develop right and change as the fintechs can evolve in the credit union space. Um, but. Nine times outta 10. Folks don’t want be the first. Um, the other side of that coin, Doug, is Um, there is a. A, Um, trend line in the credit union community now to set up, Um, QSO holding companies.
So allocate a piece of the credit union’s balance sheet to invest in things, either to be wholly owned, [00:16:00] to be partially owned. Um, there’s a third segment that’s out there, right with Circle Fund. True Stage is still doing their own thing. On the venture investing. Uh, black Knight now has, has entered as well.
Um, so, but Circle’s the big guy with $360 million in their fund. Number two. Um, but even when you get that large, you can’t do a lot of the early, early stage investing because you can’t put a hundred thousand dollars into. Whatever number of, Uh, 360 companies during a fund’s life, right? So as they get bigger in fund two versus fund one, Um, that means there’s a void in the system for the smaller investments and some of the credit unions are stepping in directly, Uh, to help that market evolve and develop with the FinTech investing as well.
Um, so those are some of the, some of the trend lines that we’re seeing. So more, more organizations that wanna serve the credit union space. Um, more credit unions that wanna put money to work, to solve riddles, Uh, for their, for their [00:17:00] communities, Um, employees, efficiencies and members. Um, and yeah, so we’re seeing a lot of, lot of work in that area.
Doug English: Let’s, let’s back up to the, Um. Setting yourself up to be opportunistic. Right. I, I’m, I’m imagining that a lot of times these deals, the initial. Acquisition deal is, Uh, maybe a vendor to the credit union that has a long-term relationship or a, a customer, a member of the credit union with a long-term relationship that gets to, Uh, a, a reason where they need to, to liquidate.
Uh, and, Uh, the credit union becomes aware of that and, and, and thinks about. Participating, which, which is my, my suspicion is you hear a lot about that, so, so tell me if, if you do, and then the, the question is, what strategic design do you want to have, Uh, in order to be ready to enable those sorts of things?
[00:18:00] To welcome them in, but to welcome them in strategically?
John Dearing: Um, so to your first point, absolutely. We get calls all the time for deal advisory and valuation work. So long-term business lending customer, right, or long-term supplier to some of the members or the C-suite player in the C-suite at the credit union, Um, you know, gets wind of something and they wanna evaluate whether it makes sense and then under what terms.
So we can parachute in and help with that. But that’s. The next question is, is that strategic? Well, only if it was on their strategic plan that they wanted to add that product service to their, to their, Uh, portfolio of services. They’re offering their community and members. Otherwise, no, it’s opportunistic and.
Um, they should look themselves in the mirror and ask that question of whether they’re diverting resources away from other strategic imperatives. Right. Um, and that’s the first challenge question we give them. [00:19:00] Is this truly opportunistic? Your question was more, Um, I think Sure. How do we welcome those opportunities in.
The answer to that question is you want to have criteria to evaluate these opportunities, right? And it usually starts with what are the things on the strategic roadmap that you’re not able to solve for internally. Therefore, you need outside partners or outside participants to work with you and collaborate to fill that void, right?
That’s where it usually starts. Um, and a lot of people ask us early on, right? In the relationship. Well, how do we know where to go first? I said, well, look at your strategic plan. And tell me over the last few years what you haven’t gotta, you know, because you have limited time or limited dollars. Right. A resource question.
Um, because a lot of folks try to do too much with too little and they don’t get to certain things. I’m like, okay, that’s where you start. You already agreed with your board and leadership that this is an area of focus that’s [00:20:00] important to your communities and members. That’s where you look, right. What’s an example?
That’s where you start on the qso.
Doug English: What’s an example of that?
John Dearing: Um, business lending, right? It seems to be a, a hot topic these days. The things that, you know, credit unions see an opportunity because some of the larger banks in their community are pulling out, are not doing, Uh, as much with the smaller businesses, Uh, community banks.
Um, may not be servicing it as well as they think they can. There’s an opportunity to build, Uh, long-term membership relationships with owners, bring in deposits through those small businesses, et cetera. Um, so commercial banking is usually the first thing that comes up when they’re talking about that in a strategic plan discussion.
Right. So, but you had, Um, you,
Doug English: you had business lending. In your strategic plan and you, Uh, were pursuing it organically and weren’t able to achieve your objectives, Uh, precise. And, and so [00:21:00] now your question is not changing the strategy, but changing the, the methodology of getting there.
John Dearing: That’s right.
Doug English: Uh, and, and, and so can, can you go keep going?
Like what would, what would the typical next step, what would the typical and ideal, Uh, next steps be?
John Dearing: So the next steps would be exactly what I was gonna say about the last question you asked, and that is develop criteria. Okay. It’s nice to say you want to be in business lending, but what does that look like?
And then what are the other, what are the gaps that you’re trying to fill? Is it a team of people that you need with certain types of expertise? Is it technology? Is it complimentary services and treasury management? Is it, it could be a lot of different things that you’re, you’re trying to fill that you can’t solve for.
Once you have the criteria established on what you’re trying to, Um, seek out, if you will, then you proactively go out there and, and find it and benchmark the options against your ideal criteria. You may never hit the ideal matrix exactly right. But at least you have options instead [00:22:00] of just that one opportunistic over the transom thing that forces people to drop everything and see if it’s exciting or not.
Mm-hmm. Right. You at least have a framework by which you can benchmark one option or 18 options against it and against each other and pick the best of the lock. That’s the, the process that we advocate, Um, is, is to make sure that you have a, a very think about, think about Doug. You know, Uh, an RFP process for core processing, mobile banking, whatever, right?
Credit unions are go through that every five years or whatever. When their contracts are are coming up, they may use an outside party. They may do it internally, but they have a set of criteria that they have established. A better example that hits home with people is hr. Where do you start when you are looking for somebody?
You start with a job description. So that’s the criteria. What are their responsibilities, the roles, et cetera. Then you start to look at the players against that. Then you interview them. Then you [00:23:00] figure out terms. So, you know, it’s very parallels. The, the hiring process is what we as what we do every day.
Doug English: Talk to me a little bit about the scale question, like, Uh, what. H how, how big do you need to be? Uh, or do you just switch and go through, you know, a a a a QSO that is a collective of credit unions. Like how, what do you see happening in the marketplace now and, and how is that changing?
John Dearing: Um, so the world’s your oyster, Um, scale is a great question.
Um, my example earlier was a larger credit union. That’s a big one. Yeah. But, Um, so it’s good that we come back to this because in today’s environment, Doug, we have a lot of organizations that are teaming up with other credit unions to do fun things. Um, example, compliance, right? Example, business lending example.
Uh, analytics example, [00:24:00] Um, collections. So there’s lots of QSOs that are collaborating with multiple credit unions to utilize scale in a, in a combined fashion, as opposed to, I think your question is how big does a credit union need to be to get involved in it? It’s more about how can you do something together.
Um, that has a particular scale, Um, that’s gonna make sense for everybody. Um, because a lot of the, a lot of the, Uh, small to midsize credit unions, everybody’s got their own size thresholds. But, Um, you know, there are different ways to share resources, right. We saw it in the trade association world. Years and years ago in Washington DC when I first moved here 30 years ago and started with Capstone, Um, there was a massive, Um, new wave of business started with, you know, starting with certain functions of the trade associations, Um, working together with an outside organization.
So multiple associations could [00:25:00] basically. Benefit from having that outside expertise and not have all of the cost on their individual trade association. Right. And same thing’s happening now in the credit union community 30 years later, started 10 years ago, but now more and more every day. So people are sharing and collaborating on things.
Um, I, I would say that if you can’t, can’t, there is a threshold of pain though if you can’t afford a person. From your team being or to, to move over and help out this organization. Um, and they’re already doing two or three jobs already, and a fourth one’s gonna be too much for them, right? Don’t think about it, right?
If you think about $50,000, 75,000, whatever the right number is. There are certain minimums if you’re going to get involved in this, that you have to think about, well, it’s gonna be time and it’s gonna be dollars, right? So if you don’t have the time and you don’t have the dollars, maybe you should focus elsewhere because it does add.
I also [00:26:00] say on the other side of that coin is the benefits. Could outweigh something you’re out doing with that money or time on the other side. But that’s, you have to have that discuss thoughtful discussion to figure out what you stop doing so you can do something else that may create more value for your members and the organization moving forward.
Uh, your, your other question was around, Um, what are we seeing and we’re seeing people put.
That, and they’re gonna do it multiple times. So we’re seeing that, Um, we’re seeing, Um, we have a great internal, Um, operation expertise in this area. How can we market that to other credit unions, right? So not only for our internal use, but now we can also sell it to the oth, the credit Union comm community, Um, to help them because they don’t have that.
In house, but to help us, because we’re gonna [00:27:00] drive some income back to our organization, we’re seeing those two plus two other credit unions coming together. So that’s the, that’s
Doug English: business. So in your example, that’s, we, we, Uh, we create business lending expertise, Uh, in our qso and then we go to other credit unions that do not have that and offer for them to participate in, Um, in that activity.
Right.
John Dearing: That’s right. And they can participate through ownership or discounted rates or lots of different, you know, Um, in kind they can provide, back to my comment on talent and humans, right? They might put some, somebody to help out on the call center side or whatever they need to build out that business.
Um,
Doug English: so, yep. And then so for, for credit unions that do get involved in this, are there. Those sort of best practices that increase the likelihood that they’re gonna be successful.
John Dearing: Um, the number one [00:28:00] answer is be focused in your efforts. Um, so I, I like to say focus is your friend. It’s, Um, a lot of people try to chase too many things at once.
Uh, we try to bring it down to what’s your one reason, what’s the one thing you’re going to try to accomplish, do that and then move on, Um, to the next thing. Or to add to that, to put some jet fuel on it. Um, to remain objective is number two. Um, reduce the emotion, Uh, associated with investing in starting QSOs.
Um, you know, people like to have pet projects or chase shiny objects or all of the above. Um, so that’s when the criteria comes back and, Uh, forcing people to say, does this fit on our strategic roadmap? Does it have these certain parameters that we’ve agreed in our decision making body between alignment of the board and the, and the, Uh, leadership that this is what something we’re going to try to accomplish so that [00:29:00] that tamps down emotion and makes it more objective.
Um, the third one that I would mention is just around, Uh, planning and being ready. So. What I mean by that is it’s, it’s great to have, Um, an idea on the direction of travel, but you need to think through the scenarios of what if, when the other side says, or the other party or somebody says, yep, let’s go through that gate together.
You don’t wanna look like deer in the headlights and lose momentum. You want to keep that momentum going, Um, to build that rapport, trust, et cetera, with the other parties involved. Um, so anticipating those questions is usually something. If you’ve, if you’ve given it the forethought, I guess. Um, you’re, you’re gonna have a higher likelihood of success as well.
So those are a few reactionaries,
Doug English: well, first, the first time through, they need someone like you to help ’em, right? Because you don’t know what you don’t know and you don’t, and be the ability to anticipate the questions that would think would be challenging, Uh, unless [00:30:00] your, your personnel happen to have the background.
So that’s why you get help. And then as you, as you, as you keep running, turn the crank and running the system and you get better at it, then maybe you don’t need as much help. Is that right?
John Dearing: Right. That’s right. And, and, Um, asking the hard questions, I guess, Um, internally as well is a role that we often play.
Um, and then also being the, Uh, Uh, the bearer of bad news to parties along the way so we can insulate, because it’s not like a. Most of the transaction work that we do in the Cusso community, it’s not as though, Uh, it’s a used car kind of situation where you’re buying a car after you beat each other up and you leave the lot never to see again.
You’re usually walking off the lot, hand in hand, Um, singing Kumbaya, and you have the next five years together to, to work through challenges. So, Um, you, you absolutely need to, Um, be clear and be aligned. Um, Uh, be open, I guess is the other comment that I’ll make. And [00:31:00] sometimes that means that we need to be, Uh, the, the tough guy during the, Uh, the negotiations to, on the terms to make sure that our clients are, Uh, well positioned for that moving forward.
Doug English: Yeah. Well, what are the hard questions? You said you, you, you asked the hard questions and, and be the, the bad cop, if you will. Like, can you gimme some examples of that?
John Dearing: Sure. Internally it’s usually with the board and leadership is where that comes up a lot. Um, and it’s first, you know, Uh, figuring out ways to ask questions to get people to, Uh, speak their mind early and often on the things about direction and criteria.
Um, because the last thing that any leadership group wants to, Um, happen is. They go through it and hear silence from a board member, and then when they bring a real live opportunity that fits the mold. Exactly. Um, and then they’re told no because, you know, they weren’t asked the question. Right. So it’s a lot of wasted time and resources.
So we ask [00:32:00] hard questions, Um, often early to make sure that we reduce the likelihood of that happening, Um, because that’s just frustrating for. The individuals at the credit union, it’s also frustrating for whoever the partner, potential invest, Um, and partner is on the other side. Um, as well. So that’s one example.
Um, yeah, making sure everybody’s thoughts are heard early and often.
Doug English: Yeah. Alignment, right? That’s where your alignment comment earlier is making sure that, Uh, you try to get the unspoken questions out. Uh, and that’s, that takes experience to draw those out and make it a safe place to ask them.
John Dearing: Well, the, the other, the other area I already alluded to as well is when there’s one particular opportunity that bubbles to the surface because of people they know.
There’s a lot of se there’s a series of hard questions there to, Um, ask and prod around the why. And, Uh, before you get to the how, it’s more [00:33:00] about why this one, you know, Uh, have you bench if it’s such a great marketplace to be in or a great opportunity. Who are the other five or six that you looked at against this one to make sure this is the best of the lot.
Right. So having a lot of options to compare because if you only have one, that’s the one that people are gonna be focused on. So you wanna be able to show, Um, that you compared and contrast and, Um, yeah, it’s the best of the lot
Doug English: I can imagine If, Uh. If that comes with a lot of, Uh, connection, personal connection to the senior team, Uh, it could be delicate to, Uh, be formal about evaluating those alternatives and seeing how this one ranks, Uh, on a just quantitative basis. Well, how, how the numbers look versus, well, this, this is, this is your weekend golfing friend.
John Dearing: Well, exactly. Exactly. And, Uh, sometimes it just, it does happen, Um, that they are their weekend golfing friend to use [00:34:00] your, your point. And, Uh, that gets ferreted out and things don’t happen for good reason. Right. And that’s okay. You know, when, when we’re working on a market to property and casualty insurance is a hot one right now. Right. You wanna look at 50 to a hundred candidates to buy one, Um, wow. You don’t want one or two that just happen to do business with your credit union, right? I mean, this is the, the, in the likelihood of success increases with the number of players that you evaluate. There’s no doubt about it. That’s been proven over 30 years. And, Um, yeah, it’s, it’s tough to, Uh, if they’ve already, if they don’t call us until they’re already.
Signed a letter of intent and they want help with final valuation and due diligence. Some, you know, you gotta step back. And that’s an, that’s another set of tough questions, right? Um, and maybe we might not get work on that particular project as a result of some of those tough questions. ’cause you know, we have to say no as well. The situations, we got our clients to say no a lot more than they’re used to. [00:35:00] Um, but we think that that definitely, Um, keeping on the strategic path is the right one.
Doug English: Excellent. Well, Uh, really interesting, Uh, commentary today. John. Uh, thank you so much for your work, Uh, in the credit union movement, especially driving non-traditional growth. That’s, Uh, that’s important to have credit unions keep up in. This changing marketplace. It’s, it’s, Uh, it certainly is not slowing down and we’ve, Uh, we’ve all gotta do our best to, Uh, help the credit union movement to win.
So, Uh, any, Uh, final thoughts for our listeners or, or ideas for how they can keep up, get involved, Uh, start to read, Uh, podcasts, podcast ideas, just anything that would help our listeners to win, Uh, in the, in this particular activity.
John Dearing: Well, I mean, capstone has a ton of, Uh, resources available if folks wanna check out our website.
Um, there’s definitely, definitely opportunities [00:36:00] there for learning, Um, about different pieces of the external growth and proactive process that apply to the QSO community. Um, in addition. There are great conferences out there that are across the nation, Uh, where folks that are involved in, Um, venture and involved in QSOs, Uh, convene and share ideas and talk.
Um, there’s also, of course, Um, Uh. Outside of the credit union community, but more and more credit union folk are attending, Uh, things in the FinTech community that have, Uh, opportunities to hear pitches meet and greet and share ideas. So all three of those categories are fair game and I think help people down their journey, if you will, and learning more about QSOs.
Doug English: Excellent. Thank you John Deering from Capstone. Thanks for joining me today, and until next time.