In this episode of CU on the Show, Doug English sits down with John Janclaes, President of Nymbus CUSO, to explore how credit unions can leverage digital branding and strategic partnerships to overcome growth challenges in today’s fast-paced financial landscape.
Unlocking Growth Potential Through Digital Branding and Strategic Partnerships
- The Power of Niche Banking: Serving Members Better with Digital Brands
John explains how credit unions like MSU FCU are using Niche Banking to address the unique needs of different groups within their membership. The creation of brands like AlumniFi for graduates and Collegiate for students showcases how digital brands can cater to specific life stages, offering tailored financial solutions that traditional banking models may overlook.
By focusing on what John calls “jobs to be done,” credit unions can design digital brands that not only meet but exceed member expectations. This strategy has proven successful for several credit unions, with Nymbus helping launch 21 brands in the marketplace, each contributing to growth and member engagement.
- The Role of Strategic Partnerships in Driving Growth
Another crucial aspect of Nymbus’s approach is the formation of strategic partnerships through their CUSO (Credit Union Service Organization). John discusses how the CUSO model allows credit unions to invest in and benefit from fintech innovations, providing them with the tools needed to compete with larger financial institutions.
He highlights the importance of moving from a vendor mindset to a partnership mindset, as outlined in his latest book, The Partnership Advantage. By fostering strong relationships with fintech partners, credit unions can access cutting-edge technology and services that would otherwise be out of reach. This collaborative approach enables credit unions to scale their operations, enhance their member offerings, and ultimately drive growth.
- Solving “Thorny Technology Problems” with Nymbus
Throughout the episode, John touches on the challenges many credit unions face with outdated technology. He shares how Nymbus is positioned to help credit unions overcome these “thorny technology problems” by providing modern, cloud-native solutions that integrate seamlessly with existing systems. Nymbus’s “credit union in a box” approach offers a fully managed service, including strategy development, member onboarding, and even call center support, making it easier for credit unions to adopt new technologies and launch digital brands.
John’s insights underscore the importance of being tech-first in today’s competitive financial environment. With Nymbus’s support, credit unions can modernize their operations and offer members the digital-first experiences they expect, all while maintaining the personalized service that credit unions are known for.
Final Thoughts
- Digital Branding Success Stories: Real-life examples of credit unions that have launched successful digital brands with Nymbus’s help.
- Strategic Partnerships: How the CUSO model is empowering credit unions to leverage fintech innovations.
- Technology Transformation: The steps Nymbus is taking to solve critical technology challenges for credit unions.
Stream the Episode to Learn More
Tune in to hear more about how Nymbus is helping credit unions grow, innovate, and thrive in a rapidly changing financial landscape. Listen now to gain valuable insights that can help you unlock new growth opportunities for your credit union.
John Janclaes and Nymbus are not affiliated with or endorsed by ACT Advisors, LLC.
Audio Transcription
Doug English 00:02
John Janclaes from Nymbus, welcome to CU on the Show, I’m delighted to have you on the show.
John Janclaes 00:34
Doug,thanks for the invite. Glad to be here.
Doug English 00:37
Yes, sir. So, John comes to us as the retired CEO from partners Federal Credit Union. And now, are you a CEO now of Nymbus? Or what’s your role in Nymbus?
John Janclaes 00:48
Yeah,I’m president of Nymbus CUSO.
Doug English 00:50
Tell us about how you got started working with credit unions way back.
John Janclaes 00:56
Oh my gosh, way back. So like many of us, I started on the dark side. Coast Federal Bank, Valley Federal Savings. Both of those institutions went away, and I experienced what a lot of folks did working in that sector was layoffs. And then I started to work as a consultant to help credit unions increase fee income, insurance products, annuities, those kinds of things. And one of the accounts I was working at was Lockheed Federal Credit Union. Folks know them by the name of Logix. I joined their team. Was there for 14 years, and just about in great credit union fashion, did about every job that you can think of before taking the job at Partners Credit Union, which serves the Walt Disney Company as their CEO, and stayed there for 17 years. About 17 years in, I said, you know what I’m ready for next. I don’t know what it is, life’s an adventure. Let’s embrace that. We had some great folks lined up to take my place, and so the credit union was really good spot. We’re on the backside of covid too. There was many moments that were important, and we got by. And then there was opportunities that started to come. And the one that was the most attractive to me was to help credit unions in the technology space. I joined Nymbus. Nymbus is a technology company. We started a CUSO to bring those technology solutions that help you grow to credit unions. I started in the CUSO and Doug, I thought I was going to be here about a year to get it started and then move on to something else. It’s now coming up on four years, and it’s just been fun to grow. Nymbus has grown from, I don’t know 125, folks that were here when we started to approaching 500 now. And it’s timely that we’re in the marketplace to help folks grow and deal with what I call these thorny technology problems. Like you need to be tech first, but I’ve got lousy tech What do I do about that? And we bring some solutions to help with it.
Doug English 02:38
Yeah, that’s what caught my eye, John. Is that Nymbus work in creating a separate digital brand for credit unions. You’ve been doing that for four years now. How many credit unions have gone from inception to launch in your time that you’ve been there?
John Janclaes 02:54
Yeah, so we have five that have grown from inception to branch. One of our credit unions has done three brands going on four brands now. In all, between banks and credit unions, we have 21 brands in the marketplace. So we have just learned a ton Doug, as you can imagine, launching brands. What works? What works better? What kind of marketing spend you need? All these kinds of things. We’re on the fast track of growing and solid strategies, you can tell with that many folks leaning into the strategy, saying we want to try it, let’s go.
Doug English 03:25
Yeah, it’s really interesting. Tell our listeners a little bit about the organizational structure. It’s a neat structure.
John Janclaes 03:31
Yeah. So there’s Nymbus Inc, which is the technology company, and then we started at CUSO for two reasons. Think about it being a marketing arm to tell credit unions, hey, we’re here. This is what we do. But in addition to that, credit unions are very interested in sharing in the equity opportunity, in ownership in fintechs, and so the CUSO permits that investment. And so that’s been an important part. And we’ve had many of our credit unions make that investment as we’re doing our next round of funding.
Doug English 03:59
I think you said you have one credit union that is on their fourth digital brand. Now that is confusing to the uninitiated. Tell me about what did they initially think that they were going to be doing, and how did it become so many additional brands? Tell me about that experience.
John Janclaes 04:16
Yeah I’m glad you brought it up because the idea of niche banking is that you can solve for different problems for different groups of members. You see them, you want to solve for them. You want to solve digital first. So at MSU FCU, they had an opportunity saying, We’ve got folks who initially joined the credit union because they came to college here, but now they’ve graduated and they’re alumni. And guess what? They’re not in Michigan anymore and have access to our branches, so we need a digital brand to reach them, and that number of folks was sizable in their field of membership, so we launched a brand called Alumnifi, powered by MSU FCU. So I recognize the brand, I trust the brand, but now you’re offering solutions that speak to me where I’m in my life right now, I’m not a college student anymore. Another offering we did for them, when you think about this life spectrum, is saying, hey, we’ve got young college students that are joining, and they’re really digital first. I mean, they will come to the branch, but more than ever, they’re digital natives, right? So we started a brand called Collegiate. Another business opportunity in their field of membership was that, you know what our banking system is an old technology, and it’s really geared on doing consumer banking, not small business banking. But in our field of membership, we’ve got a number of small businesses that are growing. We need to provide them a better set of tools. So we started something called Pillar, and it is small business banking niche application. We will convert some of their folks who are on the old technology onto the new and Nymbus will do this through a white glove service. We will, one by one, bring them over, introduce them to the new tools that are available in the small business banking application. And then also, now we have an offering that we can turn to the market, saying, hey, if you’re a small business person looking for that kind of great concierge service, and along with the tools and the technology you need, come on over. So, this is really typical. We start with strategy, first looking at what are we solving for? What jobs need to be done that we’re not getting done yet. And then let’s apply our solution to that.
Doug English 06:14
One of the interviews I did a couple of years ago now was about acquiring commercial deposits for credit unions because they’re sticky, they’re large and they’re inexpensive, historically, anyways. I know that’s been a challenge for credit unions to capture those deposits. Does the digital brand help with that? And what impact have you seen?
John Janclaes 06:36
Yeah, it does. We did a research paper together with Filene saying, how big is this opportunity? Help us think about the size of the prize, and then what are the issues that need to be done? And for your audience, I’ll make sure that you maybe have a link that they can go to that paper. It’s super informative, but what we found out is about 40% of your members in your field of membership have a side hustle. And you know what? They need these tools and they’re smashing together their business along with their side hustle, with the retail bank account, better to separate those and give them the tools they need to grow that hustle. Which may become moving from being a sole entrepreneur to being a full time thing to being a business with employees. It was that fact pattern that helped us at Vantage West. We launched a brand for them called Hustle. And what it does is it recognizes that in their market area, tech workers are coming in like crazy and growing, and they also have this presence of these workers in their field of memberships and the assessment saying we need to do better and like right away and hurry up. And all these instances, it isn’t just a brand for brand sake. It’s looking at the opportunity that’s uniquely yours in your field of membership, and thinking, how can we better serve them? What jobs? I call it jobs to be done for those folks, and let’s provide it. Let’s start small with that idea and then grow it.
Doug English 07:55
I love that name, Hustle. That is a fantastic metaphor for the small business life, right? So you created this brand for Vantage West, right? That’s who you said it was, Hustle. They’re going after small, are they going after both sides of the balance sheet, loans and deposits, and are there any metrics you can tell us about how that’s gone compared to how it was going on the retail side?
John Janclaes 08:18
Yeah, it’s early days. They just launched back in April, right? So we’re just getting the word out, and as we normally do, we slow roll. Make sure the experience is just spot on, is perfect, is working exactly the way we want it. And then we’ll go ahead and turn up the marketing and bring in more. That’s where we’re at in that experience. Matter of fact, their CIO Rob Hoyle was just in Las Vegas with us, and we invited folks to two sessions. Sessions were sold out, and we thought we would end the session and be done. And we stayed 15-20 minutes afterwards, just to keep fielding questions. Because at the root of that is growth is a serious problem now, right? We’re getting very stagnant growth in credit unions. We need to find the new engines to help us grow. And this is a very valuable engine. One of the other things we’ve discovered with this is, it’s probably true that your team might not know how to implement new technology. It may be true that your team is busy. Either one of those could be a showstopper for you moving ahead, leaning in and getting the growth. And what we do is we bring the people, the process and the technology to make it happen. When we say we bring the people, it’s like our strategy group to help you find the niche and identify and make sure that it’s big enough to understand what services we need to start with. It includes a call center that will pick up the phone and talk to members or work with them online, if that’s what they prefer. And so, we’re a fully managed service to help you run this. We call it credit union in a box, or bank in a box. In addition to our technology, which is the core banking system, which we’ve extended to include online banking, mobile and member onboarding. So it’s our modern tech stack, real time, cloud native. But in addition to that, you may need other technology to run a credit union, let’s say fraud protection or something like that. We’ve gone out and pre negotiated deals for credit unions, and it’s all on our paper, and we have a whole partnership group, and depending on what we’re launching for you, we can add these other third parties to it. And so all of that is on our paper and in our agreement with you. And why that’s a big darn deal is think about your procurement department. If they had to go out and vet 15 different pieces of technology, how much time would that take? And so, by getting that done for them in advance has been super helpful.
Doug English 10:27
Really neat. So it’s a plug and play system, but then you’ve got your primary core and system running in parallel. How do these things talk to each other? How do you still manage them? Do you look at them totally separately. Do you integrate it? How do you do it?
John Janclaes 10:42
Yeah, the integration point would be at the financial, at the ledger point, right? Every night, you would get a GL readout from us. Or these are the assets and the liabilities of your branch, this new electronic branch that’s called by another name, and that’s really the way to think about it. That’s where the integration point is.
Doug English 10:59
So the membership of the legacy entity might have some closing of accounts as members move over to the digital brand. But I assume the idea is that the net-net is growth.
John Janclaes 11:14
The net-net is growth, deepening the existing relationship, like we talked about with Pillar being a small business entity running in parallel. Because they weren’t servicing those small business members very well. So, keep the retail account, improve the SMB account right for existing members, and now we have outreach of a new digital brand to go win new SMB. So, it’s a little bit of retention, growing an existing relationship a little bit better, and then also an acquisition. On this particular launch, it’s accomplishing a couple things. Sometimes it could be purely acquisition. We just want to go out and get new members, new accounts, new balances.
Doug English 11:50
Yeah, I’m wondering if the digital world tends to attract deposits. I would think very successfully. What about loans? Do you see the auto loan volume and credit card volume come over to the digital brand, or does it stay with the legacy?
John Janclaes 12:06
Yeah, with our existing brands right now, it is deposits first. That is the mission and the need, is acquire the member, get the deposits, and now we’re doing credit cards, we’re doing closed end. And we’re slowly adding into the mix, what is the next product that we need that meets this niche, this group that they need? I’ll share with you. We have a brand called Convoy, and it’s for truck drivers, and the loan product that they needed that was specific to them, as a way to demonstrate do the job that that person needs is invoice factoring. So I’m a truck driver, independent, drop off my load. I don’t get paid for 45 days. Hey, but with invoice factoring, I get paid in a couple days. That’s part of this brand’s promise and why it actually works and resonates with truck drivers, because that’s the job they need to be done. And so we put together these brands. It’s really thinking deeply about that, and then we start adding in the products that we need with generation 1, 2, 3, 4, and away we go.
Doug English 13:01
Really interesting. So factoring is some incredibly expensive method of getting to cash, at least in my experience. So, I assume that from a credit union standpoint, I bet you, we, as the credit union movement, did at a much better price than what they would see if they went to a payday lender or something like that, right?
John Janclaes 13:22
Oh, sure, yeah. We’re delivering that kind of value on loans, deposits or fee structures, yeah, for sure,
Doug English 13:30
One of the other things I thought it was really neat that you’re doing is the CEO sort of coaching work, or maybe it’s inspiring work. I know you’ve got a website for that and talk to us a little bit about that. I’ve seen that happen in the great the great union movement a lot, which is one of the many beautiful things about this movement. That folks are so inspired by the cause and what we’re all trying to do, that they keep giving back. So talk a little bit about your giving back work, and then I know you’ve got some takeaways about some, just general leadership ideas.
John Janclaes 14:02
So, it starts with this idea. Maybe you write a book, or you start a podcast for yourself or for others. And for me, it was for me, this is how I learn. I read, I talk to people, I listen to podcasts. And there were certain parts of knowledge that were unique to what I wanted to do. I need to go curate it. I need to go get it. And so I would call people. In one interview, I was a big admirer of Nestle, about how they do product innovation, called their CEO, and said, hey, can I drop by the office and talk to you? Do you mind if I turn on the microphone and record it so that I can share with others? By all means, go ahead. And I did that at other financial institutions, but I also did it with folks that were outside of our industry, and I thought, now, what if I shared that with everybody else, and just created a podcast, and that was called C suite interviews. And then the other thing I did is I wanted to think deeply about things that I think are important to leadership and credit unions, and so I would write about those things, and they turned into books. I have three books that are out there, and one’s about, how do you decide what to do and then actually get it done. The other book is on, how do you actually develop people so that they can contribute more and become more? And the next book was saying, and this is my latest one, it’s called Partnership Advantage. In credit unions, more and more of the mission, I estimate 60% of it, is done by people outside the organization. And we need to flip from a vendor mindset to a partnering mindset, because I believe if you get really good at that, you can beat the competition. I call it out-partner them, because we don’t have the scale and size. But if the way I run my partnerships, I can do really effectively, then hey, I’ve got an advantage here, and that’s free to you. That’s just a decision about how you want to manage relationships with your fintechs and others.
Doug English 15:40
So that was the Partnership, I want to get your latest book cause that really struck me. The Partnership Advantage? Is that what it was?
John Janclaes 15:48
Yeah, the Partnership Advantage, and that’s on Amazon. And part of it is the book includes, I did a literature review, which I do in all my books. It’s in the back saying, if you’re interested in this topic, here’s everywhere I went to read. These are my ideas, but also the real nugget is all these other people have been thinking about this too. And then the other thing is, I went to the University of Michigan, the business school, and there’s a person there who’s actually measured partnerships and cultures, and his name is Dr. Dan Dennison, and I leveraged some of his knowledge for my book, but I also leveraged it when I worked at Partners, we used his culture survey for a decade. And I said, you know what? How we try to drive culture internally is something that we can flex outside the organization. And that’s what the book is about. And I experimented with that when I was at Partners. We had big partnerships with fintechs and consulting firms, and we did this one project that kind of really set me on fire about technology. And it was this idea that we were moving too slow. We needed to move four times as fast. Don’t do an annual project for the members in technology. Let’s move to semi-annual. Let’s move to quarterly. Let’s move to monthly. Why? Because Chase is putting out technology every two weeks. And they got 50,000 technologists, and when we did a survey of our members, they said, where are you going to go if you’re going to go if you’re going to leave partners? And they said, Chase. And I said, okay, well, then there’s my problem I need to solve for. So, we partnered with some fintechs. We also brought in the Boston Consulting Group, and we put in agile methodology from the boardroom all the way through our tech team. And we went after getting 4x and it took us about 18 months to get there, but we arrived. So you can see my progression as a professional saying, if digital first is where we need to go, and experimenting with that. And now having the opportunity to work on the CUSO side, saying, I’ve learned a lot about it. I’m passionate about it. You’ve got the same problem too. I’m bringing these new capabilities of people, process and technology. What can we do for you? How can we help?
Doug English 17:40
Really, really interesting. Love it. Your latest book, The Partnership Advantage, your latest employment, Nymbus, and then the again, give me the name of your website again, nice and clear for our listeners.
John Janclaes 17:53
Yes, it is theceocorner.com.
Doug English 17:58
Your gift to the industry. Very wonderful. John Janclaes thank you so much for these really interesting ideas. I really think what you’re doing at Nymbus could be something to really make an impact on the credit union movement. So, I’m going to be watching what you guys are doing and looking for further ideas. I want to be able to dig into example after example of how you’re helping credit unions to explode their deposit and ideally loan growth for the future. Very exciting stuff. Thank you so much, John.
John Janclaes 18:31
You bet and I know we’d be happy to have some of the folks who’ve done these solutions speak to from the credit union side how they think about it, if you like, they’d make a great addition to this conversation.
Doug English 18:41
Okay, listeners, you heard what John said, you can count on that I will get that content for you and I will bring it back.
Episode Links
https://www.linkedin.com/in/johnjanclaes/
https://www.filene.org/reports/understanding-the-twenty-first-century-small-business
