Two kinds of money – the kind you have and the kind you don’t have.

Two kinds of money – the kind you have and the kind you don’t have.
Posted: May 31, 2017
Comments: 0
Author: Paul Castner

Bob Legters, FIS Chief Product Officer, presents his ideas at CSCU’s 2017 Annual Conference.

“When people think about types of payments, they generally view their money in two buckets – the money they have, including dollars in debit accounts, savings, investments, even rewards points, and the money they don’t have, including the money they can borrow or leverage plus access to other people’s money.” That is one of the thought-provoking concepts proffered by FIS Chief Product Officer, Bob Legters, at CSCU’s 2017 Annual Conference. “If you think about payments in those two categories, how purchases are made depending on which bucket a member uses to pay for something, then you can begin to make decisions to answer questions such as what's the best tool? What’s the best approach? How do you interact with the member? How do you make it more convenient?”

In terms of innovation, Legters said, “Innovation is expensive. Its expensive for the credit union, it’s expensive for the processors, and there’s a curve where the payback takes a while. How do you stay solvent while you wait for the payback? Basic blocking and tackling includes credit, debit, prepaid. Younger generations don’t have wealth or access to money that doesn’t belong to another generation, so how do you put the right tool in their hands to enable payments? You can’t really take a credit risk on someone with no payment history, but you can offer prepaid as a gateway to later offer debit and credit products. You can offer other products that increase the relationship with that member that will drive additional usage.”

“Those are opportunities that are missed by some credit unions when they work in silos - a debit department [the first silo] and a separate credit department [the second silo]. We need to go back and redefine these opportunities and the way we work in ways that make sense. For example, younger people are making more transactions online, so their card needs to be something that functions online – they don’t necessarily need to have to be a $5000 credit limit for someone who transacts around $300 per month. There's a potentially new product to make available from a card capabilities standpoint, and then create that connection with that member.”

“It’s time to reinvent, and if you think in those terms, you don’t end up making a product change, you end up making the right product for the consumer,” Legters said.
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