Credit Unions Build Cloud Data Strategy to Stay Competitive

Narrator 0:05

This is What's Next in Payments, a PYMNTS Podcast. Forward-looking insights from industry leaders on the trends and technologies reshaping payments and fintech. In this episode, Payments Chief Content Officer John Gaffney sits down with Cody Banks, Velera's SVP of Product Experience and Enablement, to talk about how credit unions that operationalize data and automate decision making will distinguish themselves in payments.

John Gaffney 0:35

Welcome to What's Next in Payments, our February edition of What's Next in Payments. We're asking senior executives to name their word or words of the year. They can't use AI, they can't use crypto, although we have broken that rule. And we're going to explain why it captures the pressures and priorities now reshaping commerce. It's 2026 about resilience, trust, profitability. It's probably about all those things. But our executives are going to reveal what's changing, what's urgent, and what winners will need to do differently in the months ahead. And here with their word or word of the year, words of the year is Cody Banks. He is Senior Vice President, Product Enablement and Growth for Credit Union Service Organization, Velera. Cody, thanks for joining us.

Cody Banks 1:23

Thank you for having me. Glad to be here.

John Gaffney 1:25

I am I'm excited about this. I love working with Velera. Um, so um what what is your word or words and why do you feel like it's gonna shape 2026?

Cody Banks 1:35

Yeah, it's a great question. I I thought a little bit about this, John. And uh, you know, for me, I I'm gonna take the more optimistic tone. I think um, you know, all the things that you just mentioned are important for sure. But for me, my word is intelligence. I think intelligence is a really important word as we head into this year. And and the reason I think that is because I think it's really gonna be uh catalyst for where consumers are already expecting those personalized experiences on where they're at, right? So I think the question for issuers is gonna be what are we still asking consumers to do or make decisions that we could actually make for them or that we could nudge in their place? And so um, as we think about this, as we think about how we we um you know log in and how the intelligence is a differentiator, I think the winners in payments aren't gonna be the fastest or the cheapest or the least risky. I think they're gonna be the smartest. Um, and that really comes down to personalization, uh risk intelligence, data intelligence, uh, and and being able to predict and see those things. So for us, right before the transaction, intent, choice, during the transaction, uh, after the transaction, I think those would be the big pieces that we're looking at.

John Gaffney 2:50

Wow, that's that's a great word. Um and and a great approach to this. So, Cody, my question is um my my next question actually, yeah. I was um I was interviewing um a gentleman executive from Provident Bank, um, a community bank. Uh I don't know if they're a credit union, but they're our community bank. Um but he was talking about the intelligence needed to do those things that you mentioned, like personalization. And we know that that's a competitive factor as well. But is there is there something that credit unions in specific um think of when they when when they think of intelligence? What are the kinds of data or information that they need and that they need to give to their um customers?

Cody Banks 3:36

Well, you're you're you're spot on on that comment, John, about data. It all starts with that, right? Um I I've heard a saying a while ago that said that that data is like oil, um, but you there's a lot of it, but you also need to know how to use it, right? And so um I think that for us is the important question for credit union and for you know all issuers is who owns the data, where is it at? How is it talking to each other? How is it synthesized? And and then how can you then take that the next step based off of a use case and deliver it? So you want to grow membership, great. You want to engage experiences uh to directed at some of those members or targeted at younger members to really, you know, look at that demographic. I think it's really following then to your point, John, those use cases on uh what you're trying to achieve and then mapping where is the data at, and then pulling that into work more intelligently for you, right? Using kind of that ecosystem of intelligent offers or intelligent um nudges, right? Financial wellness nudges. Hey, looks like you're you're saving for a trip. Let's, if you could, you know, save $10 more, uh, here's what you're able to get, and rewarding them, gamifying it. So that's kind of what we're talking about. And we're seeing a lot of credit unions, you know, to kind of dip our toes into those internal use cases, right? Automating the back office functions. But I do think this year we're going to start to see more exposure to that to the consumer.

John Gaffney 5:03

Well said. So, Cody, um, if a credit union is actively engaging with collecting intelligence and acting on it, what do they look like? What defines the intelligent credit union?

Cody Banks 5:16

Yeah. No, I think it it really starts with the the data, starts with a modern technology approach there. Uh for us, I think, and for me, uh, I know what keeps me up at night is just how the path, the pace of how things are changing so quickly. So I think those credit unions that are kind of leading the edge are doubling down on investing and modernizing their technology because we got to make sure once we kind of know where the data's at, we got to make sure it will talk to each other. And so I think, you know, we we see a lot of folks who are investing in a cloud strategy, uh upgrading right to various vendors behind the scenes, whoever you use, but you've got to figure that out. And I think the modernization of the tech stack is so important for this intelligence realm that we're in, because again, that's got to be able to connect the dots. And, you know, that again, there's so many great points of data, whether it's through your online banking, your core, your processor, your other vendors, right, that you're using, that single pane of glass is really important. So choosing the right vendor is important uh from a tech tech perspective, and then having the right um approach to get there, right? We we talked to a lot of folks who are, you know, still used to data centers and on-prem and active, active. And I think the next phase is how do we how do we think differently about it? Uh, to be more in that um, you know, no more servers on-prem, plugging into warehouses. How do we get more in the cloud? And what used to take months is now a right click of a button.

John Gaffney 6:46

All right. Well said, Cody. So, Cody, what are some of the things that most excite you about 2026? And what are some of the things that keep you up at night when you think about the balance of the year?

Cody Banks 6:57

Yeah, I mean, I'm excited about um a few things, right? You know, kind of kind of sticking in this realm of intelligence. You know, I'll talk a little bit about uh what we're seeing in faster payments. I think, you know, certainly it's been around for a little while. We're seeing more and more institutions set up to receive, you know, more, although certainly slow on the send side. But we're seeing more use cases, which makes me excited. And if anyone's following the Fed, right, we're seeing a few of those pop up on insurance disbursements, right? I totaled my car and now I want to, you know, get that replaced immediately, not having to wait several days for a check to arrive in the mail, uh, mortgage, home mortgage, you know, elements of this, uh, as well as small businesses. So, you know, we get a lot of uh we're seeing a lot of use there on small businesses where, you know, let's just say you've got a uh a restaurant that's operating on a low cash margin. They get an invoice that's due at the end of February, the end of the month. Uh, they're typically paying it today, right? And it's getting out of their account a couple days later. Uh, with the future, is as we head more into this faster real-time payments, they can wait to pay that at the end of the month, the date's due. Um, and that helps from a cash flow, even those, you know, certainly those companies and businesses that are relying on that, you know, one, two percent margin, that will go a long way. And so I'm excited about some of those use cases as we're heading into next year. You know, Velera specifically on intelligence, we're we're doubling down. We're gonna new uh intelligent virtual agent or assistant that we'll be launching. So using natural language, predictive analytics to more uh lead to more self-service for our members is really important. And so that's one cool way that we're uh we're investing this year. And I think to your other question, John, around kind of what keeps me up at night, as I talked about, is just the pace of change, right? I mean, things are happening so quickly. Um, and and I think the technology piece is just one where I continue to have conversations with with anyone that'll listen around it's time to modernize that tech stack.

John Gaffney 8:54

Is that where you think your members feel the most pressure in technology? I mean, I know they're pressured to get um younger members, but there's also a lot of pressure on technology, is there not?

Cody Banks 9:06

There is, absolutely. As I I I've been on the road, I've talked to quite a few of them, and I think it's all the above, right? It's the the regulatory, legislative pieces, the pressure on interchange and income, um, but it's also exactly what you just said. It's it's are we set up for success from a technology perspective that'll help us kind of at the foundation do all the things that you and I have been talking about? Um so that that is top of mind and absolutely, I think, just foundational for where we're where we're headed.

John Gaffney 9:34

I want to double-click on part of your title, the product enablement uh part of your title. Great title, by the way, product product enablement and growth. That's that's dynamite. Um, but what are some of the products that you're most excited about in addition to real-time payments?

Cody Banks 9:50

Yeah, I think uh for me, there's a few cool things that we're working on. Uh, one, uh growth, right? I'll stick on that theme, lending. I think lending is has got to be revisited, uh, very uh arduous process, a lot of manual pieces. It goes through a lot of underwriting procedures. And I think it's got to be reimagined. So we've got a digital approach that we are working on here and is in the market where we're really digitizing that entire onboarding experience, whether they're existing members or not, uh, to be able to get them digitally issued cards and member approved and underwritten in under three minutes. So we've seen some really good use cases. One of our clients that that implemented this were looking to grow deposits and uh and loan uh credit card pieces. And out of that, they not only did that, but 90% of the net new cards that were opened were from new members. So they also were able to grow members, which was fantastic. I think, John, the other thing that I'm excited about is small business. Yeah, back to your point about how to replace income and interchange and the compression that we're likely to continue to see there. Um I've seen more credit unions than ever say, hey, small business is a top priority of mine because it's obviously got a lot of great uses, um, certainly more lucrative and has a financial uh end. But how do we serve those members that are already small business owners? So we talked a little bit about that a little bit ago, but that's really where we're doubling down on Velera is how can we help them stay competitive?

John Gaffney 11:18

So before I get to my last question, Cody, I I before I would be remiss to let you go without asking you about being on the road. What are some of the things you're hearing from your members?

Cody Banks 11:29

Yeah, I mean, it's a great question. I think it's it's really um how do we stay relevant? How do we compete? What are the moves that we need to make? I think that it runs the gamut of um what I talked about with you know concerns around the regulatory side interchange, the potential visa MasterCard settlement, the the you know, latest tweet, right? So I think that's that's the important part is how do I, you know, how are they looking at the different levers that they have? And then based off of that um impact, it's you know, what are we going to do to replace it? And that's where, again, lending and sm and small business and you know, different experience campaigns and activation folks, um, I think that's where they're looking for us and for the market to really help guide uh that that perspective. But that's that's kind of top of mind of where they're focused.

John Gaffney 12:19

So for my last question, it's in two parts. Um, for yourself and for Velera, what defines success if we're having this conversation at the end of the year?

Cody Banks 12:28

Yeah, that's a great question. So looking back, I think the end of the year, if we're able to say, John, that that folks took some of those um intelligent uh experiences and started to externalize them. They've moved moved from pilot to more operationalizing to drive those real-time decisions, to mitigate fraud, to add more personalized offers. I think those are probably the three things that I would say uh would be what success looks like. So, you know, getting that growth, getting that engagement of speed and relevance, I think that's exactly where folks are at. And I think it comes in different forms through the online, through the digital, through the branch, through the through the call center. I think it's connecting all of those together, is where you make the magic happen.

John Gaffney 13:15

All right. Well, that's gonna do it for this episode of What's Next in Payments on Payments TV. My guest has been Cody Banks. He is Senior Vice President of Product Enablement and Growth for Velera. Cody, thanks so much for joining us.

Cody Banks 13:28

Appreciate it. Thanks, John.

Narrator 13:32

That's it for this episode of the PYMNTS Podcast, the thinking behind the doing. Conversations with the leaders transforming payments, commerce, and the digital economy. Be sure to follow us on Spotify and Apple Podcasts. You can also catch every episode PYMNTS.com/podcasts. Thanks for listening.