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LexopApr 3, 2024 4:01:40 PM59 min read

Webinar Recap: Shaping the Future of Collections


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During this session, we navigated through the power of technology in enhancing collections operations while keeping empathy at the core of customer interactions. We highlighted the importance of a more efficient, empathetic, and secure collection process. 

Topics & Timestamps

02:28 | Deep Dive into Automation for Efficiency
08:24 | Optimizing Digital Engagement Channels
16:58 | Addressing the Rise in Fraudulent Activities
26:12 | Balancing Empathy and Efficiency in Communication

36:30 | The Power of Empathetic Communication

39:04 Exploring Tomorrow's Member Experience in Banking


Key Learnings and Takeaways

  • Effectively implementing automation within collections and enhance operational efficiency with streamlined workflows
  • Optimizing digital engagement with email, text messaging and payment portals
  • Learn actionable strategies to proactively prevent fraud incidents, creating a secure environment for members
  • Balance operational efficiency and empathy
  • Peer into the future with emerging trends and consider the pitfalls and opportunities

Read the Transcript:

[00:00:00] Michael Pupil: Good afternoon. Good morning. Good evening, everybody. Thanks for joining us. Really excited to be here today to talk a little bit about the webinar that we have planned entitled shaping the future of collections with fraud prevention, automation, and empathetic communication. So welcome for everybody.

[00:00:21] Michael Pupil: We'll give it another minute or so for people to pop through, but. Please, as we wait for the next 30 seconds or so, feel free to type in your location. This is the first time that you're attending. Lovely to have everybody on for this webinar. We have a tremendous amount of credit unions that are registered for this, which is fantastic.

[00:00:39] Michael Pupil: We have a number of companies from Canada, the United States, and even some from Europe. Which is very cool to see. So it looks like collections and the topics that we're talking about today is not just a us or a Canadian or North American, but being felt worldwide, which is very cool. So today's session first, a quick housekeeping piece.

[00:00:57] Michael Pupil: My name is Michael Pupil. I'm the vice president of sales for [00:01:00] Lexop. True to form. This is not. A demo or a presentation about LexOp or the tool. I'll have some housekeeping items at the end of this session, but today's objective for today, I'm going to be breaking down five topics just at a very high level, talking about effectively implementing automation, looking at optimizing digital engagement channels, fraud fraud prevention for sure, as that's been a massive increase, balancing empathy and efficiency, and of course, envisioning some of the trends for tomorrow's experience.

[00:01:32] Michael Pupil: Now, maybe to start this conversation together, a quick poll question I would love to know, of the organizations that are registered is your Collections or Member Solutions team fully staffed, and does that mean you have open positions that you are looking at hiring, Or do you need more help in terms of FTE?

[00:01:54] Michael Pupil: But is your team fully staffed? And no, LexHop is not a recruitment team, [00:02:00] whether you answer yes or no, this is really just to get a sense of what we're grappling with together as organizations. So I'll give it a minute here while I caffeine myself up.

[00:02:15] Michael Pupil: All right, boy. All right. So of the responses we see here, roughly six out of 10 say no. So it looks like teams are doing a little bit more with less. Thank you for those answers. It definitely puts into place some of the conversation that we have now, most specifically effectively implementing automation.

[00:02:36] Michael Pupil: So for those teams that are a little bit more lightly staffed or have those open areas technology stands a really great chance of doing some of those activities. Help redeploy that work effort into some areas. But how do we do it? Where do we start? If the goal is efficiency, what we're looking for, most spec most specifically if I can get the words out today, is [00:03:00] looking for streamlining processes that have repetitive tasks.

[00:03:03] Michael Pupil: And so first and foremost, every project always starts with an inventory of what is, what are the activities or what are the things that we have currently in the moment, and where is it that we can work out. this piece. I like to call this putting the A player in the A position, the B player in the B position.

[00:03:18] Michael Pupil: That is not a ranking of skill, but rather a position to be played. You want the most complex cases dealt by the individuals that can handle the most complex cases. And so automation stands a really great way of Getting rid of some of those repetitive tasks that can be automated in order to gain more efficiency.

[00:03:36] Michael Pupil: It'll also lead to greater accuracy. No knock on anybody, but to be human is to err. And I think process is put in place. SOPs are put in place in order to reduce that risk because making a mistake is completely natural. But when there is an automated process to that, you greatly reduce the risk of those inaccuracies.

[00:03:56] Michael Pupil: Any automated tool should have the ability to scale. [00:04:00] Otherwise what's the point? And so it's always great to have that crawl walk run strategy, but you ultimately want to be able to get to that run strategy. And so if injuring your inventory, you are looking for some of those repetitive processes.

[00:04:15] Michael Pupil: Is it a scalable one? And is it having the impact that you desire that is alleviating some of the work for those teams and being able to let them handle some of the more high priority transactions that are taking place? The fourth one here, data driven decision making. I remember a couple of years ago, big data was the biggest tagline that's out there.

[00:04:33] Michael Pupil: I think AI has now replaced that as the the most common term used in 2024. But if you are collecting data and not making a decision based on what it is that you are collecting, why are you collecting it? And so there are many tools out there. There are lots of things and lots of data that you can collect, but if you are not driving decision making based on that data, I would argue and you guys can fight me on it as to [00:05:00] why you'd be collecting this.

[00:05:02] Michael Pupil: And ultimately the reason why you'd be doing this is for a better experience overall, a better member experience, a better customer experience, a faster process, an easier process, and hopefully a less costly one. Now the pain points to this, and I'm not going to harp too much on this. I think this is pretty self explanatory.

[00:05:18] Michael Pupil: You're looking for time consuming tasks that are done, inefficiencies that can take place, not only in communication but other inefficiencies in terms of streamlining process, compliance risks, and reducing those, and it goes all the way down Including to bottlenecks and for those organizations that are a little bit short staffed for sure, there's going to be bottlenecks and now as we enter into the summer months, if your team is already short and vacations are coming through I really feel for you and I know that's going to be a challenge that you're probably already thinking of, today so where to automate as much as possible and I am going to lean a little bit more towards the bill collections and the collection side One because alexa up to because that's [00:06:00] the point of today's webinar But you really want to take a look at how to automate your payments and your reminders in terms of communications There are a lot of organizations that we speak to credit unions and other organizations as well That wait sometimes up to 15 days before the first payment Point of communication is sent out.

[00:06:18] Michael Pupil: And there is a tremendous amount of data out there that suggests that you can get involved in communication a lot earlier with your members or for other organizations with your customers in an earlier timeframe without it being offensive or taken badly. And in fact, there's a lot of data that comes out that says that this is something that is being supported.

[00:06:38] Michael Pupil: We have a great survey on that. That's coming up later in about a month or so. I'll get to that towards the end, but you definitely want to take a look at that. You also want to take a peek at trying to automate sequences in terms of workflows. This is your day 15, day 20, day 25, day 30, whatever the timeframe is for that release.

[00:06:57] Michael Pupil: Is it scheduled? Is it automated? And is it [00:07:00] deployable with templates that actually work? And of course, self serving payment options, self explanatory and reporting. Again, here's where your data comes in. Are you making active decisions based on what it is that you're doing? And so if you're working today, With vendors or self made, systems in house and there is no data, a lack of data or decisions is not being based on that data.

[00:07:22] Michael Pupil: I would say that's a great place to start in terms of the inventory that you have internally. Now, the reason why all of this is important and where I started off with the first poll question is Employee burnout. This is absolutely a trend that we're starting to see in the industry. We're seeing that a lot of teams are understaffed.

[00:07:39] Michael Pupil: There is a rise in delinquencies and for some organizations, a significant rise in things like repossessions, which is never a fun experience to go through. And so the idea behind investing in technology is not just from an expense side or that I might be a little bit of a tech junkie, but this is to protect the largest investment of every single organization [00:08:00] who's on this call, which is.

[00:08:01] Michael Pupil: The employees, it's the teammates it's the people that you work with every day. And so nobody wants to go down this road. And so if your teams are short staffed and you're looking at this, I would absolutely encourage to take a couple of moments to run that inventory, to see where you can implement automation into your system.

[00:08:20] Michael Pupil: Now, Not to be all doom and gloom. Hopefully that was helpful. What I'd love to do is maybe transition over to optimizing the digital engagement. And that most specifically is where we bring some expertise to the table. Now the evolution of banking, and some of you guys have seen this before where we started was in face to face transactions, right?

[00:08:39] Michael Pupil: It was opening up brick and mortar that still exists. For the vast majority of organizations, except for the neobanks that are coming out that are digital, which we'll touch on later, but the face to face transactions, I don't think we'll ever go away. Despite all of the advances in AI, I think there is a value in shaking a hand and seeing people eye to eye.

[00:08:59] Michael Pupil: And while [00:09:00] that may be a demographic, that's a little bit lower. I think it is still relevant today and will likely be relevant tomorrow. With the advent of technology, call center came around, of course both agents dialing onto the phone and robo calls that were going out. There's some rule changes that that we're seeing in 2024 for the AI generated robo calls, but Certainly the automated prompts of press one for this, press two for that was technology that was deployed.

[00:09:28] Michael Pupil: And then of course we all went through the dot com kind of piece where the website was now going to allow more self service. And then of course, now that we're addicted to these phones and I say addicted, I think I saw an article the other day that said the average screen time use in North America is up to seven hours a day.

[00:09:47] Michael Pupil: And that's the average and I'm sure there are government graphics that have a higher number than other, but out of all the users, it comes out to about 7 hours per day. And so that becomes an incredibly important channel, not [00:10:00] only for communication, but for advertising and understanding the people that we're working with and ultimately serve.

[00:10:06] Michael Pupil: Now, again, the lean to the bill payment, I'd love to just point out that while the baby boomers sometimes don't get enough respect for being technology enabled, I'm not part of that generation, despite my body probably feeling much older than it is, I will say that the baby boomers engage in a bill payment through mobile channels far more than the Gen Zers.

[00:10:29] Michael Pupil: Now it could be because they make a little bit of a bigger paycheck than they do and have the money to pay for it but the statistics are here. It was you know released by cornerstone advisors kudos to them for running this piece here To give a high level overview of what each demographic You know really engages in terms of the mobile banking and of course those Statistics will probably increase over time as we become more and more comfortable and there is greater security to those channels of communication.

[00:10:57] Michael Pupil: Now, a little bit back to the doom and gloom and a little [00:11:00] bit scary. This is not new. This came out a number of months ago. McKinsey had done a report in terms of looking at repayments and repayment channels specifically for the credit card industry. And now that it's hit over a trillion dollars.

[00:11:13] Michael Pupil: Which in and of itself talk about clickbait for a headline incredibly important. But what you will notice is that emailing and text messaging, whether you are a low balance low risk card holder or a high balance, high risk card holder, email and text messaging tends to be the top two communication channels that will initiate a repayment or how payment is made.

[00:11:38] Michael Pupil: There are of course other channels like letters going out, voicemails, brick and mortar, et cetera. But those were the two channels that that, that are obviously driving the vast majority of payments in the credit card industry. Now, this came partly from one of our surveys that we did last year, but we're noticing that roughly about 60 percent of calls go [00:12:00] unanswered.

[00:12:00] Michael Pupil: And there's a lot of great companies that are out there that try and help amplify the connect rate, but it is becoming a harder and harder statistic to connect with people. If you manage a team or you're part of the collections group within your organization or member services that phone call.

[00:12:15] Michael Pupil: Connect rates, that KPI has decreased. We find that two thirds of people are not picking up regular mail on a daily basis. And so that will trail over a period of time. But from a positive side, there's roughly three out of four people that prefer to engage in an online payment. Anyway, whether they're late or not.

[00:12:34] Michael Pupil: And so all the signs are pointing towards that digital channel. Not that we need to abandon some of the more traditional channels. Those will always be needed, but there is a, an increased emphasis on those digital channels. I added this only because I thought these were super funny. I saw the baby yelling at a phone saying representative.

[00:12:53] Michael Pupil: I am totally guilty of this, especially when I am on the line with an airline trying to [00:13:00] fix a flight or do something. And there's a lot of automated processes in there. And I just need to talk to a person because then they're going to get it. They're going to understand what it is that I'm going through or the anxiety that I'm having to make some changes.

[00:13:11] Michael Pupil: The same is to be said where financial needs are some of the most sensitive topics that you can get. And so understanding me is the first step in terms of an empathetic approach to communications, which we're going to dive into later. And so maybe I should have had a poll question here asking everybody, have you ever screamed into a phone customer service representative or just get me to a person, please?

[00:13:34] Michael Pupil: And I would have loved to have seen that percentage that's in there. But speaking of the traditional channels versus the digital channels and where they're running in that same McKinsey report that was outlining the credit card debt and repayment channels. What they also did was looking at customers that were 0 30 days past due on those bills.

[00:13:55] Michael Pupil: What were the preferred channels for those members or customers to engage in a repayment? And what you [00:14:00] saw in every single case here is that the digital channels. outweighed the traditional channels in both partial and full payment. And I'm slowing down my speech on purpose for that because it's that impactful.

[00:14:13] Michael Pupil: And so again, I'm not advocating to get rid of brick and mortar, the phone calls that go out, the letters that go into the mail, but I am absolutely advocating that you take a look at what The digital channels are that you have employed today to communicate with your customers and members in order to offer things like partial and full payment in order to work with them to keep that relationship healthy.

[00:14:36] Michael Pupil: And any sign of a healthy relationship is always based on communication. So are you communicating in the channel that they prefer? Not that you prefer. I know we all want people to act in a certain way, but sometimes we have to cater as to what they want us to do. Now, I've been harping a lot on the digital first contact strategy I think that there's a lot of data out [00:15:00] there for a lot of different organizations that will point into this.

[00:15:03] Michael Pupil: And so I'd always encourage everybody to do their own research as to where they are trying to meet in the digital first contact strategy and what options they are providing. You know to their members and so I would break it down into three very simple tools One you are three simple categories one you want to invest in a very user friendly digital first tool it has to be user friendly there needs to be the balance of risk versus User usability if you make things too hard to engage in you will get abandonment make it too easy You invite fraud and so finding that balance will be unique for every organization that is on this call And for those that haven't been able to make it but investing in a user friendly digital tool is absolutely critical You need to be able to implement proactive communication strategies in those preferred channels.

[00:15:55] Michael Pupil: And so there will be channels that I will respond to much faster, much more [00:16:00] effectively than others. Finding out which one is my preferred channel is your job. And then that way you communicate to me in that way so that you can get ultimately what it is that you want, which is things like repayment or engagement as a whole.

[00:16:15] Michael Pupil: And then third, but not least is leveraging data and analytics for decision making. When are you sending out these messages are the messages that you're sending out effective and what is the effective rate? It's running all of the key performance indicators to everything that you're doing when you send out a message Do you send it at Monday at 10 o'clock or Tuesday at 11 o'clock?

[00:16:34] Michael Pupil: And is there a difference between the two or am I just being super silly and trying to make an argument for no reason? The only way to tell whether that question is correct or not, or if I'm just being nitpicky is data and so if you don't have it to be able to make that decision, then I'd say that you have a gap, run a test internally to try to figure out how to close that gap.

[00:16:58] Michael Pupil: I'm going to switch into [00:17:00] fraud prevention. Now I'll throw another poll out here. Did you experience an increase fraudulent activity in 2023? And of course, is that trend following in 2024? I'll pause again for a little bit more caffeine to keep the energy up and I'd love to see what these poll results are going to be

[00:17:32] Michael Pupil: a couple more seconds here

[00:17:44] Michael Pupil: a little too fast.

[00:17:53] Michael Pupil: All right, let's see what the results are here to go through 87 percent say yes. [00:18:00] 13 percent say no. Wild statistic. And not surprising, unfortunately, but with the advent of technology and new channels, always come new risks, new threats. Love to play a quick little video here. It's only a minute long, but I'm going to press play here for everyone.

[00:18:18] Michael Pupil: I am not Morgan Freeman. What is not real. At least in contemporary terms, it is not. What if I were to tell you that I'm not even a human being? Would you believe me? What is your perception of reality? Is it the ability to capture, process, and make sense of the information our senses receive?

[00:18:44] Michael Pupil: If you can see, hear, taste, or smell something, does that make it real? Or is it simply the ability to feel? I would like to welcome you to the era of synthetic [00:19:00] reality. Now, what do you see?

[00:19:08] Michael Pupil: Alright, I'm going to pause there. It goes on for some of that thematic music, that very dramatic music. Synthetic reality or it definitely is coming through, and so looking at something or having this zoom, am I really me, now starts to become a question. But long before we get to that, And that is going to be the next wave of potential risk and fraud, especially with the advent of the AI and being able to have this synthetic reality, be able to interact with us in real life is going to be a big problem.

[00:19:42] Michael Pupil: And you'll see that's going to come up. It's about a year. I'm not. Sorry about that, but going back to what today's pieces and the 87 percent or the almost nine out of 10 of you that had marked that fraud had gone up it's still the traditional or traditional, it's still the more [00:20:00] traditional methods of things like phishing scams outreach that is not real.

[00:20:05] Michael Pupil: Attempting to get or to gather access to systems that they have not been authorized to do or to be able to drive payments into individuals that are not supposed to be getting payments. And so organizations have to train both internally employees in order to keep their heads up, as well as their customers and their members not to engage in third party communication or even phishing scams where they're pretending to be from the organization.

[00:20:32] Michael Pupil: And this continues to be a growing problem. Problem, especially as the digital channels become more and more effective. And so not that I have a global solution for this. Nobody does. That's why it continues to be on the rise. What I would say is that when you are engaging in vendors, I would always probably suggest to look at organizations that have a white label privately branded solution, instead of trying to employ third party messaging that's in here.[00:21:00] 

[00:21:00] Michael Pupil: Avoid systems that are moving you to a whole bunch of different screens. And of course I may Be removed off the christmas card lifts for some of those organizations that would take the counter Opposite to this and there are some great organizations out there that do the opposite of what i'm saying DocuSign is a great example You get a DocuSign, you DocuSign the agreement, and it goes into DocuSign land.

[00:21:23] Michael Pupil: And it may be fully employed by a credit union, a bank, or another organization. But I've always tended to fall towards more of the privately branded scenarios, because the relationship Especially on the credit union and banking side is between the customer and the credit union or the member in the credit union, the customer and the bank.

[00:21:41] Michael Pupil: And so why share real estate with another with another organization and introduce another party to be had on a different conversation. But, of course, the inventory run of what communication are you sending out? How is it being intercepted and how are your members getting [00:22:00] affected and what are you doing to help prevent that engagement that is going down the wrong path?

[00:22:05] Michael Pupil: And so those are questions that I'll throw out to everybody in order for you guys to run that inventory as well. Of course, leading off of that, NCUA had come up with some reporting guidelines that when this happens and some cyber security incidents happen, what the reporting process should be and the documentation to this, it becomes incredibly important as it happens.

[00:22:26] Michael Pupil: Everybody internally in the organization needs to be able to document, be aware of, and follow process in order to reduce the risk. I don't think, unfortunately, we will ever get to zero but we certainly don't want to see a 90 percent increase. for organizations that are seeing or feeling an increase to fraud activities.

[00:22:47] Michael Pupil: And so where to start? This is where we've started to pull some best practices from some other organizations and some fraud experts, but first and foremost, it's establishing those clear policies and percentages. Procedures [00:23:00] for handling sensitive information that continues to be the number one piece.

[00:23:06] Michael Pupil: I would always encourage that if you're looking at vendors that are handling any information when it comes to members or customers, that they are SOC 2, type 2 compliant, that you take a look at their security procedures. What are their SLAs and what are their standard terms in terms of handling member information or customer information.

[00:23:26] Michael Pupil: To a mechanism to report suspicious behavior and not necessarily to act on every point of communication that we get. It's funny, a couple of hours ago, I got a phone call from a local number, being Amazon, that apparently I had bought an Apple Pro and iPad and, earpods and all the rest of it.

[00:23:45] Michael Pupil: Press one if this is not me. And of course, they're going to try to get some information. So having that reporting structure and forwarding those numbers off to get them blocked is important. Conducting regular audits. This goes back to the term that I was using before, run your [00:24:00] inventory as to what it is that you're doing, where are your vulnerabilities and where, and what are you doing to plug those vulnerabilities?

[00:24:07] Michael Pupil: That's an incredibly important step. And then fourth is the trust, but verify rule. And so if something is out of the ordinary training all of us, that if all of a sudden I am requesting funds or money or for you to do something, and that's a one off it's weird, it hasn't happened before the trust, but verify either call the back, the person try to contact them in a different form and really run the inventory.

[00:24:33] Michael Pupil: Is this real? Or is this not? And so I think that is going to become much, much harder with the intelligence and the ability for things like deep fakes and AI to really, if they have access to that information, be able to tell what is real versus what is fake. Now to come combat this member education, most credit unions that have been onto the website have something dedicated on the website, not just for financial literacy, but also [00:25:00] fraud prevention, which is great.

[00:25:01] Michael Pupil: Kudos to you other organizations that are part of this webinar. I would encourage Go take a look at a local credit union, see what it is that they're doing in order to do that. Providing secure channels for communication where if there is fraud that is, being done. And this is obviously unauthorized transactions.

[00:25:18] Michael Pupil: Where do they report it? Make it easy for the members to engage into that. Monitoring member accounts. So there's lots of technologies out there that will try to pinpoint irregularities to the transactions that are taking place. Highly recommended and then of course providing less friction for members to provide personal information Can we get the transaction completed without having to open up everything about this and that's a tricky one how do you validate who the member is versus the transaction to take place?

[00:25:49] Michael Pupil: And it again is if you think of that scale The harder you make things the lower the engagement, the easier you make things, the more risk of fraud and [00:26:00] finding that balance. Like I said, you'll probably never get to zero, but what would be the amount that we are a little bit more comfortable with and while we're still trying to tackle that issue.

[00:26:12] Michael Pupil: I'm going to flip into one of the last talking points here, which is the empathy efficiency balance. Thanks. Now, Lex up is a very large believer in empathetic communications. I think that is what makes us human and kind to be honest. So the first question that I, or the first question, in this section, but poll number three that I'd love to ask you guys is does your organization provide communication training?

[00:26:39] Michael Pupil: Now this could be at the beginning of the first hire. Is it done annually? Any type of communication training that is done. It doesn't necessarily only have to be in. Collections be great if it is but does your organization invest in training on an annual basis for communication?[00:27:00] 

[00:27:03] Michael Pupil: All right. Let's see what this is. Yes. I love that Nearly 8 out of 10 Said yes to this and so this is fantastic 77 say yes 13 percent or 23 percent say no, that is a wonderful statistic that's there. I think it's incredibly important and most of the, like I said earlier, most relationships success depend on healthy communication.

[00:27:28] Michael Pupil: And so we constantly have to be learning about how to speak, especially when it comes to the generational differences between All of us, we all use language a little bit differently, and if you're not speaking the same language, it becomes incredibly difficult to connect. And so I'm not even going to try.

[00:27:48] Michael Pupil: I've got older and younger colleagues of mine that when I start to use some of the language that the younger generation starts to use. I get teased very quickly. So I'm not gonna, I'm not going to do that [00:28:00] today with you guys, but designing an empathetic approach all starts with the assessment of a member's unique financial situation.

[00:28:08] Michael Pupil: The definition of empathy is to understand and feel what the other person is going through. And so you have to understand the unique financial situation of the member in order to be able to take your first step in an empathetic communication. It is not just simply a transaction, it is an understanding of what that individual is going through or individuals are going through in order to figure out how to overcome whatever obstacle they are facing.

[00:28:37] Michael Pupil: Is in their way. Now, it could be a repayment. It could be planning for financial needs in the future. It could be retirement, buying a house, whatever it is, what is the individual situation of or the unique situation of that individual communicating with members regularly with empathy, building trust and rapport.

[00:28:54] Michael Pupil: The key word to this section here is regularly. Now we do [00:29:00] in a prior life my first job out of college was with Royal Bank of Canada. It was wonderful. I had learned how to invest in mutual funds. And I was doing my securities exchange here, North of the border. And one of the things that was taught very early is that.

[00:29:16] Michael Pupil: Your needs may change over a timeframe. And so events like getting married, having a baby retiring, like these massive events doesn't have to be a massive events when they, when you age. Your situation may change, your job history may change, your goals may change, and so that word regularly, or communicate regularly, allows you to keep that pulse check.

[00:29:40] Michael Pupil: on the members in order to make sure that you are aligned with the goals or the struggles that individual is going through. That in turn will build that trust and rapport. Now, I'm going to get a little bit of pushback from everybody and say we have a staff of X. [00:30:00] We have Number of members or customers as y and that y greatly outpaces the x and so how Do you build rapport with absolutely every single person the cold honest answer to that is you're not going to be able to Because not everybody is going to want to have a relationship with you like that across the board But if we go back to the first section in today's webinar about That automation and efficiency, you will quickly start to learn who just wants this to be a cold transaction to take place so that I can get from A to B.

[00:30:35] Michael Pupil: And who are those individuals that want to engage in a deeper conversation, a deeper relationship. Now, some of those transactional. Individuals may turn into a warmer communication the moment that they run into struggle or have a goal. And so this is where automating tools will allow those that just need to get from point A to point B effectively [00:31:00] efficiently, and cost effectively, leaving the rest of the team to handle some of those more complex conversations.

[00:31:07] Michael Pupil: That's where you build that regular communication and that rapport building, of course, options being provided to them. It's all about options. If you don't offer any, you are at risk for loss of that relationship to an organization that offers more options because the one that you're giving me may not satisfy the need that I have.

[00:31:29] Michael Pupil: And so you can't offer everything to everybody, but having the majority of options. Available to your demographics is important, and the only way to understand what that is, if those decisions are being driven by data, right? What is your, membership telling you? What are they requesting? We all want them to behave a certain way, but they all behave their own way, and it's finding that balance in between the two.

[00:31:58] Michael Pupil: And then of course, last but [00:32:00] not least, adapting your approach. This is not going to stay the same. Brick and mortar would have been great to stay in that entire time. I would love to go back maybe 100 years and then tell them that we're doing everything on this little device and blow their minds.

[00:32:14] Michael Pupil: But as time changes, the preferences and the adaptation needed to be there. About 10 years ago when I was in mobile app security, I can remember some of the biggest objections from organizations was we already invested in a website. What do we need a mobile app for? That's silly.

[00:32:35] Michael Pupil: Today, the usage on a mobile app for a basis some of the activity on a website for some industries, not all, but certainly for transactions, making it as easy as possible on that mobile device in an app without having to type in www dot. You see where I'm going with this. And as time changes, I'm sure the mobile app will also become something that takes too long to do.

[00:32:59] Michael Pupil: And [00:33:00] maybe it's wearables where we blink twice and we open up our banking app. Who knows now why empathy matters the most, especially with all of those changes in terms of demographics, the different types of communication, the different types of everything that is out there is that when you communicate with an individual in an empathetic manner.

[00:33:19] Michael Pupil: You decrease the stress level of that person. Emotions are some of the hardest things to manage, both internally and externally. And when emotions start clouding judgment, it becomes incredibly difficult to be able to overcome whatever it is that we're trying to discuss. And so if you're able to decrease that stress level.

[00:33:38] Michael Pupil: What you will absolutely see is an improved member satisfaction, not only a score that you can measure through the MPS score, but what you will start to find is members being actively loyal and promoting the credit union or the company that they're working with in order to gather funds. New members or new customers to that piece.[00:34:00] 

[00:34:00] Michael Pupil: And no knock to any of the organizations that are not credit unions, of course, Lexop tends to work more specifically and closely with credit unions. But I can't tell you the number of conversations that I had was recently at GAC, how many credit unions have either stagnant or decreasing memberships over the last couple of years and gathering.

[00:34:22] Michael Pupil: And attaining new members to their ranks. And when I say new members, engaging members and loyal members, the way that a credit union was born is starting to become a problem with some organizations. The magic pill, I think a couple of years back was engaging heavily into indirect loan portfolios for automobiles.

[00:34:43] Michael Pupil: That has become a significant point of pain for some organizations in terms of repossessions and delinquencies. But the bigger. Opportunity that I think is a little bit heartbreaking is when I speak to some credit unions about the engagement plan of that indirect loan [00:35:00] portfolio who walked in to buy a car.

[00:35:02] Michael Pupil: And now all of a sudden they're a member at a credit union, but their primary financial institution is somewhere else. What is the game plan to try to get them really engaged into the credit union? And unfortunately there seems to be a pretty, pretty big gap there for many. And in the engagement with the credit union members that you have, if you're able to communicate with empathy, decrease the stress level, improve their satisfaction of working with you, what you will see is not only that loyalty, but an active champion of what it is that you're doing and can you bring in some new people.

[00:35:40] Michael Pupil: The last piece here the benefits of an empathetic approach, better member satisfaction, stronger trust, a positive perception and enhanced member loyalty. I think that just echoes some of the comments that I've mentioned before, where I think this actually really holds weight. Is that every single credit union that I've come across [00:36:00] engages very highly in a geographic location, not only for volunteer work, a lot of philanthropic activities, a lot of charity work that, that takes place.

[00:36:09] Michael Pupil: And so I would love nothing more than to see. Organizations invest into technologies to not only help their their teammates out the employees of the credit union or the organization to be able to free up some of that time so that they can engage in a lot of those activities. I think it's what makes, excuse me, credit unions special.

[00:36:30] Michael Pupil: And I'm a full supporter of that now, the benefits on the credit union side. It is a business at the end of the day. Now, when you do something, there should be a knock on effect for all sides of the coin. What you do see, and the data suggests this, is that you will have higher recoveries through an empathetic communication platform rather than the reverse.

[00:36:52] Michael Pupil: What you will see is lower defaults. Positive reputation and more productive teams. And the more productive teams is really where I'm [00:37:00] pointing at when it comes to all of this. It's not just on the member side and the bottom line side, but it's also about that team side of things. And so the knock on effect is a pretty real one, and it stretches all the way across the board.

[00:37:12] Michael Pupil: And the reason for it is this. Being Canadian, I'm a pretty big hockey fan, as you can see in the background. But there is a coach in the NBA called Greg Pavovich, who is the head coach for the San Antonio Spurs. I've mentioned this a couple of times in my talks. Apologies for those that have seen this more than once.

[00:37:28] Michael Pupil: But I'm a fan of him. Maybe not the San Antonio Spurs, but I'm a fan of Greg Popovich. Not only has he won five national titles, a terrific winning percentage, an Olympic gold medal there is a story that goes back to In 2013, where the San Antonio Spurs were in game six, they were about to win a championship and they blew it.

[00:37:50] Michael Pupil: They blew it. They, were up. They choked. Now that evening, Greg Popovich took out his entire team. The supporting group. [00:38:00] Locked themselves away and he went table to talk to the players because I think he knew that Falling apart right at the end. It was going to be insanely difficult to rebound back into game seven And ultimately they ended up losing game seven, but he cared about his players so much That experience for the players is the thing that they talk about most in their career, especially with their coach.

[00:38:25] Michael Pupil: And sure enough, you can't even script this, in a Hollywood script, or maybe you can, but the next year they ended up winning the championship and the team for the most part stayed intact, even after that devastating defeat. And Caring about your team, the biggest investment every single organization makes is in the people that work for that organization.

[00:38:47] Michael Pupil: And so all of these things, while it may be pointed towards efficiencies and the return on investment and driving decisions based on data. The data that I'm telling you is that the teams are the most [00:39:00] important and that's where some of these considerations need to take place.

[00:39:04] Michael Pupil: Now, last but not least, is tomorrow's member experience. So if we went through that fun journey of all the different options, I would love to ask all of you what is your preferred channel to communicate when executing a banking transaction? So it could be a bill repayment, it could be anything, transfer of money, all the rest of the stuff, what do you personally prefer to do?

[00:39:33] Michael Pupil: I'll give it a minute here,

[00:39:37] Michael Pupil: so everybody goes through, and apologies if I'm a little out of breath, I'm still coming over that cold that everybody seems to have gotten, and hopefully the voice hasn't been too bad today.

[00:39:53] Michael Pupil: All right, we'll give it another 15 seconds here just to see what the result is going to be.[00:40:00] 

[00:40:04] Michael Pupil: And here we go. So we've got 6 percent in person, 11 percent on the phone, 11 percent on the website, 72 percent on the mobile app, and 0 percent on other. I'm with you guys on the other one. I have no idea why I added other in case somebody had something that was clever, but you can see here. Now the demographic obviously pointing towards the mobile app totally makes sense.

[00:40:24] Michael Pupil: If But this is exactly why you cannot get rid of your website. You cannot get rid of phone calls. You cannot get rid of the brick and mortar. You are still servicing a number of your constituents that deserve to be, served and in the channel of choice. And so what that other is going to be, I don't know.

[00:40:43] Michael Pupil: I think we all have some ideas behind it. I know personally, I have seen a number. I'm going to talk a little bit more about that in the next couple of sessions reported into some things, and we'll jump into that. But here is why I asked this question and why it's so important now, traditional banking versus digital [00:41:00] banking, the, metrics that I'm going to come with here, and this was done by J.

[00:41:04] Michael Pupil: D. Power, is that 66 percent of traditional financial institutions reported being, or 66 percent of people using traditional financial institutions reported being satisfied. Two out of three. That's not bad. It's not great. It's okay. Whereas 27 percent who use online banking only reporting 88 percent satisfaction rate.

[00:41:30] Michael Pupil: That is a humongous difference. And while online only banking is still a minority of the overall, you actively see that the satisfaction rating is much higher. Now, if anybody has ever looked at those NPS scores and the NPS is the net promoter score. It's that very simple question of how likely are you to refer this product or service to a family member or a friend, anything above an eight or nine, I think, is that you're going to actively promote it.

[00:41:59] Michael Pupil: Okay. [00:42:00] You're going to speak on behalf of that organization or that service or that, that tool, and you're going to tell other people to use it. Anything under that, up to about a six. And it's doesn't matter. I'm not going to talk about it, but I'm not going to actively move away from it. Anything below a six becomes detractors and they start to speak negatively of the product or service that is being offered.

[00:42:23] Michael Pupil: And you're going to actively move people away from using that tool. And so this is where understanding the satisfaction rate of The services that you're providing and how that is being perceived by your customers and by your members is so incredibly important. And if in the case of credit unions, you have a challenge of bringing up the membership or at least stabilizing it and not having negative growth to that, then you need to be able to make sure that the NPS score for members is an actively recruiting one.[00:43:00] 

[00:43:00] Michael Pupil: And so measuring that and taking a decision on it is incredibly important. And that's a powerful, that's a powerful piece here. And that's not a plug to any one particular strategy or technology. That's just a human nature type of piece. Now, where we've been seeing in this other category, Is I'll break it down into these four categories here, meeting your customers or members in the metaverse was something pretty hot in during the COVID time, it's died down a little bit.

[00:43:29] Michael Pupil: Will that come back? I have no idea. I remember that there was a craze of people buying real estate in the metaverse for a ludicrous amount of money. I don't know if that was the greatest investment strategy, but who knows? It's always time that tells as to what is going to work out and what is not.

[00:43:46] Michael Pupil: Kind of leaning on NFTs. That was also a thing for a little while, those smart contracts that were supposed to come through. Will they come roaring back? Maybe not. I'm not here to give advice as to which one is going to go through. I just know that here are some of the [00:44:00] potential other categories that are coming through.

[00:44:01] Michael Pupil: Metaverse was one, NFTs were another. AI, streamlining customer experience. This too was a fantasy kind of idea. If you just rewound the clock only about a couple of years ago, but then through the developments of it, now there's a lot of organizations that are seriously contemplating and some that have even implemented AI communication with their customers, with their members.

[00:44:23] Michael Pupil: And I'll jump into that in a little bit. And then the last piece is wearables. Wearables and banking, if we are on these things for seven hours and on screen time in a day as an average. What are the other ones that we could potentially use like a watch or other wearables like glasses et cetera.

[00:44:42] Michael Pupil: And can we execute transactions on those devices? What are the risks? What are the rewards? And now we go through the same process that we go through with every technology that is released. So it's a never ending piece to this. Now, AI, like I mentioned, [00:45:00] is the biggest tagline that is coming through now.

[00:45:04] Michael Pupil: I wish I'd added a poll as well as to who's investing into AI or who's implementing into AI, but just to break it down very simple, the definition of AI, there's a lot of terms that are being thrown out there and some are just make no sense. Some are contradictory. But AI is the simulation of human intelligence.

[00:45:20] Michael Pupil: And when I say the simulation of human intelligence, it needs to be able to speak, read, see, hear, and move. And those are the actions that can take place and we all immediately start to, think about some of the technologies or some of the things that we have in our everyday life that has the ability to do that.

[00:45:40] Michael Pupil: I don't want to say the word, Hey, G O G L E because. In about two seconds, I'm sure it's going to start to speak to me, and I know for a fact that it's happened on a lot of people's calls in the background where either music starts to play or in that they're asking for, some pieces. So the hearing [00:46:00] and the speaking is there there's a lot of movement in robotics in order to help change moving things, even like facility management and stuff like that, and it's starting to go into the banking sector.

[00:46:11] Michael Pupil: And it's no doubt with teams that are short staffed, can we execute simple conversations powered by AI to help the individual get from point A to point B? I am immediately reminded of the little baby screaming into the phone that was the whole point of press 1 for this, press 9 for that, press 0 for this.

[00:46:34] Michael Pupil: That was supposed to fix all of the automated problems of communication and go through it. It helped, but it didn't solve. It wasn't a magic pill that solved it. Now, will AI be that magic pill? Maybe, not. I think time is is going to need to be run a little bit longer to go through.

[00:46:51] Michael Pupil: But I certainly don't believe that this person is coming through to change the entire world. I'm not that pessimistic about the technology. I'm rather actually [00:47:00] optimistic about the technology and I think it'll help a lot more than it will hurt. That being said I did find an article in December where there was a car dealership in California that decided to implement AI in the chatbot and engage with potential customers.

[00:47:17] Michael Pupil: Now the customer, to make a long story short had interactions with the chatbot and it was powered by AI to get the AI to agree that the customer is always right. And so once it got AI to agree that the customer is always right, the budget for the Ford one 50 that they wanted to buy was only a dollar and that it engaged in a written contract and it got the AI to agree.

[00:47:44] Michael Pupil: Now, this is a pending case. I have no idea if this person actually got the truck for a dollar, but. This dealership no longer has that AI chatbot in place. They took it down because of some of the risks. And so listen, there, there are always [00:48:00] risks in engaging new technologies. It's part of that piece that I was mentioning about, the crawl walk run strategy.

[00:48:06] Michael Pupil: whether the tool has been around for 20 years, or it's been around for two minutes, the crawl, walk, run strategy in terms of scalability and what problem you're trying to solve is the first piece of this inventory of why did they need this type of technology to interact with customers? What was the gap and what were they trying to fix?

[00:48:25] Michael Pupil: And so this might have been one option that they considered, or are they just jumping onto the hype train and implementing something a little bit too fast without the right type of oversight, increasing the level of risk. And so that would be the assessment that I would consider for everybody else. Now, AI is powered by data.

[00:48:43] Michael Pupil: I talk a lot about data, but data can also be a little bit misleading. And again, apologies for anybody that has seen this little piece to this but this is still one of my favorites. And for those that have never seen it, I'd love to play this little game with you. We're going to take demographics [00:49:00] from member A, and we're going to take data sets from member B, and we're going to play a little game here.

[00:49:04] Michael Pupil: And so what we're going to, what we're going to look at is we're going to pick a member and member is going to be. a male. They're going to be born in 1948 so that you can put some demographics to the generation that they belong to. We're going to say that they've been raised in the UK to get a little bit more of a background in terms of where they come from.

[00:49:22] Michael Pupil: The individual has been married twice over his career or over his love life. They live in a castle, which will shrink this this demographic a little bit more, and they're incredibly wealthy and famous. And so I'll leave you guys with member A to think about who this is. And of course, member B, we're going to also look at being a male born in 1948, also raised in the United Kingdom, married twice, lives in a castle and very wealthy and famous.

[00:49:51] Michael Pupil: Now, by all standards, in terms of demographics, information and data, we should be making the same decision. [00:50:00] However, member A, for those of you guessing that hadn't seen this before, is King Charles. Now, member B, on the other hand, is Ozzy Osbourne. And I can imagine that speaking to both of these individuals, while I don't know them personally, would probably be a little bit different than whatever it is that we're coming up with as a template.

[00:50:21] Michael Pupil: And in my opinion, Persona shouldn't be about the demographics, it should be about the struggles that each person goes through. is going through. And so in one of the earlier slides about assessing what each individual is uniquely going through, being able to assess that and then provide options and communication is absolutely the key.

[00:50:41] Michael Pupil: And to be fair, who knows, maybe I'm completely wrong. Maybe King Charles and Ozzy Osbourne are exactly the same and they communicate the same way. However, if I had a chip to put on the table, I would probably say they need a little bit of different communication. So just to throw a wrinkle in all of this that we're doing [00:51:00] while data and process is great, this is my kind of caveat of saying, while AI is going to be fantastic, I think that there is still common sense from the, human individual that needs to be employed.

[00:51:14] Michael Pupil: And that is why we go through training. That is why we have training. A culture in each one of our organizations. And are we fitting within the common sense and execution of what it is that we'd like to do? And that's where I'd like to flip now to maybe some of the housekeeping items towards the end.

[00:51:31] Michael Pupil: So that concludes this piece here. What I will, I alluded to our customer survey. We do every year, a customer survey of Lexop. Customers specifically trying to decode the preferences in banking and bill payments, the prioritization of bills, when and how and why the communication will work.

[00:51:53] Michael Pupil: And so we are scheduled to have that new customer survey be launched in a couple of weeks here. So we're very [00:52:00] excited about that. We'll probably have another webinar to it, so if you're interested in it. Drop your, email into the chat in order to see that so that we can get it over to you.

[00:52:09] Michael Pupil: If you are interested in Lexop, shameless plug to Lexop you can scan the QR code that you see here. You could reach out to us if you are interested into what it is that we do and how we do it. And of course, this is my most favorite one. What are the other topics that you would like us to cover in future webinars?

[00:52:26] Michael Pupil: And so I have had the privilege of speaking at a number of different conferences, events, chapter meetings, webinars none of which have been specifically about. Lexops tool that we leave onto the side. But if anybody is interested in additional topics that you would love for us to tackle, we'd love to hear it.

[00:52:45] Michael Pupil: And so with that, I'm going to conclude and say, thank you. I will check the chat and QA piece here that if there are any questions happy to send them over or to address them with you guys. Of course, this session is being recorded. [00:53:00] So for them, any of you that want to revisit this or send it over, I'm happy to do and you can get the slide deck pretty easily. So I'm going to open up the QA piece here and apologies. I'm on like four different screens. And let me just peek. All right. Is it best to wait until after we finish upgrading our core to implement a new collection technology? That's a great question.

[00:53:31] Michael Pupil: It depends. I think the answer depends on the collection technology. It actually, I love this question and thank you for sending that. Uncharacteristically, I think there's been a larger than normal conversion of cores than I think I've seen in the last couple of years. Don't know what it is. I can't speak to that, but it's definitely a project and not going to be a simple one.

[00:53:55] Michael Pupil: Now, the collection technology that you have, I think one of the challenges that most financial [00:54:00] institutions and credit unions, of course, face is that there are so many tools. Technologies that have either been purchased or that are being purchased that never had the intent of communicating with one another and making sure left hand speaks to right hand is a challenge.

[00:54:15] Michael Pupil: And so what I would say is that you, I would ultimately, lean towards. the ability for solutions to stand alone on themselves while still being able to update other systems. And that is the, that would be the precursor to everything that I would look at. If you are handcuffed or bottlenecked because of one system and it'll stop multiple others, I don't think that you're getting efficiency there.

[00:54:46] Michael Pupil: And so I don't think that the answer is wait until the core is done unless the system that you're looking at absolutely needs to wait until after, but then I would also question as to why they would, [00:55:00] have to do that. And so I can see the argument going on both sides. Terrific question.

[00:55:04] Michael Pupil: I think very situational would love to reach out to me. Let's put the cards on the table. I don't think that's a Lexop piece, but if you wanted to talk about that as a theoretical conversation, I would love to, Tackle it from the vendor's point of view to give you a little insight as to how we see things.

[00:55:24] Michael Pupil: Here's another question. How do you recommend building a business case, getting executive approval for these products? That's a really good one. I think any solution that an organization invests in has to have a very clear, defined business proposal as to what is the problem that you are trying to solve.

[00:55:49] Michael Pupil: That's first and foremost. The second piece is that I would lean towards those systems that are not a pure solution. Expense or [00:56:00] investment or cost or whatever the word is that you want to say, because if you are moving or investing into a tool, it is to replace an outdated or gap process that is still being done today, but just ineffectively.

[00:56:15] Michael Pupil: And so there are costs to managing a broken workflow or an older tool, and that cost will now be translated to the new investment. And it needs to be spelled out very often when, organizations are looking for budget that tool costs 50, 000. The 50, 000 is not a true net cost. The better business proposals will also outline and itemize while we'll have a reduction of costs of 20, 000 from this workflow, 10, 000.

[00:56:49] Michael Pupil: That workflow, and perhaps at the end of that evaluation, you are net positive that 50, 000 investment for that tool actually gets you a net [00:57:00] positive. Of the budget overall, because you are eliminating inefficiencies that are far more costly. Those business proposals are the ones that not only tend to get approved faster, that get funded by the group quicker, but they are also championed by various departments.

[00:57:19] Michael Pupil: There is almost no organization out there that just buys by themselves without having a conversation with anybody. IT needs to be involved. The finance needs to be involved. The business experts are the subject matter experts and the line experts need to be involved. And of course there's going to be a ripple effect to all of them.

[00:57:36] Michael Pupil: So if you're affecting positively to the group and the group all sees this. All of a sudden the priority to implementation of that tool starts to increase. So not only are you buying into the right tool for the right reasons, you are getting to use it in a faster, timeframe. I've yet to see an IT team at any organization that I've worked with just be waiting for an implementation of a new technology [00:58:00] and procurement just saying, Oh yeah, we have nothing on our list to review.

[00:58:04] Michael Pupil: For sure. Yeah. I don't think that exists. So great question. Happy to jump in with the, business case. We do it often. It doesn't even have to be Lex up if you just wanted to bend our ear in terms of what to do and how to look at it. Happy to, dedicate some time to you guys. And then the last but not least here, what are the best practices for smaller budget conscious, Or is to approach the adoption of these technologies.

[00:58:32] Michael Pupil: So just because technology works really effectively, it should not necessarily equal high cost. In fact, some of the best technologies that are out there are actually pretty budget friendly. And so I wish I had an answer that was. Five or left or right. It's not a pointed one.

[00:58:52] Michael Pupil: We have to work together in terms of what the business case actually is. And this is a great follow up question to that piece. What is the business case? What is [00:59:00] your budget that you have? What is the current expenditure of cost of loan servicing versus what is the technology going to do and how is it going to affect the group?

[00:59:11] Michael Pupil: And I don't. Don't think that you necessarily need to drive the most expensive car. You drive the car that meets your needs, that falls within your budget. There should be no difference between the cores that are being used, collection softwares that are being used. There is no difference.

[00:59:36] Michael Pupil: You, you need to assess the tool that can do the most or all of what it is that you're doing with the budget that you've got. And so that assessment, there is no shortage of competitors that are out there. It's just, where do you find them? And what do you, look for? So again, if you need a little bit of help here, I'd be more than happy to to jump into it.

[00:59:57] Michael Pupil: Great questions. It took us right to one [01:00:00] o'clock on the nose. So I am going to be respectful of everybody's time. Thank you for joining me today. Thank you for the questions. Thank you for the engagement. And we really look forward to speaking to you again soon. Hopefully today's session was helpful for many of you.

[01:00:13] Michael Pupil: Thank you very much. Bye bye.



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