Melanie Kennedy: [00:00:00] COVID shut us down in March of 2020 and I would say January of 2020 we transitioned to which first of all I I can’t imagine that there’s a credit union out there without a digital signature solution.

But if there is, I would say that would be a primary thing to get. So all of our accounts are opened online, all of our loans are done online, all of our paperwork is done digitally. so for us, that was a big thing.

​[00:01:00] [00:02:00] 

Josh DeTar: Welcome to another episode of the Digital Banking Podcast. My guest today is Melanie, the CEO of Southwest Financial Federal Credit Union. You know, a part of me thinks I should start an offshoot series of the podcast called Badass Women in Banking and Tech. I feel so fortunate to know so many absolutely amazing women who are making massive impacts in our industry.

And when I think of this elite group of rockstar ladies, for me, one name always comes up near the top and it’s this amazing woman, Melanie. Melanie describes herself as grateful, which I think is super cool because when I think of her, I think of how grateful I am to know her. She’s somehow this perfect blend of incredibly [00:03:00] caring and thoughtful and kind and yet tough at the same time.

Melanie’s one of those folks that won’t sugarcoat it. She won’t blow smoke. She won’t fluff and stuff. She will give you the real meal deal a hundred percent of the time, but it’s always done with this grateful and caring foundation and always with a positive intent and goal in mind. I find that quality really special and Melanie’s a real pro at it.

Melanie grew up in a family of credit union members and she remembers going into the credit union to deposit her check from six flags in college and asking, Hey, are you guys hiring? And when they said yes, she applied on the spot. And by the time she made it home, she had a call for an interview and what she thought was just going to be a college job until she could get a real job.

has turned into a 30 year passion. She now leads a team of rock stars running the, one of the very few completely digital only credit unions in the country. She [00:04:00] says she’s eternally grateful to this amazing team who helps her carry out a vision while giving her the ability to lend time to causes that support credit unions, the industry, and the communities they serve through things like America’s credit unions and the national credit union foundation.

Now you would think with all that Melanie does, she would have little time for anything fun, but Melanie’s also a super proud mom of an amazing daughter who is a superstar archer. Might I add. and loves running around and chasing her around the farm. And she also finds time to share in the community of Jeep owners, putting smiles on faces with rubber ducks.

So today I get a chance to let Melanie share her story and our credit union story of success as a digital only credit union with you, Melanie, thanks for joining me today. No,

Melanie: I’m going to have you ride all of them.

Josh: I mean in serious, I just, I really do feel genuinely [00:05:00] grateful. I don’t, I don’t know if like, I’m just lucky and have, you know, managed to meet a lot of you all, but like, there’s some really badass ladies in this industry that are just like kind of taking no prisoner and just the way that you approach things and like the mindset that you have, I think is really unique.

 and so I really love getting a chance to talk to you because you know, like I say in the intro, like you’re not going to sugarcoat it. Like you’ll tell me exactly what’s going on, what’s really happening in the industry, the stuff that’s really concerning or awesome. And I know there’s no like ulterior motive behind it.

There’s no like marketing pitch behind it. Like it’s just the real meal deal. so I don’t know, I just, I’ve always kind of appreciated that about you. So I’m, I’m excited to finally have you on the podcast. I feel like this is way too long time coming.

Melanie: Thanks. I’m excited to be here.

Josh: well, so I think before we get too far, I think you have to share, like I gave a little bit of, a tease to this, but I didn’t [00:06:00] understand that this was a thing until you told me about it. And now I can’t like unsee it. But what is this whole thing with you Jeep owners and your little rubber ducks?

Melanie: Yeah, so it’s just, a Jeep owner’s way to say, hey, nice Jeep. Right? It’s a community. Jeep is a community, like other things, but I don’t know any other real car communities. Like if you had an old timey car, right? You’d all get together and hang.

Josh: Yeah,

Melanie: of, kind of the same with Jeeps, except for we might go off a cliff together, 

and that would be fun.

Um, 

Josh: that is why you guys are all so close. Like we could go careening off a cliff so we might as well enjoy the moments.

Melanie: we’ve, pulled some people out of some stuff, right? We’ve helped, we’ve helped each other out in, in ways that most people don’t, so. but really it’s just our way of saying, hey, cool Jeep, I dig your ride. And so, we’ll stick a

duck on 

Josh: do you just literally keep like a big old pile of rubber ducks in the back of your Jeep just in case you run into another cool Jeep?

Melanie: [00:07:00] yeah. Yeah, pretty much. And if you run out, you know what, I’ll re gift a

Josh: Oh, yeah,

Melanie: You know.

Josh: I think it’s kind of a silly, a silly thing to start the podcast with, but I actually think it’s a kind of a cool like symbolism of almost our industry, right? Like, it is so much about community and it’s, it’s finding ways to, improve people’s lives and have an impact on their lives. And to your point, like, How cool is it when you come out of the grocery store and somebody’s left a little duck on your Jeep and you’re like, Oh, that’s cool.

Like some random person thought my Jeep was cool. Like it kind of puts a little pep in your step. Right. And then

other comment, like how many times you’ve, you’ve pulled people out of situations. And so there’s like just the fun element of it, but then there’s the real serious element of like really genuinely being there to help people out.

And I think that’s just such a cool symbol of like, What you would hope community in any sense would look like including credit unions.[00:08:00] 

Melanie: yeah, you’re right. it’s similar when you think about that. You know, all being part of a community, working towards one common goal. Whether it’s credit units and being financially sound, or jeepers and getting over this trail safely. Or just Being together and having a good time

Josh: Yeah, I tell you what, if you ever, well, Melanie, you’ll be at GAC, obviously. but I tell you what, if you, if you meet Melanie at GAC, you should totally get her to show you some of the pictures of some of the crazy places she’s taken that Jeep. You’ve got some pretty, uh, some pretty cool stuff on that photo roll that I’m pretty jealous of.

Melanie: Thank you, it’s it’s a good time it’s a good time

Josh: well, so talking about the credit union, right? So you guys have had a pretty interesting journey. so for the folks tuning in, I’ll give you a little bit of the spoiler, but I really want Melanie to tell you the story of this. you know, a lot of folks when the pandemic hit had to go [00:09:00] virtual for a short time or maybe change some of their strategies to be more digital or, maybe shut down some of their branch locations to be more digital, but Melanie, you and your credit union were on a path to being a digital only credit union before the pandemic hit and almost like epic levels of crazy unpredictable timing lined up and it kind of looks like your credit union just went digital during the pandemic, but this was the plan all along.

So, tell us the story. Like, don’t leave out any details. How did this start? how did it go and how’s it going?

Melanie: Yeah, so I think it was like 2017 or 2018 during one of our strategic planning sessions our board decided that they wanted to be a Non walk in facility That was our term, non walk in facility. And so we’re like, what does that mean? Does that mean we won’t have any [00:10:00] brick and mortar? Does that mean, you know, we will? what does that look like? And so, as we began to define it, it really turns out we’re going to be a digital credit union. So, prior to the pandemic, we had a lease that expired in April of 21. So our goal was to time everything with that lease. So in April of 21, we were planning on being a non walk in facility. we’re a small credit union, so 85 million, 29 employees, and I can’t imagine what it would have been like without COVID, saying,

hey, we’re going to be a digital credit union moving forward. You know, even though our members weren’t walking in, which is what made it a viable solution for us is our members weren’t walking and we were seeing the same members over and over. We were doing things that we had always done, like, as I look back [00:11:00] now, we were closing, we were taking somebody off the phone that was really busy, putting them in the lobby for an hour so that the teller could go to lunch. Why didn’t we just pull like a pharmacy or a post office thing and close the lobby for an hour?

That would have made a lot more sense because we had people calling in during that hour. We probably didn’t have anyone walking in during that hour. So it’s just

things like that that we could really find efficiency in and better serve our membership. And so when COVID hit, we were already prepared primarily for our April 21 move. So

when all the offices were required to close, right? We, just said, okay, let’s all, let’s all go home and work from home. And so it was kind of during COVID that we, I won’t say perfected, but fine tuned what

a non walk [00:12:00] in facility looks like for us. And it really turns out we’re just a digital credit union. So our team, works primarily remotely. our member loyalty team will have someone that goes into the office during the week. They rotate their week. And so, they’ll go in and they’ll check the mail and the night drop and print our checks, mail our stuff. You know, they get to do all those office y things.and come off the phones a little bit while they’re working in the office. And the rest of us all work from home. Serve our

members remotely. 

Josh: So I think a lot of credit unions are trying to figure out, you know, what does that balance look like of how much physical do we really need? Like how important is that to members? What services do you require physical? But I mean you, you cut it to zero, right? So what, what does that mean for your members and what have you seen the feedback be? And maybe just on top of that, like [00:13:00] when somebody does need to do those physical in person things, like what does that look like with your credit union? 

Melanie: So for us, we had to solve for a few things before we could go digital. Thankfully we had been working all those, all that time to get there before COVID hit. right before COVID, so COVID shut us down in March of 2020 and I would say January of 2020 we transitioned to which first of all I don’t, I can’t imagine that there’s a credit union out there without a digital signature solution.

But if there is, I would say that would be a primary thing to get. So all of our accounts are opened online, all of our loans are done online, all of our paperwork is done digitally. so for us, that, that was a big thing. The other thing that we had to solve for was cash,

right? How are, how are you a financial institution [00:14:00] without cash?

 so, and really more so than how do I get money out as how do I get money in. So we partnered with, some ATM providers like Allpoint and MoneyPass ATMs for their deposit taking ATM piece and so now our members can just deposit cash through those deposit taking ATMs. those were the two biggest technologies that we had to really solve for.

Once we got there, you know, everything else is pretty easy. There are still some members who want to walk into a branch. And, for those members we do participate in the shared branching network.

Josh: hmm.

Melanie: And for that we charge our members a fee.

Josh: Hmm.

Melanie: So, just like if you went to a ATM that’s out of network, [00:15:00] you would get charged a fee.

Same thing, if you choose to go to a shared branch, we charge you a fee for that as well.

What kind of things do members go to the shared branches for most often? You know, members go to a shared branch for everything. Sometimes it’s just, that’s the way they prefer to do business

and they choose to pay that fee and that’s okay.

 but we try to educate them that you don’t have to go for anything, but really we get a lot of check deposit, which you can do through digital banking, and a lot of loan payments,

Josh: Huh.

Melanie: which you can also do digital banking.

So,

Josh: Interesting. What would you say is the percentage of Membership that’s still, you know, what’s funny, Melanie is like, cause my dad is the, the prime example of this. I make fun of him on the podcast all the time. Like my dad’s a, a piano technician and still so many of his. customers paying with a check and he will [00:16:00] literally, Melanie, wait until he gets a stack of checks and then drive into the credit union and go deposit them.

I’m like, for the love of all things, holy man, your son works for a company that does all of this digitally. Like just take a picture of the check before you even leave your customer’s house and you’re done. No, no, it’s okay. I really like doing it this way. I’m like, Oh my gosh. So, but like, what percentage of your membership is doing that do you think just because like my dad, that’s just how they want to do it.

Whether you’ve given them the tools or not.

Melanie: I’d say it’s probably a pretty low percentage, 3%, but those 3 percent use it consistently.

So those are probably the same 3 percent that were walking into the branch when we had a branch. Right, but we didn’t make our branch comfortable. Right, so we didn’t offer seating in the lobby. We didn’t want you to stay.

We didn’t offer a coffee bar. We weren’t trying to make you comfortable. Right, those branch, in branch transactions are [00:17:00] incredibly expensive for credit unions. And when you’ve got a smaller staff, one person in branch transaction that should take a minute or less tends to take 20 to 30 minutes.

Right?

Especially when you’re, there’s not a lot of people. If there’s a lot of people in line, right, people understand that you want to go fast.

Right? They don’t want to hold up the line for everyone else. But when there’s not a lot of people, then They tend to tell you everything. You get the whole life story.

And while that’s great for relationship building and there is a purpose for it, that wasn’t the credit union that we really wanted to be.

Josh: So, I really, this is the point I really want to start digging into with you. And, this is gonna sound like, I’m taking shots at you, but hopefully you know me well enough to know that that’s not the case. Because I, I know, I know you’ve got the answer that I’m looking for you to talk through. but, And also this is like why I was so [00:18:00] excited to have you specifically on the podcast to talk about this because it’s like both I get to have the edgy conversation and you’re the personality I can actually have it with is, a lot of credit unions don’t want to admit it, Melanie, and I don’t know how much you’ve seen of it, but it’s hard to be a small credit union right now, right? 

I sit on the board of a small credit union. I’m sorry, but you can’t look me in the eyes and tell me it’s super easy. It’s super easy. It’s hard right now. It’s really hard. You’ve got a lot of pressure. Money is not as easy to come by as it was even just a couple of years ago. We are in an incredibly challenging environment. And you are getting absolutely hammered left and right from the competition. And competition that looks very different than the competition of the past. And so I’m sorry, but small credit unions have got to start thinking about operational efficiency and maximizing their dollar. And you hit it right on the head.

Branches are expensive. Those branch, interactions are expensive, [00:19:00] right? And so. So, if you’re going to have to cut costs somewhere to be a viable credit union, to do the things that you set out to do, right, and we’ll get some time to talk about this, like your personal passion around not just improving like a member’s single point in time financial health, but like their overall longterm health.

Like if you want to be around as a viable credit union to do those things and offer them services that will help with that. Then you got to still exist. Like you got to stay in business. and and that’s what I mean, like that’s hard to do these days. So you kind of made a decision, right? Your credit union said, Hey, look, I get that the credit unions are very relational, that we put a focus on building relationships.

And sometimes that means having a 30 minute conversation with aunt Edna in the lobby about absolutely nothing. But we also got to realize that that costs us money and we can’t keep doing that. So I’d love to get your thoughts on like, what has that now looked like for your credit union? And [00:20:00] how have you been able to still be a good credit union in the sense that you care about your members, that you build up the relationships you have with them, but at the same time focused on operational efficiency so that you’re a good credit union.

Mm hmm. Mm hmm. Mm

Melanie: so,

again, we’re a small credit union. Our membership is spread out between, I’ll say Texas and Louisiana, primarily Dallas and Houston. so even in those two cities, if we had a branch on every corner, we wouldn’t be convenient for everyone. And that’s tough, right? Because you want to be where everyone is.

But we realized that so much of our members can really do everything that they need to do digitally. through our app or online banking or wherever. What they’re coming to us or calling to us for are those big questions, right? Things that they really need assistance with. it’s not usually my app isn’t working or [00:21:00] I’m not able to log in.

It’s usually I had fraud on my account and I need you to help me or I’m trying to do this and I’m not sure how. There’s, there’s still some of that, right? And we’ve been able to think through some of those things like I need to get a check. That’s one of those in branch services. And so, now we’re like, how about you send it through BillPay?

Right? And they can do that. And they’re like, oh, I never thought about that. That works perfectly. Problem solved. And so, we’re teaching our members, too, how to become more efficient in their lives as well.

Josh: You know, that’s, so I’ve always had kind of this, this thought to, I’m curious if you can validate with your perspective. I think a lot of times, like I always use the example of, of checks, right? And everybody says like checks will never die because people still want to use checks because we still need checks.

I’m genuinely [00:22:00] curious if we just woke up tomorrow and said, checks are no longer accepted. Can’t use them. They’re completely useless. Throw your checkbook away. You no longer have checks. People would whine and complain for a little bit, and then they’d figure out that there’s other ways to move money other than checks. And I bet you anything that, I don’t know, I’m trying to think of something that’s both realistic and a little, uh, like clickbait y, title y, but like, I bet you within a couple of months, we’d be over it. Right?

people would accept the gone, but we like, we make them this sacred cow that we’re like not allowed to touch because people would get upset. And kind of like what you’re seeing is like you took the branches away from people and there were probably a handful of people that screamed at you for a little bit. And now they’ve probably kind of quieted down and you’re just operating like you’ve always been this way. Right?

Melanie: Yeah, I would, I would say that there’s less than, I’ve spoken to less than five [00:23:00] members about being a digital credit union.

Josh: Seriously. 

Melanie: those, members weren’t walking in before. They might have tried to walk in once since then. Right, and that’s when I’ll hear from them. I didn’t even know y’all didn’t have an office.

Look, we’ve been digital since 2020. and maybe that’s not the way they want to do business. And, you know, our job is to educate them in all the ways they can. And we may not be the right fit for them. And have to accept that. And that’s tough. Because you want to be all things to all members, right?

Josh: You want to make it convenient for everyone. But, we have to, as a small credit union, Make the most out of what we have and we feel like that this, digital accrediting in life is providing us with some of those things. From another perspective, the work life balance that my team has [00:24:00] now without having to drive into an office and drive home from an office is huge. What? You guys don’t have traffic in Dallas.

Melanie: No, we don’t have traffic in Dallas. That’s crazy. so I’m probably an hour and a half out from the office. So it’s, it’s a real chore to go into the office. Now, to be fair, I moved during COVID. So I moved further away because I had the opportunity. but even before that it was, took me an hour to get to work every day and an hour, 15 minutes to get home.

what that meant was I had to drop my daughter off at school super early or have someone do it for me. and she had to go to an after school program after school. So the first time I picked my daughter up from school was, she was in the fifth grade. And [00:25:00] when I picked her up and I asked her, every day I picked her up from school, I asked her how her day was.

But when she goes to an after school care, she’s like, it was fine. Like, what’s the best part? You picking me up? Great. So now when she gets in the car and I ask how her day was, I get this whole story about everything that happened. All the people she talked to, all the things that she did, what she liked, what she didn’t like.

I get all of this knowledge and information. That alone has been unbelievable.

Josh: that’s

so 

Melanie: then that makes feel guilty for not having been able to do that prior to the 5th grade. But, you know, now she’s in the 9th grade and I can still take her to school and drop her off. And that’s pretty exciting. Really.

Josh: So how has, that was going to be one of my next questions is, so how has your staff taken to this? hmm. Mm

Melanie: our staff loves it. Even the ones that go into the office to save the rest [00:26:00] of us. You know, they give us the opportunity to work from home. So we always make sure that we tell them how much we thank them and how grateful we are for them. Because if they didn’t do that, then we would all be in the office.

So because of their sacrifice, we’re all able to work remotely. And even that team will tell you, oh it’s, I appreciate working in the office because it gives me, a different perspective. You know, that team is on the phone the whole day, from call to call to call. And it’s not always easy calls, sometimes they’re really difficult.

So, that week in the office gives them kind of a breakup from the monotony of their traditional day.

So I think that it’s also appreciated there too. we also, you know, provide a little bit of an incentive for there to help cover some gas while they’re in the office. That’s one of the things that we got spoiled with, right?[00:27:00] 

Being remote, we don’t have to drive, so we’re saving gas money as average consumers. And so, it really helped our paycheck go further, which is nice as well. But I would say overall that, my entire team appreciates being Being able to work from home

Josh: Well, I think proof’s in the pudding, right? Weren’t you guys, like the number one credit union to work for in the country, like two years in a row, the last two years from American banker or something?

Melanie: Yeah, 2023 and 2024 number one best credit union to work for yeah

Josh: It says a lot.

Melanie: Yeah, we’ve been in the top five for several years, but yeah, it is really exciting Yeah, I call us small but mighty right we might be a small credit union, but we’re we’re mighty with what we do and we try to Take that throughout our entire team and throughout our entire membership.

Josh: going back to the, like the work from home, you know, I think it’s interesting. I think the [00:28:00] pandemic forcing a lot of people that had not. ever or traditionally worked at home, kind of opened up just the global eyes to

what from home looks like. And I think there are, there’s, like, I’m not going to put a label on, you know, everybody. I think there’s totally different swaths of people who have different feelings about it, but there’s absolutely a subset of folks that love it. I’m one of them, right? Like I am far more productive and I work more hours at home, but at the same time I get way more time. I mean literally perfect case in point, like Melanie is so awesome and I text her right before we were going to record this and I was like, can we shuffle this around a little bit? You know, it’s the one day in Portland that we’re getting a snowstorm that we’ll get in like a couple of years. And I was like, I really want to go outside and play in the snow with my kids. My daughter, Annie’s never seen the snow. Like I want to be there to see her first time seeing the snow. [00:29:00] And if I was in an office, like I would have never got that. You know what I mean? And so I’m like you, Melanie. I’m like, those little moments that I get, it also creates challenges, don’t get me wrong. Like it’s, it’s weird when I’m like working and I’m like, Hey, now I do actually have to go record that podcast and they’re still playing in the snow and they’re like, ah, you know, dad’s there, but he’s not. But for me, like that, the what it affords me in terms of work life balance is so incredibly powerful to me, but I realized that there are people that don’t love it, but obviously like you have cultivated a culture at your credit union where it’s like, Hey, we want the types of people that, that want to work from home and then we want the types of people that want to work in the office and we just put them in the right roles based on that.

And putting words in your mouth, but I would say that’s, what’s kind of created the successful culture for you guys. Yeah.

Melanie: Yeah, I think so. You know, if you preferred to work in an office, you could come and work in our [00:30:00] office. We have about five offices. They’re not assigned to anyone, right? So you could go sit in the corner office if you want. It’s available because it doesn’t get used. And You know, um, if your power goes out, or if your internet’s out, or if you’re in the area because you need to go to the airport later on, you know, go to the office and work for the day, and that’s, that’s perfectly okay.

We’ve had it happen the other way too, that maybe we had a team member or two that didn’t work as well, remotely, as they did in person. and so, you know, you gotta coach them through it. or coach them out of it. And so some of those team members are, are working elsewhere and some have, some have been able to make the leap to a remote workforce.

yeah, I, I don’t, we don’t have any problems generally. I would also say that we are more productive [00:31:00] and well, gosh, we did two digital banking conversions. A core conversion and a card conversion, 100 percent remote. So, I think that speaks a lot.

And during that time, you know, I was still able to take my daughter to school, pick her up from school.

Now, during the conversion, I will say that I worked a lot night, but I was thankful to be able to get those hours in. After the credit union closed, because without that, I mean, I couldn’t stay at the credit union until 7 or 8 o’clock at night, which is what I might have done beforehand, Man,

Josh: is it just you guys all get together for Terry Blacks? Or how does that work?

Melanie: I need more Terry Blacks in my life is what I need.

Josh: I know, sorry. I like, I think the last time I saw you we went to Terry Blacks and like, now all I can think about is brisket. [00:32:00] You

Melanie: of things. So before COVID, or before we closed the branch, we would celebrate everyone’s birthday in the lobby for a beautiful song of happy birthday. The first time we sang happy birthday over Zoom, we broke Zoom. So we realized real easy that we can’t do that.

And so now we We’ll meet on Zoom. We don’t sing on Zoom any longer, but we do have like a cute like jib jab video Right where we can celebrate whoever’s birthday or whatever it is Through the video we’ll sign and a digital card. We used to all physically sign a card So we’ll sign a digital card and we’ll send a digital gift card Whereas before you’ve got a cake So now you don’t get a cake But you get that whole [00:33:00] cake cost in your own pocket, which is nice, to wherever you choose.

You know, as long as they accept, have an ability for us to buy a gift card, we’ll buy it for you, wherever that is.

Josh: know, that’s another thing I find super interesting is, this is like a total detour, but there’s like these social norms that we’ve decided are like how people want to be celebrated and it’s not always the same. You know, I remember actually, I had a guest on the podcast quite a while ago, Austin Adams, he was the former CIO for JPMorgan Chase and he made a comment that his, it just, it has always stayed with me cause I thought the way he said it was kind of super impactful and he said, You can’t always celebrate people or reward people the exact same way without understanding like what actually motivates them. And he said, perfect case in point. He’s like, I had two leaders underneath of me [00:34:00] that if I told one of them, Hey, if you meet this KPI or whatever, I will get Jamie Dimon to go stand in the middle of time square on a stage with a microphone and talk about how amazing you are. And that one employee would work 35 hours a day tirelessly to make that happen because that would be like the most incredible thing for them. He’s like, and conversely, the other person, if I told them that they’d quit on the spot. They’d be like, absolutely not.

Please do not ever let Jamie Dimon get on a stage and talk about me. Like that would mortify me. Right. And so it is, it’s like, you know, we have these kinds of social norms that it’s like, Oh, it’s your birthday, so we’ll get you a cake. I don’t really like cake, man, but like, you know, just moving to this digital age where it’s easier to be. a little bit more prescriptive. You can be like, Hey, look, I know it’s maybe almost feels less personal and thoughtful to just give a digital gift card, but I’d actually argue sometimes [00:35:00] it’s more thoughtful because it’s like, Hey, look, we’re not trying to put this label on you that you want a cake. Maybe you want to go out and buy a new pair of flip flops. I don’t know. Like whatever floats your boat. Like, we just want you to know we’re thinking about you is the point. I don’t know.

Melanie: Yeah, I think that’s true as well. Now we still have some people who don’t appreciate it, but nobody turns down the gift card, so I’ll say that. And before we were all sharing a cake, so like in July, I think we have like 7 or 8 birthdays in July. And so we all had to decide what kind of cake we want, whereas January there’s one person.

So that one person gets whatever they want, from wherever they want. Cause it’s their birthday. When there’s seven of you, you have to, you know, figure it out. And go with the majority. Try not to offend anyone. It’s hard. but now everybody gets their own and so that’s, that’s good. But we also have like a team engagement meeting.

So that’s [00:36:00] birthdays, right? And so, pretty much, we’ve got one almost every, at least one almost every month.

 so we’ll take that time. Use it to address anything that needs to be addressed. If there’s a one off something, we’ll schedule a specific meeting for it, but we also have a team engagement meeting once a month.

When we have hired a third party to come in and just coach us on creating a better member experience for our membership and what that looks like and how it involves It’s everyone. It’s not just the frontline who has to do it. It’s all of us who have to do it and how, you know, I. T. service or support services or solution services, how all of their service to the frontline team impacts that overall experience for the member.

And so we do have that once a month and then we get together in person like upcoming. we’ve got President’s Day coming up. That’ll [00:37:00] be a live meeting for us. we meet. Usually President’s Day, we actually shut the credit, credit union down for a day in December. And I will tell you that there’s training involved, but really, it’s our annual game of take.

So, it is your traditional Christmas gift exchange. And, how we used to do that in under an hour, I have no clue, because it probably takes us an hour and a half or two hours to get through it today. But it’s a great time for our team to be together. We do talk about some of the, you know, required training stuff while we’re there and in person.

But we do that and get it out of the way and then everything else is just celebrating each other. And then this year we’ll add in a third in person session in the summer. So that they don’t feel so close together. You know, December, February, that’s pretty close. But then from February to December, that feels really far.[00:38:00] 

So we’ve added one in on a Saturday in August. 

Josh: Um, 

Melanie: yet, but it’ll be fun. Mm

Josh: you can, I don’t know. Again, I think this goes back to a lot of, there’s going to be certain personalities that just align to this well and that don’t. And, obviously I can only provide my perspective from. How my personality aligns to it and I I think I’m kind of like you, right?

Like it was like, I don’t really need to go in and see everybody every single day to build that relationship. I found it really interesting. There’s a lot of the, you know, Tyfone team members that, I mean, Prashant, you know, Prashant, Melanie. I’ve met

Prashant and I started at Tyfone almost the same time, so we’ve known each other for over eight years. You know, the first time we met in person was our client conference last year. That was the first time we ever met in

eight years. 

Melanie: that’s crazy.

Josh: And saw each other, like I saw him from across the room and I literally [00:39:00] like Holly or like Hallmark movie, like slo mo ran and like jumping hug. But it was like, but the point is we’d built that kind of relationship where, I mean, I would take a bullet for that man. Um, over Zoom.

Melanie: Yeah.

Josh: like it is possible, it’s just I think you have to think about it differently. It’s different than just going into the office and seeing each other every day and having a cup of coffee together every day. I feel like you almost have to be more intentional about it, but without, at the same time I was going to ask like how do you guys deal with the Zoom fatigue or the burnout of people? so what have you seen from? just how are you guys building these relationships if you’re not actually seeing each other every single day and keeping everybody kind of aligned to the credit union mission and kind of your values without like beating them to death with a ton of team meetings on zoom over and over and over again?

Melanie: Yeah, so part of that is those three in person [00:40:00] days, right? The other part is when it’s a non mission critical Zoom, like a happy birthday Zoom. We try to leave enough time where we’re just asking like hey, what are you watching? Who’s watching what? How many people have seen this? Or you know, who’s reading this?

And so we’ll talk about like those kinds of things and just shoot the breeze. It’s no real agenda. Just checking in on each other. I have discovered though in there in our member engagement trainings that our team is pretty competitive. And we’ve started playing Cahoots there, and that has been a really good, good time.

Josh: What’s cahoots?

Melanie: Oh, Cahoots.

Josh: I’m about to get educated.

Melanie: You are. Cahoots is, like, my daughter plays it in school and she’s like, Oh, I hate Cahoots, 

Josh: Okay. 

Melanie: Cahoots is, um, it’s just an online game, kind [00:41:00] of maybe like Jeopardy, 

Josh: Okay. 

Melanie: You know, you have to program your questions and answers in, but then you can play them for the team. And so the whole team will say, okay, What did we learn today?

Or what’s our, we have three E’s, right? So, our goal is to, engage our members, to educate our members, and to exceed their expectations. So, engage, educate, and exceed. But if you had,explain in there, you know, which one of these E’s doesn’t belong.

Josh: Hmm.

Melanie: Or maybe it was excellence, right? Well, that’s the E that doesn’t necessarily belong.

So, you get points for answering questions fast and correct.

Josh: Hmm.

Melanie: And then there’s a leaderboard, and the leader gets bragging rights. So this week, we just had a member engagement training this week, and we played cahoots as part of that. And our CFO was, the [00:42:00] grand champion of the week. And so he gets It’s bragging rights this week of, you know, being the Kahoot!

champion. It’s fun!

Josh: I’ll have to look at that. speaking of CFO, so how have kind of full circle back to, we were talking about earlier, like it’s hard to be a small credit union, right? What have you seen in terms of how has this major credit union, How has it impacted your operational costs? How has it impacted your budget and your ability to kind of do other things?

And what have you found you have shifted your spend and resources to not having physical branches? Yeah

Melanie: have, well, we haven’t owned any facilities in a long time, we’ve always leased. So we were [00:43:00] leasing a 12, 000 square foot location in Dallas. Now I will say it was not in the best parts of Dallas. So when we moved, we moved to a facility not too too far and still decently central for everyone, but in a nicer location.

And so while it’s a much smaller, you know, it’s probably 75 percent smaller than where we were. The rent didn’t go down by 75%, right? Maybe only 50%. So that’s really the only savings that we’ve really seen so much dollar wise. We deployed, you know, everyone’s got a laptop or an all in one and two screens.

So everybody has the technology at home. Everybody has at least two screens at home. It’s just easier, more efficient. Some of us have three or four screens at [00:44:00] home. We will provide you as many monitors as you need to make it work comfortably for you. And, and really, so every, all the technology is there at home.

We use a virtual desktop infrastructure. So basically on your computer, it’s just the basic programs. and then you have to log in to get to any of your specialty stuff.

Josh: but I mean I would argue any credit union that’s got even just us percentage of their workforce that’s working remote is going to have to have a lot of those things. But I mean, I don’t, I don’t claim to be an expert here, so, you know, don’t, don’t beat me up in the parking lot at GAC if I get this wrong, but I mean, like I would say it’s probably difficult to build a branch for under a million bucks. Then you’ve got to staff it. You’ve got to, Pay for furniture. You’ve got to pay for coffee in the lobby, right? Like you’ve got all the things that go around that you’ve got to have [00:45:00] security cameras. You got all the things that start to add up that you guys don’t have to worry about. And two, I have to imagine that probably takes a big stress off of your plate of not having to manage like six branches and having all of that that goes along with it. Yeah.

Melanie: for some of those larger credit unions or even smaller credit unions with multiple facilities, right? What it was like during, during that, COVID time to staff that with a rotating staff or a declining staff. Our team had COVID, we all just stayed at home. Some of them worked, some of them didn’t.

Right? COVID was one of those things that it, it really impacted people differently. Some people had it, but felt fine. And some people, you know, got it and felt really puny and couldn’t work. So we just asked our team to work, to work to their [00:46:00] comfort level. You know, we weren’t going in. we do have a limited PTO, but it’s really fun that our team Doesn’t like to take unscheduled PTO.

So, 

Josh: Yeah. I mean, those are all the, it’s just, I don’t have the data to quantify it. 

Right. But like same kind of thing. I mean, if I had to go into an office to do my job, I mean, I’m the personality that would go in sick because I’m just going to work even if I’m sick, but I’m not going to go in out of respect for my colleagues because I don’t want to get them sick. Right. But working from home, I mean, I don’t know, you can ask Sibba to look at my HR report or something, I guess. But like, I don’t think I’ve ever taken a sick day. Right. Cause I’m like, I’m sick. I feel like crud. can

either sit on the couch or I can sit at my desk and at least get to be productive. So it’s like all those little things that just slowly add up that kind of keep, give your team the ability to [00:47:00] have just more flexibility to like you say, work to your comfort and the credit unions a lot less impacted than if all of a sudden you had a bunch of sick people that weren’t able to go open one of your branches.

Melanie: yeah, we’re a lot more, I would say, nimble today. Agile. We can do things easier, faster than we could then. Right? Much more mobile. great example. And sometimes our sick days on our own aren’t ours, right? Sometimes it’s our, because our are sick, or our parents are sick, or something. And so you have to take that, but now, you know, my kid could be sick here while I’m here, and I don’t, it doesn’t impact my working job, which is nice.

This, um, couple weeks ago, our area closed the schools because the flu was so rampant,

and they just needed to slow it down some. And so, they shut down school like Wednesday, [00:48:00] Thursday, and Friday of that week.

Josh: Oh, wow.

Melanie: Great. Great. So now I’m, I’m at home, but with, you know, my teenager who just wants to play video games and has nobody to play them with because everybody else is in school.

But, you know, before we were all remote, that would have been a challenge. You would have had to figure out what you’re going to do or you would have had to call in sick because you didn’t necessarily have all the access that you needed. Now? If I were to go into the office, my entire setup looks the exact same in the office as it does here.

So.

Josh: What if, have you had conversations with other credit unions that have reached out to you and been like, Hey, we’re kind of thinking about maybe doing the same thing. Like,

Melanie: unions are, are scared or timid. Like, what will my members do? Oh, I couldn’t do this because my members wouldn’t allow it. And maybe that’s true, but maybe you just don’t [00:49:00] know. Right? Maybe your members are really more tolerable than Um, I know it would have been really weird had we been the only credit union of the first, one of the first credit unions, right, to go digital without COVID, right?

I can’t imagine what that would have looked like, and it probably would have been a different member experience, but because everything went digital during COVID, it just felt very natural after that.

Josh: isn’t that crazy? Like it almost, I don’t want to diminish all the, the bad that came from the pandemic, but like that was a good part of the pandemic for you guys. That kind of, Like, made it a little easier.

Melanie: for us, COVID had a lot of benefits for us, for sure. Operationally.

Josh: Yeah, that’s crazy.

 yeah, I agree. I think that kind of goes back to what I was saying with, you know, if we just eliminated checks overnight, I mean, I think it also has to do with, and you know, I might get, [00:50:00] I feel like I’m starting to maybe pick a handful of fights in the GAC parking lot coming up. But, I think, It also has to do with the type of members that we have traditionally serviced. And unfortunately, a lot of the deposits for, you know, community financial institutions are held with older generations. And yeah, they do still like to go into the branch, like my dad. Right? I

don’t. I don’t.

I don’t ever go into the branch. I’ve got, mid twenties person on my team and he’s like, Oh gosh, I don’t think I’ve actually ever been to a branch. You know what I mean? And so, if you go all digital, yeah, you’re going to tick off some people potentially, but they’re not the next generation of members. I can tell you that. The next generation of members probably couldn’t care less because the reason they’re not banking with you in the first place is they’re doing it with Venmo. Venmo doesn’t have a branch. You don’t go into the [00:51:00] Venmo branch.

Melanie: Right. 

Josh: You know what I mean? So I’m kind of with you, Melanie, like, but at the same time, like I said earlier, like I’m also the one that will argue the point that there is that time where I kind of just really, really want to connect in person with my financial institution. But if you provide me different methods of having that relationship with you, I don’t know. Does it really matter? Oh

Melanie: us. We’ve got people who text us, send us a secure message. You can, call us.

Josh: my

gosh. Don’t tell Erica that Melanie. She’ll probably have us move all of our accounts to you. She literally tells me, I’m just like, I just want to text man. Okay.

Melanie: we’ve, we started texting, oh, this, this is a fun fact, when Game of Thrones was popular. Right? And so, Game of Thrones was on on Sunday nights, so we [00:52:00] would watch Game of Thrones, and then there was a podcast on Monday and a podcast on Tuesday. So we would listen to the podcast, you know, on our way to the office and on our way home.

And, we would talk about it on Wednesday. Well, during those podcasts, they were sponsored by TextLine. So we got into texting through that podcast, and now we’re grandfathered in for some crazy inexpensive price that it’d be impossible to change because I don’t want to have to pay more.

Josh: You know, it’s funny, that’s actually, you bring up another point, Melanie. That’s one of the other reasons why I’ve always loved like your go get them. I put you and Tracy Miller from Pioneer in a really, really similar, similar category. Like the two of you ladies are just. Almost fearless, but not, I want to caveat that, not with like reckless abandon, right?

you’re [00:53:00] looking for your credit unions, but like you’re fearless at being early adopters. And I can’t tell you how many times I’ve talked to either of you two ladies. And you’re like, Oh yeah, I did something before everyone else. And because of that, I got some sweet early adopter pricing, or I agreed to be a, you know, customer testimonial for them or a reference call customer for them because they didn’t have any. And now my little credit union that shouldn’t have been able to afford this. Not only can we afford it, we were one of the first ones in the country to offer it. And I’m like, man, more power to you. That’s such a, I’m actually shocked that less people don’t take that tact of man. Sometimes going with that early provider to you, you’re probably even getting in on some of the cutting edge stuff that some of the folks that are just more afraid to adopt that early on or then missing out on. And not only are they missing out on, but by the time they come around, You’re like, I’ve been doing that for [00:54:00] years and I got a sweet price that you ain’t ever going to get.

Melanie: Yeah, I’ve looked at like changing our plan with that texting and, cause there’s some other cool integrated things that would be nice to have, but it would cost us four times as much as what it does today for that one thing and we’re like, eh. we can

we can keep going like this, you know, we can keep piecing this together, and, but, you know, as AI gets better and better, we’ll be able to automate more and more of those things.

Josh: Yeah. So, okay. Well, let’s open up that can of worms, man. I feel like that. What’s

funny is this, you know, this AI has been like the buzzword of the industry for like the last two years, which one I think is funny because it’s not. Just been around for two years, been around for a lot longer, but it’s kind of been like the buzzword.

I think you and I were even joking at like last GAC that like you walk around and the number of companies that have rebranded or popped up as dot AI is like [00:55:00] hilarious. but like so many people are talking about AI, but there’s also this, I would like to think still a like stigma around AI that like, it’s really bad.

Melanie: It’s not good. It’s not helpful. It’s not that great. But. I mean, I argue if you’re not leveraging some of this stuff, you’re already too far behind. and the rate at which this stuff is getting better. I mean, when I say tomorrow, like I mean actual tomorrow, it’s going to be better. so how are you looking at, especially when, when you are a credit union is so incredibly focused on operational efficiency and cost savings and, being able to put the money where you feel it really matters, which is, you know, some of the programs you guys do for your members for financial wellness and things like that. How are you looking at tools like AI to help improve the efficiency of your credit union? Oh, so just about every big member communication, whereas before it would [00:56:00] start with somebody writing it, and then I would tweak it, and then they would rewrite it, and then we would tweak it again. Now we just start with, we just jump in with AI. We ask AI for it, it’ll provide it, and then we start tweaking from wherever their jumping point is, or refine it from there.

And then, you know, make it ours. It’s always going to be ours. But, I’ll tell you, it’s gotten pretty good. It knows me now as ABC Bank. because I’m not going to share who I really am. I don’t trust it that much, you know, I’m not putting anything proprietary out there. and when you ask it, you know, when you ask ChatGPT who I am and who I work for, it thinks I work for ABC Bank.

And that I did a digital banking core and card conversion. Like, obviously that’s where all of our communication was for the last year.

And so, that’s really what it knows about us the most. But we use it a lot for, for that, for [00:57:00] policies, for procedures, for communications. and then we’re transitioning into like a learning management system through AI.

And, and so members will not members, team members will be able to just inside of our environment. It will be contained, be able to ask, like, how do I process this? Wire and it’ll tell you exactly how to do that. It’ll pull up our actual procedures and walk you through that. and so, you know, it’s just being able to do things more efficiently.

Whereas today, if you have that same question, you’d have to call maybe your supervisor or this member support team. And so now you’re either taking another person off the phone or tying up another team member. Where they can’t do their daily tasks because you have a question about how to do this. So now we’ll be able to self serve ourselves, and make ourselves more efficient just like we’re asking our members to.[00:58:00] 

Josh: Yeah. I mean, that’s a really great use case, Melanie. I love the like internal knowledge library. you know, because You think about just the umpteen million numbers of things that people would have to know about your financial institution. And sometimes that resides in one person’s head. And the more you can extract that out, and this is where, I mean, I totally agree.

I mean, I kind of got into this rant with some folks on LinkedIn, over the last week about some of these AI tools and things. And, you know, people have problems with it, hallucinating and being absolutely sure. of something that is absolutely wrong, and don’t get me wrong, that can happen, but it’s really important to understand how to feed these models and then how, like, there’s going to be, there’s a whole school of thought around like some of the new training and learning that people need to do is learn how to be prompt engineers, like you have to learn how to. how to type into ChatGPT to get a correct response. Like [00:59:00] that’s going to be a skill that people will need to have because yeah, if you put garbage in, you’re going to get garbage out. Right.

Melanie: Sure. And you don’t know what garbage people have put in.

Josh: Yes. So you have to be able to understand what’s gone into it and that it’s right. You’ve got to have guardrails up to keep it from hallucinating and then you’ve got to understand how to actually query it properly so you get an appropriate response. But that is like an internal knowledge library. That is something that AI is really, really good at today, right? I mean, I can go in and I can take one of our digital banking data sheets, right? That’s like. Tons of pages, tons of content, tons of different formats, and I can literally dump it into an LLM and say, I’m just going to start querying you.

And now I don’t have to have somebody read that entire thing or a new joiner instead of calling me and being like, Hey Josh, does our product do this? They can literally just query. And it’ll go search all of these different documents that we’ve loaded in and be able to have that [01:00:00] understanding immediately.

And to your point, not have to tie somebody else’s time up, right? So I think there’s going to be a lot of those types of things that are going to help with even just internal operational efficiency for credit unions and help with things like knowledge transfer. That’s a great use case.

Melanie: Yeah.

Josh: Um,

Melanie: that’s probably our newest gig with AI.

Josh: Really? 

Do you think you were going to see more credit unions that go all digital or transition to very little physical presence?

Melanie: You know, I think we are seeing more of that in the industry. Don’t know how many will be bold enough to go 100 percent digital or 95 percent digital. but I, I do think there’s credit unions out there that are shutting down their lobby so that they just have drive through traffic, right?

And I think that’s part of the operational efficiency that’s being [01:01:00] gained. but then there’s a lot of credit unions, you know, if you build it, they will come and they’re building branches left and right. And that’s their strategy and that’s, that’s okay. That’s okay too. It’s, it’s different. You know, I, I live out in the sticks.

I’d love it if I had a credit union branch out here, right? Because this community really needs it. But I also try to tell them how they can bank remotely and that they don’t really have to have a physical branch right, right here.

Josh: yeah. Well you’ve, so you’ve done it, would you ever go back?

Melanie: Ooh, not if I had, not if I had the opportunity, had the choice. No, I don’t want to go back. I really don’t. you know, we talked about the work life balance and even during that core card and digital banking conversions that we did simultaneously, all three, being remote really [01:02:00] helped in that, you know, I got to spend those eight hours, quote unquote, in the office doing meetings all day.

 but then you still have a job to do after those eight hours are over. And so I was able to have dinner with my daughter and then, you know, start working again or work when she went to bed. And I wouldn’t be able to do that if my primary office was really inside the office. We didn’t already have all the technology set up.

So, no, I, I don’t want to go back into an office. I really don’t. I’m much more productive. Now, I do love people. I’m a people person. So, when I get to events like GAC or somewhere, the National Credit Union Foundation, When I get to those kinds of events, I love talking to people and mixing and mingling.

Josh: The Dallas chapter, the Fort Worth chapter, you know, just going to those events where I can mix and mingle. I do appreciate those, [01:03:00] those things, those fill my spirit so that I can continue on for a little longer. Well, I’m excited to see you, and, uh, before I let you go, why don’t we, uh, give people an opportunity to, if they want to learn more about what you guys have done there at the credit union or talk through kind of that strategy or maybe their credit unions thinking about it. give them some tools to connect with you, but first things first.

So where do you go to get information to stay what’s, or stay up to date on what’s happening in the industry.

Melanie: Well, as an America’s Credit Union board member, I would be remiss if I didn’t say that America’s Credit Union’s Daily News is really my go to. I also hit up the Wall Street Journal, the American Banker, publications. So, I hit, those are probably my three main sources, for the most part.

Josh: And if people want to connect with you or learn more about your credit union, how can they do that?

Yeah, LinkedIn is probably the best way to connect with me. So [01:04:00] just find me there, Melanie. And then, to learn more about the Credit Union, swfinancial. org is our website. Feel free to check us out. But any questions you have, I’m happy to help and work, work through it. I think, teamwork makes the dream work, and collaboration’s where it’s at, so. Well, I know I said it once without any disclaimer. I’ll say it this time with the disclaimer, pardon my French, but you are a total bad ass. 

I thought that then it’s the very first time I talked to you. It’s really, really cool to see like, you know, You just go in guns blazing to do the right thing for your credit union and your members and you’re kind of not afraid to, to take chances and take risks and go left when everybody else is going right.

And I think that’s really cool. and I think you should be really proud of that, like from an outsider’s perspective. So thank you for taking time to come and be on the podcast and to share a little bit of your journey and your story and kind of how your credit union is a very different model in a very traditional industry.

So [01:05:00] thanks for coming and joining me and being a guest on the Digital Banking Podcast.

Melanie: Hey, thanks for having me. It was great.

Josh: Thanks, Melanie.