Four Views on What ‘CUSS’ Is All About

UNDERGROUND Thriller Coverage

LAS VEGAS–Four people who were among the first to raise their hands in support of creating an ambitious new credit union shared services model—one that is specifically aimed at boosting the competitive prospects of smaller CUs, especially via technology–shared why they did so and offered an update on what’s ahead during a discussion here.

The initiative, announced in July of 2024 by Mitchell Stankovic and numerous other credit unions, CUSOs and other companies, is called Credit Union Shared Services, or CUSS. Mitchell Stankovic has described the effort as one designed to “unshackle credit unions from the burden of legacy technology so they can move forward the industry vision for excellence in member experience in a big way.”

While open to all credit unions, it is especially aimed at smaller CUs for which the costs of technology have been prohibitive and created a doom loop in which those CUs can’t grow and therefore can’t invest in technology. That scenario has left many smaller CUs with older core systems that are in some cases obsolete.

The Objective

Mitchell Stankovic led the creation of the CUSS Working Group, which has brought together technology experts and credit union industry leaders that seeks to:

• Define a native language, cloud-based core
• Develop a sandbox of additional solutions that will effectively serve small, boutique, de novo and large CUs
• Be scalable
• Have a reasonable initial and ongoing cost
• Be accompanied by strategic advisory services designed to “help credit unions embrace the new offerings and benefit deeply from converting.”

The Participants

Participating in a discussion on CUSS during the Underground Thriller meeting were:

• Liz Winninger, president/CEO of Xtend
• Rahul Kumar, VP and GM with Talkdesk
• Steve Bone, president CEO with Member Access Processing (MAP)

The session was moderated by Chad Ritchie, CIO with Ventura County Credit Union, who was recently named to be the new CEO at Matanuska Valley Credit Union in Alaska.

Short-Term, Long-Term Objectives

Ritchie noted that the practical work involves the creation of a tech stack that can be leveraged by all CUs, but especially smaller CUs, and is based in part on a similar model that is already in place in Canada.

But there is a larger, longer-term objective driving the initiative, he said.

“If we can get this right we stand to be incredibly relevant in the future and we stand to have the industry as a whole be amplified and uplifted to the ability to do these kinds of things,” he said. “Right now, there are small credit unions that are struggling and they can’t have the same services available to them that the larger shops can. This is not equitable but it should be, and this is a group that can come together and figure out how to do this.”
While numerous CUs, CUSOs and third parties are involved, he encouraged others to join in the effort, as well.

Ritchie noted discussions around bringing ideas into action, especially shared services, have been ongoing, and CUSS is a real live example of that.

‘Something We Need to Do’

“This is something that we need to do. It’s what I often refer to as dramatically increasing speed to market, because that gives us relevancy and I think this is a very important thing,” said Ritchie. “If we can’t be there when our members need us to be there and in the way they need us to be there, we start to become irrelevant. This is an issue that credit unions as a whole are potentially facing, because we are behind the times with technology and we haven’t been able to innovate at the pace that we want to.”

It’s critical with new generations of consumers who have different expectations of service delivery, according to Ritchie, who said those same consumers now question, “Why is banking so hard?”

He acknowledged what CU leaders already know—building electronic financial services offerings is complex and complicated—but “there are generations coming up that have different expectations.”

‘How Can You Possibly Compete?’

The answer to those expectations, he and other panelists said, lies in shared services.

“If you’re a smaller credit union, how can you possibly compete with the billion-dollar-plus credit unions that can bring these experiences to market?” asked Ritchie. “Shared services is a way that we can do that.”

Ritchie said the panelists joining him were the first to invest in, support and provide time to a new shared service model, in this case, CUSS.

The Big Question

But why do so?

Xtend’s Winninger called the shared service model something her company “lives and breathes.”

“We believe it’s not that success is not critical to an individual organization; it’s critical to an ecosystem and as a group of organizations we believe in interdependence,” said Winninger.

The CEO, whose CUSO is owned by 102 credit unions and which has 400 clients, said it is based on the concept of one owner, one vote and on the idea of owning the technology being used, with funds staying inside the credit union community.

The 22-year-old Xtend offers a variety of solutions, including a contact center, mortgage servicing, bookkeeping, marketing, data analytics, member onboarding and more. Three-quarters of its clients have assets of less than $100 million.

The View From a ‘Credit Union Lover’

Talkdesk’s Kumar said as he has come to work with the industry he has become a “credit union lover.”

“We offer technology for credit unions to offer the best member experience, to give members a choice in the way they want to engage,” said Kumar. “Our goal is to give you a platform that can plug into your ecosystem…It can be any permutation or combination of the technology that exists in your ecosystem.”

Like Ritchie, Kumar said it’s all about improving time to market.

‘Painful’ At Times

“We are interested in the shared services model because what has been painful to me at times is, what is the definition of a small credit union? Do they do anything different than a bigger bank?” asked Kumar. “They offer the same banking products. Maybe they offer better service. When we show them the platform, they get really excited about it, but then the economics come into play. It’s like ‘We really like this technology, but I don’t know if we can afford it,’ or ‘I don’t think we have the resources to manage it.’ The shared services model gives us the option to allow credit unions, irrespective of asset size, to eliminate bad experiences.”

The CUSO Viewpoint

MAP’s Bone said he is a strong believer in the shared service model because he has seen its value in the form of CUSOs, with MAP being the third with which he has been involved.

The 25-year-old MAP, which began its life as part of the then Washington Credit Union League, will serve any credit union of any asset size, according to Bone.

“You have to do a lot of math and the math in the payment space shows the more volume you have and the more you spend, the more money the brands give you,” Bone told the Underground Thriller event. “If you don’t have that then the only way we’re going to be able to service you is to really truly focus on service. To do a lot of the hard things in the middle at the services layer to me was a really good challenge. That was the challenge the owners gave me in taking over.”

What Makes for ‘Small?’

Bone defines “small” credit union as those with $200 million assets or below. He said he has told representatives of Visa and MasterCard, which are facing numerous challenges on Capitol Hill with interchange, that smaller credit unions can help the card processing companies because interchange supports most small credit unions.

“We want to be a force for good,” he said. “It feels really good to have a role in some of the stories that some of these credit unions share about how they serve their members, how they use debit and credit to actually help people in real ways.”

That’s a key driver behind his support for the shared services model, Bone said.

The ‘Ideal Future State’

Ritchie asked each of the panelists for their views on what the “ideal future state” of the CU shared service model would look like and how do you fit in?

“Technology is not disruptive, what you do with the tool is disruptive,” responded Winninger. “We’ve seen some organizations in the Michigan area where it feels very inauthentic in how they’re trying to create a shared resource model. What they’re doing is they’re saying, ‘Join our credit union and we will manage you from a managerial perspective and you’ll keep your brand,’ and it hasn’t worked and then they merge them in.”

What works better, Winninger stated, is an organization that looks like the CUSO model, organizations that “believe in you and with which you can have success.”

The ‘Real Mile Marker’

Kumar said he views an ideal future state for CUSS as one that allows smaller credit unions to assess and access technology by considerably “simplifying the load” of doing so.

“The data is going to be there because you’ll have value cases from organizations similar to yourself,” Kumar said. “I think that’ll be a real a mile marker for this initiative.”

Dealing With the ‘Reality’

MAP’s Bone noted no single credit union is going to move its entire platform to the CUSS platform, “even if we get it right. So, we’ve got to help with integrations, implementations, and vendor management, because the reality is when we nail it, when we get a platform that really could be the platform for the future, no one’s coming all over in one fell swoop.”
To get to that point, he said, will require a lot of coordination and business processes to be figured out in addition to the technology.

‘A Piece at a Time’

“I think the ideal future state will be something where we have the entire platform, but we can also help you get there a piece of the time,” Bone said. “A lot of that will depend on the lungs, the heart, the mind–the core and the online banking–the big pieces that you have to move sequentially and you pick the sequence, There are some complexities there that we’re going to have to wrap our heads around as well as having the platform itself.”

Want to learn more?

Attend our next UNDERGROUND Collision to learn more about CUSS (Credit Union Shared Services) and how it can make a difference for your credit union.

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