How 3 unique financial institutions approach continuous transformation

Allegacy Federal Credit Union, Stockman Bank & Teachers Federal Credit Union

How 3 unique financial institutions approach continuous transformation

NCR Voyix Digital Banking

Customer Spotlight

Ashley Kohlrus, COO, Allegacy Federal Credit Union

Kevin Guenthner, CIO, Stockman Bank

Suresh Renganathan, CTO, Teachers Federal Credit Union  


Every bank and credit union measures success differently. And how they approach their digital transformation journeys may also be unique. But regardless of their goals, at the heart of every transformation is the consumer.  

At NCR's 20th annual Innovation Conference last November, we met with executives from three diverse financial institutions with three different approaches to transforming, modernizing and future-proofing their institutions. And despite whether their efforts are focused on improving the digital experience, digitizing the branch, breaking down silos or automating processes, two themes persisted in each of their stories: elevating the customer experience and nurturing their relationships.  

Here are three unique stories from Allegacy Federal Credit Union, Stockman Bank and Teachers Federal Credit Union on how they approach continuous transformation.  

Applying data to think beyond members' current needs

Allegacy Federal Credit Union

Allegacy Federal Credit Union opened its doors 55 years ago, and today has 18 locations and nine student-run credit unions throughout North Carolina. Its digital journey is nearing its 20th anniversary with NCR, with its digital transformation more progressively beginning in 2017, at which time Allegacy recognized digital as a strategic line of business.  

Allegacy's approach to continuous transformation involves making data-driven decisions and thinking beyond its members' current needs. It also requires ensuring its digital experience is easy to use and supports its entire customer base, including high-net-worth individuals.  

Ashley Kohlrus, COO of Allegacy Federal Credit Union, said over the past several years, the credit union began challenging itself to think about its members' "unknown and unmet needs." In other words, the things members might not yet know they need.  

Kohlrus talked about how the credit union regularly consults with experts outside the banking industry to help the team understand what's happening in retail, hospitality and other sectors. She said the credit union recently met with a leader in the grocery industry who talked about the concept of "pick and prep." With this model, shoppers can pick out their fruits and vegetables, then bring them to the deli counter to be prepped and cut while they shop—saving them valuable time. Kohlrus said this is a prime example of providing a service a consumer might not know they need, but once they utilize it, they realize the convenience and simplicity it provides, which keeps them coming back.  

She went on to say, in banking, a good example of an unknown, unmet need is the credit union's integrated teller machines (ITMs) and its mobile check deposit feature. When Allegacy rolled each of these out, people didn't think they needed them. But fast forwarding to the pandemic, they became a necessity. Once people started using them, they realized their convenience and continued using them as part of their everyday banking. Kohlrus added that NCR helps keep them ahead of what's coming and thinking about these unmet needs.  

"We like to talk to NCR often. Our day to day can cause us not always to be thinking about what's coming in the digital landscape," said Kohlrus. "So, we make sure they're helping us think ahead about what's on the horizon."  

In addition to its dedication to identifying consumers' unmet needs, Kohlrus explained that making data-driven decisions is also critical for all its efforts. The credit union established a new data warehouse and analytics platform through its partnership with NCR and Google Cloud. Through these efforts, Allegacy has become a more data-driven company and is using this platform and its predictive analytics to identify its members' unmet needs. This is a living project with many phases that Allegacy plans to continually expand upon into 2023 and beyond.  

Allegacy also participates in NCR's profitability analysis twice a year to see where it's driving profitability in digital. Kohlrus said that the study is also helping the credit union evaluate what features and solutions it can add to drive stickiness and where it can boost profitability. She also noted sometimes that means implementing a fee for certain services, like with its new HSA platform, to balance profitability with convenience.  

Breaking down barriers to growth and innovation

Stockman Bank  

Founded 70 years ago by five ranchers, Stockman Bank is the largest family-owned community bank in Montana, with 35 full-service locations across the state. The bank is uniquely focused on the state of Montana, bringing comprehensive banking products and services, state-of-the-art online and mobile banking, wealth management and insurance services to its customers.

Many banks and credit unions have historically operated in core-centric environments where they've been dependent upon their core providers' digital banking solutions, strategic roadmaps and release schedules. As a result, it's become difficult to keep up, differentiate and stay competitive. And it's proven to be challenging and cost-prohibitive to integrate new features from other lines of business or third-party providers.

Like many financial institutions, Stockman wanted more control over its digital banking experience and, ultimately, to be more agile and forward-thinking to serve its customers better. The bank also needed the ability to innovate and differentiate at its own pace, aligning with its strategic priorities and not those of its core provider.

Kevin Guenthner, CIO of Stockman, said that's why, several years ago, the bank decided to break that dependency. And that's when its real digital transformation journey started.  

Stockman spent the first three years of its journey moving away from a core-centric environment to make its infrastructure and architecture more digitally capable. This involved migrating to a new digital banking platform and digitizing internal processes. And it also required a culture shift to embrace a digital-first mindset.  

The bank brought in NCR early on in its transformation journey with its conversion to NCR DI Digital Banking as a solid platform to leverage and build upon for the future. Additionally, the bank partnered with NCR to help change its underlying architecture and build an integration layer to make it easier for the bank to integrate new services from other lines of business and third-party providers.  

As a result, the bank is no longer dependent upon its legacy systems, roadmap or release schedule to bring forward the breadth of features it needs to better serve its customers.

Guenthner said the bank looked at several new digital banking platforms but that, in the end, it was looking for a partner. One that would give the bank the flexibility to go in the direction needed or augment with third-party solutions but not do whatever it wanted. "That gets messy," he said.  

"Because we have visibility into how things work together, we can make changes in what we call the process layer of our integration, how that data is flowing," Guenthner said. "And then we can create business logic to accommodate those changes that we hadn't anticipated. The aftermath and the ability to do it showed us we could really make a difference."

He added that the bank is still very much about its communities. And he noted that if there's a challenge, solving that challenge with technology is undoubtedly part of the equation, but the most significant factor is how to take a branch-centric organization that is really about community and in-person interactions and turn that digital. He said that's where the bank is focused and that it's leveraging digital technology not to replace these experiences and interactions but rather "to augment and build that sense of community."

Accelerating growth through high-tech, high-touch engagement

Teachers Federal Credit Union  

Teachers Federal Credit Union is a not-for-profit, member-owned financial institution with 32 branches and over 5,000 shared service centers. It's the third-largest credit union in New York. And because it's one of three credit unions with a national open charter, it has members across all 50 states.  

In 2019, Teachers set the foundation for its digital transformation. And over the past few years, the credit union has deployed many digital features, extending the NCR DI Digital Banking platform to deliver connected experiences and frictionless journeys to its members. The credit union also introduced robotic process automation to achieve speed, efficiency and scale. And as a result, it has automated over 1 million mundane manual tasks.  

Suresh Renganathan, CTO of Teachers Federal Credit Union, said these innovations and execution of a digital transformation strategy along multiple fronts earned the credit union Celent's Model Bank of the Year award for 2022—Celent's top honor.

He said that during the pandemic, the credit union rolled out appointment banking, whereby members could make appointments digitally and meet with a banker virtually. This enabled a safer banking experience when in-person interactions had to be put on hold or were limited. He said that service alone has brought in over 36,000 appointments per year.  

Renganathan also shared that the credit union extended the NCR platform to improve its onboarding processes with a new digital account opening solution and a refer-a-friend program. The new digital account opening solution allows members to open accounts digitally, significantly streamlining a once manual and partially paper-based process. And in just a couple of months, the refer-a-friend program brought in 3,400 new members and $4 million in deposits.  

Renganathan also commented on the credit union's focus on data and how it generates value from its data. Teachers created a strategic plan to build an enterprise data platform that enables access to meaningful data quickly and provides consistencies that eliminate computational and human errors. The credit union also integrated multiple data sources to build a data lake, a centralized data repository to store structured and unstructured data at any scale. And it has also implemented analytics and reporting capabilities for better business analysis and decision-making.

"I'm very excited for 2023," Renganathan concluded. "The word transformation means there is no finish line. The journey goes on. We have to continuously evolve, be relevant and be valuable to our members and employees."