Name: MSUFCU at FinovateSpring 2023 – Boosting financial inclusion in the US
Uploaded: 2023-06-08T12:00:49.155Z
Duration: 381.21
Description: At the FinovateSpring 2023 conference in San Francisco, FinTech Futures caught up with Ben Maxim, chief digital strategy and innovation officer at MSU Federal Credit Union (MSUFCU), to discuss how banks across the US can tackle the wealth gap and help low-to-moderate income families build wealth effectively.

FF.INT.003_1_1.mp4

FF.INT.003_1_1.vtt

English

{{00:00:04}}
This is FinTech Futures at Finovate

{{00:00:05}}
Spring, and I'm joined by Ben Maxim

{{00:00:07}}
with MSU Federal Credit Union.

{{00:00:09}}
Hello Ben.

{{00:00:09}}
How are you?

{{00:00:09}}
Yeah, doing well.

{{00:00:10}}
Thank you.

{{00:00:10}}
Excellent.

{{00:00:11}}
How are you?

{{00:00:11}}
Enjoying the conference.

{{00:00:11}}
So yeah, it's been great.

{{00:00:12}}
Really enjoyed it.

{{00:00:13}}
Excellent, So just get stuck then.

{{00:00:15}}
Let's give us quick instructions

{{00:00:15}}
to yourself and your, role, MSU.

{{00:00:17}}
Yeah, absolutely.

{{00:00:19}}
I'm the Chief Digital Strategy Innovation

{{00:00:20}}
Officer at Michigan State University

{{00:00:21}}
Federal Credit Union, where I run our

{{00:00:22}}
innovation lab, where we partner with

{{00:00:23}}
fintechs and put them in front of our

{{00:00:25}}
members to get real feedback for fintechs

{{00:00:27}}
that we're working with and really see if

{{00:00:28}}
it's something our members will actually

{{00:00:29}}
wanna put in, want us to put in place

{{00:00:31}}
as well.

{{00:00:32}}
Excellent, So you're here

{{00:00:33}}
speaking on a panel then about

{{00:00:34}}
financial inclusion in the U.S.

{{00:00:36}}
Yes.

{{00:00:36}}
With a focus on reducing the wealth gap

{{00:00:38}}
and helping low to middle income families

{{00:00:40}}
really, you know, boost their wealth.

{{00:00:42}}
In your opinion then, how can banks

{{00:00:43}}
across the US tackle the, wealth

{{00:00:45}}
gap and, what the shaping looking to

{{00:00:47}}
do to really support these people?

{{00:00:48}}
Absolutely.

{{00:00:48}}
So I think really people need to

{{00:00:50}}
look at it in a lens where, you

{{00:00:51}}
know, There, there's the wealth gap.

{{00:00:53}}
But really, you know, how do you

{{00:00:54}}
build wealth and what does that mean?

{{00:00:55}}
And it means different

{{00:00:55}}
things to different people.

{{00:00:56}}
And, really at a most foundational,

{{00:00:58}}
you know, there are people

{{00:00:59}}
in underserved markets that

{{00:01:00}}
don't trust the banking system.

{{00:01:01}}
They've been taught generationally,

{{00:01:03}}
you know, they should interact

{{00:01:04}}
with money a different way.

{{00:01:04}}
Don't trust banks, don't

{{00:01:06}}
trust credit unions.

{{00:01:07}}
Don't trust the system.

{{00:01:08}}
Right?

{{00:01:08}}
So how do you, leverage that?

{{00:01:10}}
And I think community financials,

{{00:01:11}}
Institutions are in a, unique

{{00:01:12}}
position to have that trust.

{{00:01:14}}
And, we, they've made some

{{00:01:15}}
inroads through financial literacy

{{00:01:16}}
education and things like that.

{{00:01:18}}
So we have an opportunity there.

{{00:01:19}}
And then to introduce solutions that

{{00:01:20}}
are tailor made to this audience.

{{00:01:22}}
You know, that's not just

{{00:01:23}}
one solution for everybody.

{{00:01:25}}
You know, you really need to go

{{00:01:25}}
talk to the communities that you're

{{00:01:27}}
trying to serve and, really focus on

{{00:01:30}}
you know, how do you provide

{{00:01:31}}
services that they need, like

{{00:01:32}}
billing, emergency savings, how do

{{00:01:33}}
they have stable housing access?

{{00:01:35}}
How do they have access to, you know

{{00:01:37}}
there are a lot of gig economy workers

{{00:01:38}}
who, they don't have a traditional W2

{{00:01:40}}
income, so we can't give 'em a mortgage,

{{00:01:41}}
but maybe they have enough cash flow

{{00:01:42}}
that actually could afford that, so

{{00:01:44}}
they're stuck renting at a higher rate

{{00:01:45}}
than being able to afford that house.

{{00:01:46}}
So, you know, you can give a loan based

{{00:01:48}}
on that cash flow versus, you know,

{{00:01:49}}
the W2 needing to be that requirement.

{{00:01:51}}
So being flexible and changing maybe

{{00:01:52}}
some of our more stringent conservative

{{00:01:54}}
practices and really try some new

{{00:01:56}}
things in a risk mitigated way, but

{{00:01:58}}
still, you know, to allow some new

{{00:02:00}}
thoughts to come into the system.

{{00:02:01}}
Excellent, excellent.

{{00:02:02}}
And what kind of new innovations and

{{00:02:04}}
tech developments exist at the moment

{{00:02:05}}
to support these customers you think

{{00:02:07}}
banks should, could be tapping into?

{{00:02:08}}
Yeah, absolutely.

{{00:02:09}}
So some of the, cool things I'm

{{00:02:10}}
seeing lately, so kind of similar

{{00:02:11}}
to a buy now pay later situation,

{{00:02:12}}
but for like rent payments.

{{00:02:13}}
So, you know, there's a company

{{00:02:15}}
that you, they'll make your rent

{{00:02:17}}
payment on the first of the month.

{{00:02:19}}
You pay them four installments over time,

{{00:02:20}}
and then they're building your credit.

{{00:02:21}}
You know, as you're doing already doing

{{00:02:23}}
behaviors, you're already, you know,

{{00:02:25}}
needing to do anyway, so they're taking

{{00:02:26}}
what you're already doing and then

{{00:02:26}}
you're helping build credit, then you

{{00:02:27}}
can be, you know, eligible to get that

{{00:02:29}}
mortgage, you know and, stuff like that.

{{00:02:31}}
So there's credit build options.

{{00:02:32}}
There's also things that are, you know,

{{00:02:34}}
getting to the, more true wealth side.

{{00:02:36}}
You know, that's the fractional

{{00:02:37}}
share investing fractional

{{00:02:39}}
real estate investing.

{{00:02:40}}
Both things that, you know, if you're just

{{00:02:41}}
gonna invest in stock or, you know, mutual

{{00:02:42}}
funds or whatever, you think you need

{{00:02:44}}
thousands of dollars, well here's a way to

{{00:02:45}}
do it for five bucks here, 50 bucks here.

{{00:02:48}}
And really to get started

{{00:02:49}}
kind of building that.

{{00:02:50}}
And, that's one thing that's really

{{00:02:51}}
separated and created this wealth gap

{{00:02:52}}
is not knowing about it or having the

{{00:02:54}}
access to do some of these things.

{{00:02:56}}
Excellent, And one of the key selling

{{00:02:57}}
points for community banks and, credit

{{00:02:59}}
unions then is, the customer service.

{{00:03:01}}
The, loyalty that you get from that with.

{{00:03:04}}
With that said, do you think community

{{00:03:06}}
banks and credit unions are our

{{00:03:07}}
best place then to kind of support

{{00:03:08}}
these customers and really help try

{{00:03:09}}
and drive that wealth gap close?

{{00:03:11}}
Yeah, absolutely.

{{00:03:12}}
So I think, you know, there,

{{00:03:13}}
there's a community feel, right?

{{00:03:15}}
So there's an opportunity to use and

{{00:03:17}}
leverage the, trust you build in the

{{00:03:18}}
community and by doing things in the

{{00:03:20}}
community, like supporting different

{{00:03:21}}
events and, making sure that you're

{{00:03:22}}
diverse in what you're, supporting

{{00:03:24}}
as well, not just one or two.

{{00:03:26}}
You know, opportunities, but really

{{00:03:28}}
reaching out to different areas,

{{00:03:29}}
different segments, different, you know,

{{00:03:30}}
markets, the arts, stable housing small

{{00:03:33}}
business, you know really, trying to help.

{{00:03:35}}
You know, build up the community

{{00:03:37}}
and that builds the trust.

{{00:03:38}}
And then that allows you a foot in

{{00:03:40}}
the door to then, you know, provide

{{00:03:42}}
financial education access and provide

{{00:03:44}}
access to financial services that may,

{{00:03:46}}
or may not have been there all along.

{{00:03:47}}
So that's really the opportunity.

{{00:03:48}}
And I think because of our embeddedness

{{00:03:50}}
in the communities we, live in and, serve,

{{00:03:53}}
we have that kind of leg up and being able

{{00:03:54}}
to provide that, kind of access to the

{{00:03:57}}
trust and then to the, solutions after.

{{00:03:59}}
Excellent.

{{00:03:59}}
Excellent.

{{00:04:00}}
So looking at MSU Federal Credit Union,

{{00:04:02}}
then, how have you looked to approach

{{00:04:03}}
your own digital strategy then, and

{{00:04:04}}
how important is partnering up with

{{00:04:06}}
FinTech been in, in that as well?

{{00:04:07}}
Absolutely.

{{00:04:07}}
So I moved into this role where we created

{{00:04:10}}
our innovation lab about three years ago.

{{00:04:11}}
We had built a lot of stuff ourselves.

{{00:04:13}}
Over time it became

{{00:04:14}}
unmanageable, untenable.

{{00:04:15}}
There's just too much you can do.

{{00:04:16}}
We needed a team, probably

{{00:04:17}}
two or 300 developers.

{{00:04:18}}
Well, we're not gonna hire that.

{{00:04:19}}
We're a credit union.

{{00:04:20}}
So we've, we thought partnering

{{00:04:22}}
with FinTech was, the way forward.

{{00:04:24}}
So we've partnered with probably,

{{00:04:27}}
20 to 30 in some fashion where we've

{{00:04:29}}
piloted or invested in through our

{{00:04:31}}
Receda group, puso and we've started

{{00:04:33}}
putting 'em through the innovation lab.

{{00:04:34}}
We help them scale, we give them

{{00:04:35}}
investment and really help them see

{{00:04:37}}
the, credit union industry, community,

{{00:04:38}}
financial institutions as a path forward.

{{00:04:41}}
You're not just looking for VC money.

{{00:04:42}}
We're strategic investor.

{{00:04:43}}
We're helping you build your

{{00:04:45}}
products so it can serve in the,

{{00:04:47}}
members that we're serving as well.

{{00:04:48}}
And, we really enjoy taking that role

{{00:04:49}}
and really truly being a partner.

{{00:04:51}}
And, that's I think the power,

{{00:04:52}}
right, is you can partner FinTech

{{00:04:54}}
and, financial institution.

{{00:04:55}}
Excellent, excellent.

{{00:04:56}}
And given the rate of change then in

{{00:04:58}}
terms of like digitization and technology,

{{00:05:00}}
how difficult has it been to remain

{{00:05:02}}
kind of adaptable and making sure

{{00:05:03}}
that you're meeting customer demands?

{{00:05:04}}
Yeah, absolutely.

{{00:05:05}}
And I think this is where, you know,

{{00:05:06}}
a lot of fintechs have picked one

{{00:05:08}}
segment and done it really well.

{{00:05:10}}
So let's not try to recreate it.

{{00:05:11}}
Let's not try to do it poorly or even

{{00:05:12}}
okay, you know, so let's let them be

{{00:05:15}}
an expert in that and how do we sew

{{00:05:16}}
it together in a cohesive experience?

{{00:05:17}}
And I think that is the challenge.

{{00:05:18}}
Is if you put all these solutions in

{{00:05:19}}
place, at some point you reach a scale

{{00:05:21}}
where it's well, this one needs to

{{00:05:22}}
interact with this one to do this, and how

{{00:05:24}}
do you get them to work together and start

{{00:05:25}}
to collaborate as an industry as well?

{{00:05:27}}
And I think that's really kind of the

{{00:05:28}}
focus we've had as, as of late and,

{{00:05:31}}
using our development team to kind

{{00:05:32}}
of make that enabling technology to

{{00:05:33}}
make, maybe tie some of those pieces

{{00:05:34}}
together, make it easier for credit

{{00:05:36}}
unions to interact with these fintechs.

{{00:05:39}}
Excellent.

{{00:05:39}}
Excellent.

{{00:05:39}}
Just to wrap things up then, what

{{00:05:40}}
would you say are the immediate

{{00:05:41}}
next steps then when it comes to

{{00:05:42}}
producing that wealth gap in the U.S.

{{00:05:44}}
I, think really it's how do you

{{00:05:46}}
provide financial education access?

{{00:05:48}}
So there's a movement in the United

{{00:05:50}}
States right now, I think we're

{{00:05:51}}
up to 37 states that have approved

{{00:05:53}}
financial literacy requirements

{{00:05:55}}
for graduation of high school.

{{00:05:56}}
So how do you, as the community

{{00:05:58}}
financial institution provide curriculum

{{00:06:00}}
resources to support that education?

{{00:06:02}}
And that's really kind of that the

{{00:06:03}}
opportunity for us to make stronger or

{{00:06:05}}
financially literate communities who

{{00:06:07}}
then ultimately are given a, leg up in

{{00:06:09}}
life because they've had this education

{{00:06:10}}
early enough that it makes a difference.

{{00:06:12}}
Excellent.

{{00:06:13}}
Well, thank you so much for

{{00:06:13}}
taking the time out to speak.

{{00:06:14}}
Absolutely.

{{00:06:15}}
Thank you so much.

{{00:06:16}}
Thank you.

I'm the Chief Digital Strategy Innovation

members to get real feedback for fintechs

that we're working with and really see if

and helping low to middle income families

FinTech Futures

Expert Insight

At the FinovateSpring 2023 conference in San Francisco, FinTech Futures caught up with Ben Maxim, chief digital strategy and innovation officer at MSU Federal Credit Union (MSUFCU), to discuss how banks across the US can tackle the wealth gap and help low-to-moderate income families build wealth effectively.