NASHVILLE, Tenn.–When the recent THINK 24 meeting got underway here it was sponsored by PSCU/Co-op Solutions. By the time the event concluded it was sponsored by Velera, the new name and brand for the combined company.
It's now been five months since the two long-time CUSOs officially combined, with the company unveiling its new name and branding the THINK meeting in Nashville, which the company said will be the last for the event that had long been sponsored by Co-op Solutions.
Below, President and CEO ChuckFagan offers additional information on how the new brand came to be, the lessons on the process it learned, how it has handled internal communications, and where the company expects to be when it hosts its Member Forum in mid-April 2025.
CUToday.info: Five months is a fast turnaround on a new brand. Tell us more about the timing, the process and the goals?
Fagan: We thought, ‘Do we try GAC? Do we try Member Forum?’ And those two were absolutely too fast. PSCU as an independent company had done a brand exercise a couple years ago, so we had some work that could be pulled off the shelf that helped accelerate a little bit of the work. But it was still a fresh exercise.
Members of Co-op’s team joined with members of our team and an external, award-winning ad agency and they brought the creative side and we just decided with a conference like THINK that is known throughout the industry and with record attendance, it would be the right time to launch it.
It's an incredible investment on a brand change. Everywhere you go there's our brand somewhere.
But we’re also going to do this like the rest of this integration. It's not going to be all at once. We've got to manage dollars, we've got to manage the process.
I think the other side of this is a new brand can bring the teams together even better. The two teams are working together incredibly. I'm now starting to see it not be like an eighth-grade dance where the boys are on one side and the girls on the other. We're starting to see the two teams have lunch together, you're starting to see that culture come together.
I think our team did an incredible job with the name, the colors, the tagline (“Momentum for Your Mission”). It was just the right time to bring it out. The feedback I've gotten from credit unions, (THINK attendees), as well as LinkedIn and wherever else people send me texts, it's just been overwhelmingly well received.”
CUToday.info: Lots of credit unions go through a name change. What lessons have you taken away from this process and when did you settle on the name, Velera?
Fagan: It was probably March that we settled on this name. There was a whole list we started with words like ‘acceleration,’ obviously ‘velocity’ was in there. We wanted it to be about the cadence and just the pace of change in payments technology that exists today.
We want our name to reflect that and then the whole ‘new era’ piece was part of the discussion. That’s where we really got down to Velera as the name because of how it tied the two of those things together.
We’re also all about credit union growth, so that's the arrow in the at the end (of the logo).
I would say it was March when we ultimately decided (on the name). We shared that in early April and got feedback and then there was a lot of work that had to be done to get ready for the THINK conference.
CUToday.info: In the name change process, how strong was the thinking around having a name with some tie to credit unions, as PSCU (Payment Systems for Credit Unions) and Co-op Solutions had?
Fagan: It was absolutely a factor. Those are two 40 years-plus organizations that had built significant brand awareness. But I think it's time to modernize. Velera is here. We are moving forward as a combined organization. Velera gave it more of a technology feel, more of modern feel. We got rid of the red (Co-op’s colors), we got rid of the green (PSCU’s colors) and went to new colors and a fresh start.
The way we've approached this whole thing, and my communication from when this was first announced, is we're going to build a new organization with a blank sheet of paper. That's work structure, that's branding, that's technology. And branding is obviously a cornerstone of that process.
CUToday.info: External communications has obviously been important, but how have you handled communications internally? How have you worked to get buy-in?
Fagan: We started out on our respective intranets, because we were still on separate employee sites. We (launched) ‘Ask Chuck Anything,’ so employees could ask away. I do have to phone a friend on some of them to get the right answers, but we respond to every single one.
We’ve really tried to be prescriptive with a regular cadence of communications through video, through live meetings with all staff and live meetings with leadership.
We’re using written correspondence, as well, that's internal, but a lot of that is external to our member-owner credit unions, too. Communication could not be more important.
We also want to get the feedback from our employees on how they're feeling, and there is a McKinsey tool called the Organizational Health Index that is a survey that we sent out. We got an 80% response rate from 5,000 employees and we scored in the upper quartile. But the real value in that survey is the verbatim comments. There were 2,800 verbatim comments our team has gone through and categorized the patterns. On any areas where we're falling short we want to make sure we address it and keep the communication strong.
CUToday.info: You have spoken positively about how well the merger has gone so far, but there must have been something in this merger that was more difficult than imagined. What would that be and what would you advise other organizations?
Fagan: From what I’ve seen it’s when you get into the dollars. Both companies are coming in with long histories and we’re trying to protect Co-op members, PSCU members. Because we had different financial fiscal year-ends, there's a stub year for Co-op to get aligned with our October 1 fiscal year. We’re tracking financials separately for probably the first two to three years just because we want to make sure that the patronage owed to PSCU members, the patronage owed to Co-op members, is something that we can track and we can answer to the board, which has a very strong belief that the dollars created up to this point for both cooperatives should be held in check, so that if they've recorded their patronage into their financials there's no financial adjustments based on the two organizations coming together.
Over those first three years part of my responsibility is to get the financials, the margins and everything intact so that we become one all the way across the board.
The financials are the piece that I would say pops up in any merger. It just it gets down to the dollars.
CUToday.info: In 2021, Co-op Solutions recorded an unrealized gain of $156 million from the sale of its investment in Alkami.
Several years ago Co-op Solutions saw windfall from Alkami sale. What becomes of that cash?
Fagan: PSCU, likewise, had Visa stock from its IPO. There was also (proceeds) from the sale of Everlink in Canada. We have cashed those out and Co-op has cashed out most of the Alkami stock.
It all falls into that tracking of separate financials, number one. But also because a lot of what you do up front requires cash we need to build some resources around cash to be able to support all the things that we're doing technology wise. A lot of those funds are being used for that purpose but again still track separately so that we keep the credit unions’ financial statements whole.
CUToday.info: You’re still in the honeymoon stage, so CUs at this point are not asking about the deliverables. You have also talked about adding value. What sort of value do you hope to be able to show credit unions from this merger?
Fagan: I think this goes a couple different directions. We were spending, respectively, $10 million and maybe even up to $12 million on IT and cyber. We were doing the same thing with member dollars; we get to do it once now. There are examples of that across many different areas, so I would say the immediate impact is we become a more efficient organization and are able to take that duplication (of dollars) and use it in ways that benefit credit unions.
I'd say longer term, because of the number of credit unions that we touch, we become that very attractive entry point for fintech and technology developers that don't want to build distribution center systems; they want to come into an organization that has the end points and has the account executive structure that we have to be able to distribute products.
I also think long term one of the wins for credit unions is going to be that velocity of getting access to technology faster.
CUToday.info: The THINK meeting annually releases a significant amount of research. You have this research about member behavior at the CU retail end. How do you leverage that and take advantage of all these findings?
Fagan: I will give you an example. Apple Pay comes out and everybody's like, ‘Wow, that's cool.’ They get it and then they find inconsistent acceptance at merchants and then you forget you have it. We're addicted to plastic, so people continue to use plastic.
Well, the data has been showing now for the last several years that the uptick is starting. I think one of the most fascinating things about the U.S. payment systems is we lag the rest of the world in adoption and some of that's addiction to plastic, but some of that is also that no other country in the world has nearly 10,000 financial institutions. So, we’re slow to adopt new payments technologies.
We get using some of the data from around the world, some expertise as to ultimately what's going to happen over the last 12 months or so, and it’s a hockey stick on Apple Pay. It’s the safest way to pay, it's all tokenized on your phone. It’s the one thing we all have with us all the time. So, we're seeing mobile wallet adoption more than ever now. What that does is it changes and reprioritizes how we invest our dollars on product, It went right up to the top of the list--getting a digital provision card right into the mobile wallet.
We now have through our partnership with Amount an ability to really replicate the acquisition process of the Apple Card to three clicks. It’s almost an instantaneous decision. The cards are placed right into the digital wallet, the physical plastic comes through normal mail and then we build on the back-end.
Because of what the data showed us with the adoption of buy now, pay later consumers who are struggling with inflation, they need a more customized payment experience so we're allowing the consumer (to accumulate debt) in a stacking way like you see in many buy now, pay laters. You go to four different retailers and you could find four buy now, pay later (financed purchases), and that stacking gets the consumer in trouble,
Financial wellness is our focus. We’re using existing credit lines so if the consumer has a $10,000 line and they go out and buy something for $2,000, that whole process is linked. They can set that $2,000 up as a buy now, pay later payback.
We’re using data to discover where the consumer wants to do their payments and how they want to do it and it honestly does reprioritize how we invest our dollars and resources to get product to market quicker.
CUToday.info: A year from now or at Member Forum in 2025, what do you hope people see?
Fagan: We should be one team, fully done with all organizational structure announcements. We’re kind of midway through that process now and I suspect that it will be August, September when we're really, fully set.
I think a year from now not only should we be rolling out some of that fintech that I talked about, but we should have a lot of the product rationalization complete and products rolling out.
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