Digital payments technology is advancing at the speed of mobile. To help you decipher this industry in flux, Insight Vault caught up with Nish Modi, CO-OP’s new vice president of digital and business intelligence, to talk payments, credit unions, millennials and everything digital.
Insight Vault: You have an extensive background in community banking and payments. How did you get your start?
Nish Modi: Yes, I have spent my entire career in financial services and fintech. My affinity to finserv and fintech started very early on in my career. In the early-mid 1990s, as a consultant working with large multinational financial institutions, I worked on developing treasury management solutions for corporations to help them manage their inflow and outflow of cash. This was especially important as interest rates were high and corporations could save hundreds and thousands of dollars by efficiently managing their cash positions. It was pretty fascinating to get an insider view of how financial institutions operated.
Around 2000, I moved to Austin to work for FundsXpress, an online banking and bill payment company serving community banks. The Internet was starting to gain ubiquity, with consumer behavior evolving as a result, and financial institutions – large and small – were trying to figure out how to best leverage technology to serve their consumers. It was an amazing experience being on the leading edge of developing transformative products and services.
It was also incredible to be on the road talking to community credit unions and banks, helping them see the future and go digital. It was an eye-opening experience – I realized that every community financial institution had unique needs and that universally they cared deeply about their consumers/members.
Insight Vault: You are the holder of multiple patents. Tell us about your digital payments innovations.
Nish Modi: Really, the ideas began formulating when ecommerce was really taking off. I was at eBay/PayPal in 2011, which allowed me to see firsthand how major tech and payments companies create consumer products together.
I also saw that payment and fintech companies weren’t thinking about the merchants at all. The burden of running a business, and more importantly taking payments online and in-physical, was crushing small businesses. There was a large disconnect for businesses expanding into online channels: in-store payments had to settle through one processor, and online through another. In addition, the value of any business is having access to smart, meaningful and actionable data; and because of disparate systems, it was like moving mountains for merchants to know their customers, trends and buying patterns. They were throwing darts in the dark and hoping they got close to bull’s-eye, but it was a crap-shoot.
There in lay an opportunity – I left eBay for SecureNet, a provider of payments processing and inventory management solutions.
At SecureNet, we developed from ground up an omni-channel payment processing platform that allowed merchants to accept payments online, in-store and from mobile devices, and settled them through a single processor on a single merchant account – so simple yet so elusive.
The solution also allowed businesses to understand their data. It incorporated analytics to help merchants pinpoint customer behaviors, such as where they shopped, how they purchased and what they bought. This type of digital business intelligence was an emerging concept at the time.
Insight Vault: What attracted you to CO-OP Financial Services, and what is your role?
Nish Modi: CO-OP is a unique company because of its cooperative relationship with credit unions – and, like our client credit unions, we are at an inflection point. We are digitally transforming together.
The vision for CO-OP as a technology partner with credit unions excites me; besides being a technologist, I love working with community financial institutions – the opportunity is simply a double bonanza.
My role is to work with all things digital – from the MyCO-OP client portal to new reporting platforms, AI, etc. I am working closely with Matt Maguire, CO-OP’s chief data officer, and his team to build our data strategy. I will also be strategizing and developing products to help credit unions serve the next generation of members and make the right business decisions – based on data.
Insight Vault: What is your outlook on the payments industry?
Nish Modi: It is changing, but old habits die hard. That is why we still write checks, for example, even though we’ve been talking about the demise of checks since the 1990s.
On the security side, biometrics will replace user IDs, passwords and other authentication methods. As for payments, adoption of wallets has been low, but a lot of companies have invested in this technology, and they are playing the long game.
Millennials are critical to watch. This demographic is our nation’s largest, and it is growing up, gaining traction in the workforce, starting families and buying homes. And, immigration is bringing even more millennials into our population from places like India, China and East Asia. These young people bring with them their own experiences and expectations.
Like any consumer, millennials use technologies that makes sense for them. They value convenience and want their mobile devices to do everything. P2P transfers, wallet solutions to tap and pay – those are the conveniences they expect, and CO-OP is right there with solutions for credit unions.
Insight Vault: What other strategies should credit unions be embracing?
Nish Modi: Credit unions need to stay true to their mission of serving the community with all things financial. They need to go beyond simply helping members open an account. To stay relevant, credit unions need to offer services that are unique and differentiating, and this gets back to data. They need the ability to see transactions across credit, debit and investment products, and then respond with what members need.
Ultimately, success requires us to adopt and adapt – adopt new technologies and adapt to new consumer demands. That is where CO-OP comes into play, by providing best-of-breed solutions to help credit unions compete broadly and grow over time.