Thriving In The Digital Age: Jed Meyer and Credit Unions.

In this episode, Joe Crist interviews Jed Meyer, President and CEO of St Cloud Financial Credit Union, discussing the evolving landscape of the financial industry. They explore the challenges of rapid change, the importance of technology adoption, and the role of regulation in fostering innovation. Jed emphasizes the need for credit unions to build community resilience and maintain a strong human connection with members. He shares insights on long-term strategies for success, highlighting the importance of understanding one's value proposition and the need for a proactive approach in a fast-paced environment.

Transcript

Joe Crist (00:03.096)
Hey everybody, welcome to another episode of Thriving in the Digital Age. I'm your host, Joe Crist, and joining me today is Jed Meyer. Jed, thank you so much for coming on. Could you tell the audience a little bit about yourself?

Jed Meyer (00:15.412)
Yeah, thanks for having me on. really appreciate it, Joe. Jed Meyer, President and CEO of Cloud Financial Credit Union in St. Cloud, Minnesota. Been in the financial industry for about 25 years now. I've worked for large national behemoth banks all the way down to really, really small credit unions. And right now I lead a credit union that we started small. In my first 10 and a half years here, we've more than forexed the company. We're about a 96 year old company.

We've done that through multiple strategies that I'm sure we'll share a few of those as we kind of walk through it in the world that continues to change and evolve as we continue to move forward. But it's a little bit about me. We have company of about 80 to 90 employees. Typically, we range between right now and ultimately continue to grow.

Joe Crist (01:00.878)
Very cool. So you said 25 years, right? You've been in this industry for 25 years. I imagine you've kind of seen and done all of this.

Jed Meyer (01:08.38)
Yeah, absolutely. mean, ultimately we've been through a lot of different cycles. think I actually do remember rising rate environments. I know there's a lot of leaders in our financial industries who ultimately over the last couple of years have basically had their first rising rate environment that they've actually gotten to experience, which is ultimately new for some leaders and executives in financial spaces. We've had so many years of them not doing that. So we're always faced with new challenges. But yeah, I've seen a lot over my time here.

Today is no different, right? We're always facing things that are new and things that maybe feel similar to in the past and they have some maybe transferable similarities, but ultimately are never exactly the same.

Joe Crist (01:48.142)
So that's an interesting topic, right? So like, I mean, obviously we live in a very crazy world nowadays, right? know, between like, you know, global conflict, AI, all of these new things is coming around the corner and even changes in regulations. What are some of the challenges you're seeing today?

Jed Meyer (02:03.464)
Yeah, well, I think the biggest challenge always has to be pace of change, right? That's the biggest change today. We used to have, ultimately, I would say we'd had years sometimes to figure it out, right? I mean, if you go backwards in time to maybe mid 2000s, you know, when the iPhone started to come out and I always like to give the analogy of, know, when we have, especially a small institution that's owned by its members, which is a credit union, we're cooperative, right? Owned by our members, that is our structure as a business.

We have a lot of closeness with them. We have a lot of loyalty with them in that type of business structure And so if you were to give the analogy of you know as the Apple iPhone came out Because I had a close enough relationship with my members I couldn't have a rotary phone delivery model to them But I might be able to have a blackberry and get away with it for a little while even though there was better Technology out there because we added a different value proposition to our members Obviously that window continues to shrink

And then on top of that, actually have the pace of change of saying, it's just not the iPhone. It's 15 different areas of your business that are changing at that pace. And what timeframe will you have to make sure that you're prepared and delivering to a consumer today that really wants it all and how to remain relevant? And so I think the pace of change has really been impacted by that.

Joe Crist (03:19.47)
No, and absolutely, right. And one of the things I've seen a lot in the financial sector, it's resistance to change, right? The things are moving faster and faster and faster in the world where we're not only as we change, but the demands of customers, right? And so like, how are you seeing like that challenge really like hits you guys, right? Because I know it's, it is hard to change. It's hard for any organization to change, know, finance, especially, like I said before, it's really resistant. So are you guys like seeing anything like,

around that.

Jed Meyer (03:50.324)
100%. I think one of the biggest mindset shifts that we have to have specifically, I would say in any industry, but ultimately for sure in the credit union industry is really the mindset of investing in who you expect to be. And then growing into yourself has to be a strong business strategy at your credit union. You have to have strong strategies surrounding that. So you understand directionally where you're headed. I think in the past we've been more risk adverse, you know, ultimately battened down the hatches, having defensive strategies as we've gone through things that have been real tough.

or put pressure on your income statement or balance sheet over time or consumer relevance. And like I said, those windows in the past were much different than they are today. They're much faster today and consumers have higher expectations of speed and they want it yesterday. And so we don't have as many luxuries as we used to have in that space. And then as I said earlier, on top of that, you have 10X.

of those decisions to be making in multiple places within your core business as well as in what you should be looking at as it relates to expanding and diversifying your income statement and balance sheet and some of the that you might have there as you grow as well. And so I would say from the credit union perspective, but that probably transitions to most businesses is, know, do you have a progressive forward -looking strategy where you're willing to take deliberate risks that you manage the flip side of all risks that you take? You know, do you understand it?

Are you comfortable with it? How do you mitigate it if you are? And if you're not comfortable with it, don't do it. And really having that forward thinking thought process versus a defensive strategy, which ultimately, for sure in credit unions, I think in the past, we've taken the defensive strategy approach of saying, hey, let's batten down the hatches. We can use the 0 -9, 10 -11 timeframe where we really went through a downturn in the economy.

I think that might have taught us the wrong lesson for what I think is necessary today, right? And especially in our industry, we batted in all the hatches, we played defensive strategies, we got to the other side of it, we came out stronger. We did a lot of great things during that time. And ultimately business prior to that timeframe went back similar to normal as to where it was. And so that was an appropriate way to go through that downturn or those challenges at that time. I think what's different today is I think the business looks different.

Jed Meyer (05:59.956)
In the future, we continue to move forward, as you insert AI, as you look at the changing in technology platforms like blockchain and some of the things that will really influence the financial industry as we move forward, I think one of the most clear statements as a financial institution is twofold. And I've shared this on previous podcasts and in different communication strategies, but really a financial institution is a centralized ledger, right? That's our primary function in our communities. And you have now decentralized monetized data.

in many forms, people will say crypto, but ultimately in plenty of many other forms from a tokenization perspective in this new technology. so understanding that the form of money is changing as well as the rails at which monetized data moves is changing. And so I don't think the business looks the same as it did prior to the evolution that we're continuing to go through, whether that be AI or not. And so you have to be proactive along that journey. You can't play defense.

do your own style and expect the boomerang of the way business has always been done for the last 60 years to come back and kind of save you once you're through maybe the tough pressures that your income statement or balance sheet might face like we faced in the rising rate environment in the past. And so it's always a dual strategy. You have to run your core business. You have to play in today's world and you have to do the right things. We have defensive strategies too, but you also have to understand that the rules of the game might change post this world. And so you have to have strategies there as well.

Joe Crist (07:22.03)
Yeah, 100 % man. And you brought up something interesting too, like when it comes to actual like adoption of these technologies, right? I mean, there's always a challenge in doing this, right? Whether you're adopting AI or you're adopting blockchain or IoT or what have you, right? There's always something that gets in the way. And I'm sure in the financial service industry, it's no different. Like what kind of challenges are you seeing for...

and banks and other like my institutions when it comes to really trying to adopt these new technologies.

Jed Meyer (07:53.8)
I think it's mindset, right? You first of all have to have a company that believes the necessity to first get into that space and research it, right? Because you ultimately have to go in there. I think then the access to information from that, who are the experts? Like, so who do you call if you want to learn more about blockchain technology? You know, in our strategy within the blockchain space, we actually created a nonprofit called the Minnesota Crypto Council here in Minnesota.

which for now two and a half years is really a resource made up of people from all different industries that we've kind of helped consolidate, put together, create a nonprofit that really puts on a quarterly basis information and data and training for these spaces for anybody who wants to attend, whether it be an individual consumer to.

someone who's running a business can learn more about that space from a trusted local partner, people who have been in the space for a period of time and trying to give more credibility to where do you actually go learn about this data. And so that was really our first step because we experienced it too, right? Saying, hey, when we get into the space, we start interviewing all of these potential partners that can help increase our knowledge as it relates to some of the changes that are happening in AI and some of those. And we're a smaller company, so we have internal resources, but we might not have all the right internal resources. So we lean on external

you know, places to go find that data and that information. And we interviewed people and when we went through that, we realized there wasn't a ton, especially in the blockchain space. AI, there's obviously more. There's plenty of people that will walk you through what they believe the vision and how that'll impact our industry specifically, how we might be able to use it, where the value proposition might happen today, where they think it's going tomorrow. Blockchain was very different, right? Because you have ultimately plenty of people who have different conversations or interpretations of where that's heading.

Mindset first where do you find the data and education second so you can understand how to write a strategy of what you think's best for your company? And then third ultimately specifically in the blockchain and AI space of like hey, what where's regulation at what what ultimately can we do? What can't we do and what I found in that space really through our journey over the last four to five years has been you know, Unfortunately, and I'll use blockchain. I'm gonna use that a lot more specifically because of crypto

Jed Meyer (09:58.51)
know crypto, there are currencies, then there's also technology companies and people don't even understand the difference there as it relates to what are crypto assets and people investing. They're investing in companies and some are investing in what we would call a currency. so understanding the difference between that, understanding the risks that exist currently in that emerging market. There's plenty of them, right? And how do you navigate and learn those things? But what I've learned along the way is because the word cryptos has such a negative connotation.

over time when you study it you come up with a different answer than what you hear in the headlines often and understanding kind of what is the technology where is it moving what is important where are the risks but anytime you start talking about blockchain it goes almost from zero to a hundred miles an hour in less than a second of hey you can't put crypto on your balance sheet and I'm like you're right I don't want to put crypto on my balance sheet today but I can envision a time in the future where that might actually be

the case and take crypto and throw it out the door and say, know for a fact in some point in our future as financial institution, we're going to have to be able to handle monetized data and the movement of monetized data in a way that we've never had to do before. so getting to that place, really looking at saying, hey, rather than going to, hey, we're going to put crypto assets on our balance sheet tomorrow, can we not talk about that? What can we do today? Where can we service our members today? Where's the biggest gap, right? We're a member -owned community -based financial institution.

Joe Crist (11:14.158)
Yes.

Jed Meyer (11:20.276)
Part of our purpose is to be part of the fabric of the community. That's what community banks and local small FIs like credit unions serve a purpose in their local economies, keeping them resilient against things across the world. And as the world continues to get more global, right, that becomes harder. You think about a decentralized ledger, well, now economies that are local are much more vulnerable to bad things that happen much further away from the economy or the place or the community that we live in today.

And so how do we fulfill our role of making sure that our local economy is resilient, that we have the proper education, that we ultimately are a trusted partner there, that we continue to help small entrepreneurs and ultimately businesses grow in our community and still sufficiently handle that. You get to a place where it's global currency of some sort and that actually, and we don't find ourselves in a role in a decentralized ledger. I think small communities will suffer from that and understanding that, how do we play in that world?

As I said to you earlier, we looked at the blockchain space, education was first, so we created that in our strategy. The second was, if somebody chooses to invest in a tokenized, monetized data of some sort, whether it be crypto or in another form, how could we as a local financial institution give them a safe place to store it? We've seen all the bad actors that have come out through the process and through the time here over the last four or five years. We won't name names, but we all know that they exist.

You know, I have members who have chosen to get in that space I have members who choose not to be in that space and that's okay too like and that's part of our messaging to our members as well as say hey don't have to believe in this space. You're not the access that space. We're not taking your money and putting it into that space We're actually just trying to make sure that we're meeting the the needs of the consumers in that space that are currently members as well and the second most important thing beyond education is to have a place where they can safely store and so we'll be launching

I would say in the next few months, a digital asset vault, a CU digital asset vault that gives the opportunity for our members to store digital value, monetized data in a form and keep it at a local FI as we continue to move. We believe that is already in regulation, that already is, gives us the ability to do those things as we move forward. Of course, we're working with our regulators and it's great, right? It's not, yes, you can do it or no, you can't and let's talk through that.

Jed Meyer (13:41.116)
And so I think that's another important strategy. We've been working with them for over two years. We could have launched this product two years ago, but that's not our mentality. Our mentality is not to go out there and go into an industry and be regulatory adverse, if you will. We're trying to partner with them as they try to get their arms around what is responsible for regulation and where does it move. And that's kind of the cool part about crediting is we're a very close -knit industry and we work together. We're very collaborative and that includes with our regulators to say, hey,

you know, what is responsible? What would you need from legislative or from more of the NCOA or somebody else to say to give you more guidance on what the right way to go? And there's too many unanswered questions. We're trying to help answer those as part of our strategy, not just, hey, we're going to go do this because we believe we can legally. Ultimately, we want to be part of the narrative in actually developing this emerging market for credit unions to have long -term success in the state of Minnesota and across the country.

Joe Crist (14:36.088)
Yeah. So you brought up a lot of interesting concepts, right? I think one of the biggest challenges when deploying new technologies is dealing with regulation, right? It's on the top of any financial institution's mind, nobody wants to get in trouble, right? Nobody wants to get fined. Nobody wants to end up in the paper for the wrong reason, right? It's bad for everybody. So you mentioned too about adopting technology. So what are some solutions that you've seen?

around not just adopting these new technologies and repairing for them, but also working with regulators. Like, what is the best approach for Credit Union to actually do this?

Jed Meyer (15:11.432)
think patience and being open and honest, again, we all have a version of the same goal. I think that's important to always remember with regulation. I know you can come at it from, you know, we don't want to get our hands slapped. know, nobody wants that, of course, as to your point earlier in doing something that regulators don't agree with. That's not necessarily our mode of operation either. why does regulation exist, right? It exists first and foremost to protect consumers, second to protect the actual institution.

and ultimately the share insurance funds that ensure the deposits that all of our members put in here and that are backed by the federal government. I think those are always the highest level goals of any regulatory relationship that we have. And I think if we keep that at the forefront, we actually have the same goals. We might have different versions of where we think the more important piece of that is, right? We might have regulators who are more risk adverse because they have a primary goal of protecting consumers and the share insurance fund and all those things, but we have those same goals.

And so trying to find your common ground, what can we agree upon today? Where do we have disagreements? Is there a place where we can meet in the middle there? Or do we go fully to the regulatory side of what their version is or our version is? And really work in a collaborative spirit there. I think that's lost sometimes where we feel like we're at odds with our regulators. So my best advice there is lean into it, give them a call, to have conversations, be patient with it. Don't be someone that's really ready to run into the...

to the future without them being there with you, because it's extremely important. And I think it's extremely important. We only have this one chance to get it right, to be honest, at the end of these spaces, right? We start launching these things into this space and we're wrong or we have similar outcomes that we've seen in specifically the crypto blockchain space that you've seen other companies happen. Nobody wants that and regulators or the industry as a whole from credit unions or banks don't want to have that.

be where we actually made a mistake and actually hurt consumers through that process. That's why we're involved. I think it's important. And we want to protect the consumers, the same thing as the regulators, and that we can agree upon. And therefore, we ultimately have almost a quarterly call often with our regulators where we're talking through these things. Where do we see it going? Where we're at, what we want to accomplish, what they want to see more from us, and answering some of the questions that they have concerning this. And I think that's the best way to get to regulation, unfortunately.

Jed Meyer (17:32.264)
historically, at least in financial worlds, oftentimes it means a bank or a financial institution going and doing something and the regulator saying you can't do that and then they get together and they decide who's right potentially through litigation. I think that's a backwards way of doing it, especially with the pace of change moving forward. My hope is we can get to a place where we actually have more proactive conversations and more collaborative conversations to say, we all have the same goal here. We want financial institutions to be successful, healthy.

supporting their local economies and always looking out for the consumer first. And we want to do it in a fiscally responsible way that doesn't put the share insurance fund at risk. And we all have that goal. So how do we get there? This is a space that's not going away. We're going to have to play in this space if we choose to be or I say survive. Some people and men I know you can't thrive if you're not going to be in this place into the future. I actually think we can debate on whether you can survive with old strategies.

I fundamentally believe that the game's changing. Again, the form of money, of monetized data, as well as the actual rails at which it moves is changing, and we have to be prepared for that as an industry.

Joe Crist (18:40.526)
Yeah, and you you brought up something really interesting too. And I see a lot of businesses still struggle with this and not just finance in all industries when it actually comes to collaborating with regulators. Right. Now, do you see that pretty commonly in finance where institutions could have these conversations and they're not? Or is this more of like mandated?

Jed Meyer (19:02.1)
Well, I think different industries have different outcomes. And I guess I wouldn't speak to other industries. I don't have a lot of experience. And I can tell you, excuse me, in the actual financial sector, specifically credit unions, we have a lot of models that work there. We're a very grassroots collaborative industry. Here in Minnesota, we have the Minnesota Credit Union Network that ultimately works directly with the Department of Commerce and legislators as we kind of move forward in making sure credit unions are healthy and safe and sound and have a long -term

future ahead of us. You have America's credit unions that do that on a national level, both legislative as well as helping credit unions. We're all members of those organizations that ultimately work through those and find ways to have disagreements with maybe regulatory bodies, but also influence them and them influence back to us and have open conversations. I think

It's specifically in credit unions. think we have a unique advantage there. We actually have a lot more platforms built already where we have those open lines of communication with our regulators. Our regulators are very involved with us. We've talked with the NCOA. We've talked with the Minnesota Department of Commerce. We have open relationships with the people that have really the oversight of our institution from a regulatory perspective and we get to talk to them often. If you're in a business and industry where you don't have those same platforms,

I would just encourage you to reach out to maybe your legislator or somebody else and say, how do I get relationships like that? What does that look like? Work with your Department of Commerce or whoever oversees your body so you can understand where you're going. But I think that is an advantage in the financial industries. We actually have very open lines of communication that are frequent and often and have been established for years now. We need to leverage those to a different degree as we move forward.

Joe Crist (20:45.614)
100%. And the thing is, you definitely highlighted this where it's, you mentioned like the influence, right? And what I find with a lot of folks inside of like the government side, it's, and just the regulatory side in general, they just, if they don't know, they don't know, right? And they're looking for answers, they're looking to evolve, they're looking to help the industry because ultimately it's about protecting, right? But if you don't know what solutions are out there, or even really understand the problem fully,

can't make the complete decision. So really by collaborating and having those like real discussions on, we want to do this and here's why and here's a problem we're trying to solve. Like then you can arm them and then regulation really starts to evolve with the world we live

Jed Meyer (21:32.232)
Yeah, and again, even if you don't have those larger platforms, statewide platforms, national platforms in your industry, we do. You all vote for local representatives. We're all in a voting season, which makes the world even that much more chaotic, as we all know, unfortunately, in the state of kind of where things are at with that. But we have relationships. So we've actually been to DC. We've met with our representatives there. We've given them the thought process and thought process from us as an individual institution.

outside of the ultimately larger platforms that represent all credit unions. We've done that with local state legislators and we meet with them often too so that one, we can be part of that narrative because ultimately if they make a decision and you say they were uninformed, well you had a chance to inform them as well and so that should be part of your strategy as well. And it also informs you, right? Because you ultimately get the lay of the land of what they believe legislation or legislative bodies are thinking.

around certain topics, why they're thinking those things. And that information is important for yourself as well as you develop strategies of how will I continue to evolve in a regulatory compliant way that protects consumers, but also allows us to be progressive as a company and running our company so that we do have long -term viability for the people we serve in our community, right? Those are always things that you have to be aware of and it's just not running your company, you have to do both.

And we ultimately have to run our company first, first and foremost. my board didn't hire me to be friends with the legislators and regulators, right? They want me to be compliant with them and work with them in a collaborative nature. But my first and foremost place is to really be beholden and responsible to my owners. And every owner at a credit union, which is a beautiful part of our structure, is anybody who banks here is an actual owner in our credit union. So every time my staff sits in front of one of our members,

They're sitting in front of an owner of the company. And so we have strategies around that on how we operate our business. And we have to leverage those to make sure that we're viable moving forward.

Joe Crist (23:25.73)
Yeah. So earlier you mentioned the pace of change, right? Obviously the world's been wild for the past couple of years, right? We have global conflict, supply chain disruptions, technology is moving very quickly with the adoption of AI. It's changed a lot of industries, right? I'm sure nobody is unaware of that now. So when it comes to the credit union, it's just finance in general, like how do you see the future?

of this industry and how it changes, based on just the pace we're going now and how the world has been just evolving and moving the way it is.

Jed Meyer (23:59.892)
Well, I think first and foremost, if you go back to, I don't have the exact date, but you go back to the early to mid 90s, you have 20 ,000 credit unions in this country, 20 ,000 community banks. A lot of people don't understand that there's only about 4 ,500 of each left in the country, right? That's what's happened over the last 35 years in this space as it relates to local small financial institutions. Of course, scale matters, right? That's what we're all dealing with in any industry. It matters, right? You know, the

multi -billion dollar financial institution down the street buys technology or I buy technology, it usually costs us relatively the same dollar amount. Of course, there can be different levels, it costs us and the percentage of our actual income impact on those purchases are way bigger at a smaller institution. That's where scale becomes important, right? We can't get it wrong as often as maybe a larger financial institution can.

You then look at human capital in the fight for talent and some of those things, right? You have to be in that game and you're competing with people that are are much bigger with you and that have a lot larger resources So scales really important. So in our industry, I see consolidation happening continue to happen as we move forward I think You know that that will continue to happen again. I think projections next year in the Community banking and credit union space. You'll still see that for maybe north of five percent consolidation

as we continue to move forward because it is harder to run a smaller institution with the pace of change. But I think we need to embrace the pace of change. I don't think that's going away. Ultimately, think death by a thousand cuts is something that all industries, but I'll speak specifically the one that I'm in, we've outsourced a lot of places that were always considered core financial institution, primary accountabilities to serving the community and the consumers, whether that be money movement payments or

storage or value outside, you have large national change that hold gift card reserves in their place where they used to keep that in their savings account. There's plenty of pressure on financial institutions as we move forward and that's not changing. So we have to be part of the narrative. I think that's really, really important that we're proactively trying to define what our role is in the future of the world as it continues to change so rapidly, whether that be from a technological perspective.

Jed Meyer (26:16.484)
or from the competition because competition for us used to be the financial institution just down the block. Now it's pretty much anybody in the world that ultimately is holding some sort of value on their balance sheet that used to come to my financial institution. Somebody in industry that's actually facilitating the storage or facilitation of money movement, those are all competitors and that doesn't mean it just means that we're competing with financial institutions and so I think we've been too...

patient with that over time. think we have to more be more proactive and deliberate in defining what our role is in the future of that. As we continue to move forward, right, we have seen a ton of different industries get into different forms of what would be traditionally considered a banking model or a banking product. And ultimately, it's about the data, right? I think that's where most of these companies are most interested is to get to the data. But the end result is oftentimes liquidity is outside of the financial normal flow cash flow cycle. And that's

put pressure on bank, especially in a rising rate environment, you just take Bitcoin in and of itself, right? It's a market cap of just under, I think, three trillion, roughly somewhere in there. That's the entire credit union industry. And so if the credit union industry isn't watching what Bitcoin specifically, and that's just Bitcoin, is doing, I think we're missing the boat here because that's liquidity outside of the actual cashflow and services that we provide and really what our primary role has been.

So we have to embrace that. I think, you know, another advice I would give for others is like, you don't have to compete with fintechs. You will, and no doubt that will be, but where do you find the partners where you can leverage and actually partner with them and lean into fintechs that actually can grow your business? We actually just purchased a next generation fintech, in our opinion, that's about 12 years old, that's getting into the blockchain space. We're part owners of that, that's called Deland.

QSO, are in our opinion, well far out ahead of anybody else in the financial space of having a singular solution as it relates to handling the emerging market of blockchain and that technology and where banks can provide and in 10 years, they're a partner there where you could ultimately end with one partner versus 15 different bolt on partners to try to survive in that world. And so we actually leaned into that became owners and we're part of helping

Jed Meyer (28:37.076)
develop the narrative of what our credit union is going to look like in the future by partnering with the FinTech. There's plenty of them out there. Do your research. If you want to get into the blockchain space, I'll throw a plug in for the LAND LLC. They are absolutely amazing. I think you'll find that they have not only education services and the ability to give you education in that space so that you can develop your strategy, but then they actually have solutions that are not.

visionary solutions, they're not beta tested solutions, they're actual solutions today, whether they're live in someone's environment or not is more about regulation, but they have an actual strategy and a roadmap strategy that ultimately that we're in phase four with and we haven't even launched phase one yet because of regulatory perspective. And so we're ready for that industry. People ask me all the time, well, some people think crypto is going to take over the world tomorrow. And I'm like, well, yeah, some people believe that. And some people believe it's going away completely. And I said, you know, as a CEO, I need to prepare for both.

That's ultimately the name of being able to be agile in a fast -pacing environment. So I have to understand what that matters. And for me as a CEO, I know we've done the work before we have to. And so as that emerging industry actually evolves, we're going to be prepared for whichever path and direction it goes down.

We might have to make some tweaks along the way, but we have the right partner. We have the technology. We're out ahead of it and we're prepared for it. that I'm proud of our company and being so small that we've done that work because I think that's really what thriving in tomorrow's world looks like. And you have to manage the risk with that. people ask, well, you're putting a lot of risk into that. And I'm like, no, actually I've only put human capital into that over a number of years.

Because we had enough foresight to say, this is becoming material. We need to understand it. We need to understand what our role would look like that. What would it take for us to get up and operational in the places that we think our members and consumers are going to ask us for? How do we start doing that work before we have to? And so when that door becomes one that says, hey, you got to go open the door, we have the door to open. It's already created and we're ready to go. And so we're not a first to market type company. That's not what we set out to do is to go revolutionize industries. That's not where our

Jed Meyer (30:43.06)
what our strategies are, but on that space specifically, we find ourselves there because we've done the work and it seems like maybe others haven't. And so we're a little bit further ahead than we normally are at our size of an institution. And I think that's okay. It brings different risks, different challenges, different opportunities within that. And we have to manage those accordingly. But ultimately we didn't set out to say, we want to go revolutionize the industry. We think this is everything that's going to happen. We don't care if blockchain becomes 5 % of financial institutions future.

or 85 % of that future, we're prepared for both and we know what our value proposition will be in either one of those scenarios and how we'd actually serve our members and our local community should that happen. I think those are the type strategies you have to get to where you understand what's gonna happen in the future and you try to predict it to the best of your ability and then have an agile ability to adjust to whatever you could never foresee, right? It's like any cash projection your CFO gives you, right? That's a static point in time, very valuable information.

All the results within that are based on previous decisions. And as I say to my CFO all the time of like, that thing is really never gonna come true. That's the one thing I know about the projection you just gave me is that absolutely will not come true. That's the only thing I know for sure that's not gonna happen. So what I want you to do now is come back with an answer of saying, what part of that do we wanna enhance and do more of and what part do we wanna actually influence? Because we actually get time to say, hey, where will we be in three years? You just gave me a static projection.

How do we want to influence that now? What are our strategies to go do that? And I think that mindset has to be where you go. And I'll go back to credit units specifically. It's been really ultimately risk adverse, obviously expense control and driving your income statement on a yearly basis in your budgets. Both are always important, but I don't think you can defend your way out of what's going to happen in our industry in the future.

You can only cut costs so far. You have to have a growth strategy. You have to have a proactive strategy and then have to manage your expenses. And you have to believe in yourself, right? To run a company where you're like, hey, I'm going to invest in who I expect to be, means you're spending money without the reward. And then you got to have enough belief in the talent and the opportunities that you have and the people you have to go actually execute into that strategy. Where I think in the past it's been, when I make these cost saving measures, it'll give me enough money so therefore I can go take that deliberate risk in the future.

Jed Meyer (33:02.376)
That process is a little too slow for the pace of change in tomorrow's world to be able to, again, as I'll say again, thrive in tomorrow's world. You might be able to survive. I think that can be debated, but it's a mindset shift for all of us in saying, let's go take a shot. really, I tell my executives all the time, you get two things in this job. You get the quality of your actions and the integrity of your intent. You don't get to control the outcome.

Right? And that ultimately is how our mindsets have to be built. It's okay to make mistakes. It's okay to be wrong. It's okay to do that. Now I'm going to ask that you always understand the risk and you're managing the flip side of the coin because other action has you know, unintended consequence, right? So we have to understand what they are. If you can't manage it at all and there's an end game decision within whatever decision you are going to do, don't do it then. Don't be proactive. Be more defensive in that case. If you can mitigate it and it is necessary for where you think the future is going to go.

then go for it and then manage the actual risk that you actually know that you're taking and stay on top of it and keep your finger on it. And ultimately at the end of the day, if we're wrong, at least we learned something, right? Because action towards the wrong thing actually allows you to figure out what the right thing is, right? Action towards nothing leads to nothing. And in today's pace of change, you gotta have that mindset for sure on your executive team with your board and in your strategies.

Joe Crist (34:20.078)
Yeah, man, you dropped a of wisdom in just 34 minutes. So, you I do have one last question for your eyes. So you've been here for you've been in the game for a while. You've learned a lot. It's very apparent. If you give the audience any piece of advice that they could they could walk away with today, what would that be?

Jed Meyer (34:43.208)
You know what? I'm just trying to build off of on that you get the quality of your actions and integrity of your intent You don't get to control the outcomes and in a fast -paced in world like that's where you got to gain your strength from when you don't know you know you think the direction is going to take you in a place and nobody likes to fail like as an Executor that's what got you the job of being promoted in it to get there and to be the highest performer and and as a

CFO to always be accurate 100 % of time you have to do those and strategies is different though in vision like you're trying to predict something that's unpredictable, right? You're trying to get correlational data to understand probabilities to understand Hey, if that ends there, we're gonna be good if it doesn't this is what's gonna happen and I can be okay with that too And so just have some confidence in yourself I think you got a you can't have self preservation strategies anymore as a CEO in my opinion, right? If it's internally focused self preservation strategies

I don't think that's going to allow you to take the deliberate risks that are going to be necessary for your institution or organization to be successful. So really draw that strength from, did you do the work? What were the call of your actions? What was the integrity of your intent? Were you doing it for the right reason to benefit the consumer, to do it in a fiscally responsible way, in a regulatory compliant way to support your community? That resonates with people.

We have a human connection strategy here that we believe that's actually something that's become more prevalent over the last 10 years as more things have become automated, as more things, your actual opportunity to interact with another human being is actually something of value proposition we get to provide to our consumers. And everybody says they want to do things online, and I don't believe that to be true. I think they want the opportunity to do it. They want the convenience of that, but they also want a place where they can actually go interact. And my team at every level of organization knows one thing.

That might be the only human interaction the person in front of you actually has in that day. How do you turn it not only from a high level of a service experience to an experience based experience where you actually get at the emotion of what's important to them, you get to build trust at a different level. Those are things that we're out ahead of banks and on in my opinion from being a member owned cooperative credit union.

Jed Meyer (36:50.448)
We are talking with our owners, we have to take that cooperative model further than we've ever taken. It's not enough to just say we're a little nicer, a little cheaper, a little friendlier than the other bank down the street, because we're competing not only with them, but other people. We want people to look forward to coming to the bank. They don't have to, right? Nobody aspires to drive through the drive -through in the morning. But if they do, they're going to have an experience, and that's going to be different, and they're going to walk away saying,

That felt different and it's going to mean something to them and we have to deliver on that every day, especially when we're competing with people that have bigger pocket boots from a technology perspective and other, some of our competitors. And so that human connection thing, what's your company's value proposition? We're no doubt like we have really strong technology here. We've done a lot of strategies. We were very out ahead of that, but it can't become our value proposition. Convenience cannot become our value proposition. We have to play in that world.

We have to be good in that world. think we're out ahead of a lot of people in that world. But the minute becomes our value proposition. I'm just jumping into the bigger companies sandboxes. And if you just take one of the large national banks and say, they have a billion dollar budget in a space that I have $100 ,000 budget, you can do the math there on who's going to have the ability to be more technologically advanced. And so I want to stay out of their sandbox. I got to play in that world. But it never can become my value proposition. so trust yourself.

Quality actions, integrity of intent, know that you're gonna make mistakes, manage your deliberate risk as well as that you can, and do not underestimate how important it is to have a value proposition where you can always answer the question. I have a bank sitting right out my window here, right across the street, and one thing I say to my team all the time is,

What's our answer to having a consumer walk out of that institution, across our parking lot, into our institution and stay? If we can't answer that question, we don't know our value proposition. And ultimately at the end of the day, we're not big enough to survive where I think the industry is going. And so we have to work at answering that every day. you know, it's battle on every front in today's world, right? can't be everything to everybody, but that's what they want from you. And so you have to pick your product set. If it's niche,

Jed Meyer (39:02.004)
That's fine. If you're small enough where you gotta go niche, then do that. Have your segment. There's profitability there that I think people underestimate in being a niche type company. At the same time, we're a place that's been community open for about the last 26 years, so we don't have the ability to go back to just being a niche type financial institution. We do have to be everything to everybody, which means we have to have multiple strategies and be executing them all the time.

I know that was a long way to answer, but I hope you got enough nuggets there for people to take something out of and go.

Joe Crist (39:32.174)
I love that. No, I absolutely love that. I think that's something a lot of people lose track of over time. It's what is your value proposition like? And do you understand it? So really understand your actions. Why are you doing right by your customer? I see a lot of companies, especially as they grow, they start to lose that. And they focus on, we have convenience, we have speed now, things. That's great. But people do

Like especially today, people miss that human interaction, right? People really, we live in such a, we have never been as connected as we are today, but we also have not been nearly as disconnected as we are today as well. And people are so into the technology that having that good morning when you're going through, know, go to the drive -through or go to deposit money, having that good human interaction does really make your day better. Cause at least you start your day with a smile.

Jed Meyer (40:28.948)
And caring about it beyond the service, right? So let's talk about that for just a moment. I know we're probably getting high on time here, but at the end of the day, if I want to take accuracy, right, or service, those are table stakes, right? As we look at a financial institution, to be accurate is ultimately prevents dissatisfaction. does not drive trust, right? So let's just make sure that's very, very clear. Like nobody walks into a bank, asks for $100, and if they get $100, they walk out and go, yes, that was awesome. Nobody does that.

Right, it's an expectation. You give them a 101 or 99, now they're gonna have eroded trust. And so we know that ultimately high levels of service has become table stakes. And in tomorrow's economy, it's an experience -based economy. We have to have human connection with the people we serve beyond the interaction and beyond the transaction. And it has to be an emotional connection. And we have to double down on that from a human connection perspective. We did that because we're member -owned. That's the strategy I brought here 10 and a half years ago.

to say, we're good at that, let's go figure out how we go to great on that and take it even further. I give a stupid analogy of like, I think the cooperative business model is like a race car and credit unions drive it around the neighborhood. How do we get it out in the open road a little bit more of saying, actually you're sitting in front of an owner every single time. We can have and care about them well beyond the interaction and a transaction. We have a ton of strategies for another podcast. Someday we can always share with others to say, how do we think we've developed that? It also keeps you out of other people's sandboxes because

Larger institutions don't spend as much time there as we do. We're closer to our members. We have more intimate relationships. We have higher levels of loyalty today. We'll see how long that lasts, because we do measure that as well. So ultimately, as long as we ask the question, I send out 18 ,500 emails at the end of every year, roughly. We get about 2 ,300 responses from our consumers, which gives us really, really good data to give. And if we're listening to that, and we're responding to that, and we're talking with our members to a place, I also can impact culture.

better than the large financial institution down the street. They're like a cruise ship that's really hard to turn. We're like a speedboat that can turn on a dime. I can get every one of my employees in a room on a monthly basis at any time that I want, which means I have more influence over culture than the big institution has. So they might have more money to spend. I might have more influence on culture. So always know your value proposition. Know what your strengths are. Don't complain about your weaknesses compared to other people. You have to understand those. But what are your strengths? What are you banking on? And what are you driving as you move forward?

Jed Meyer (42:54.728)
That's how you develop your value proposition and differentiate yourself. And in a world where you basically, when you go to the grocery store and you go to the gas station and you go all these places, you don't have to interact with the human being. We actually have a unique opportunity to say actually a human connection, which is by the way, our vision right now is to create a strong human connection through meaningful difference interactions, right? Meaningful difference for the person in front of us. It's purposeful action within our community where we're not looking for short term ROI. We're looking to be the fabric of the community and

Who doesn't want a bank with a financial institution who acts with authenticity for the goodness of others without expecting anything in return? And I will share one last thing. The fastest way to get your core values to stay on the wall is short -term ROI business decisions. And I think that's the piece where smaller institutions, if you're willing to play the longer term ROI, it will make you successful in the long term, especially as a smaller institution of saying, we want to be great experienced.

We want to make it feel different to our consumers as they come through it. And by the way, when we do that, they also go tell a hundred other people. it's a great business strategy too. But when you're faced with a business decision that's counteractive to your culture, that's where the rubber hits the wall road. Are you going to kick your core values off the wall? Are you going to let them stay up there so you can have more and stronger short term ROI? And then ultimately people get 10 years down the road and they're like, where's my culture goal?

Well, was death by a thousand cuts because it's where I was. So that's another piece of advice. Focus on the long -term ROI. Don't abandon your strategies, your cultures when short -term business decision might want you to abandon them for a short -term financial gain. Go at things from a longer -term ROI perspective of what you're investing in. Believe in yourself. Know that it will resonate and the financials will follow that strategy. We've proven it to this point. We've forexed and we have no sales strategy on the front end of our business.

I actually took data away when I first got here because I said I want you to focus on human connection. And I know as a leader I get what I measure and so if I stop measuring checking accounts and all those things in the front end and said build human connection with the person in front of you, do what's in their best interest every time and they'll want to do more business with you at the end of the day. We have to add data, we have to add structure and so we're going to have those same scaling struggles as we get bigger and we're experiencing them. But don't forget about the power of the actual ability of you get what you measure, have talented people.

Jed Meyer (45:15.762)
I very seldom in my career gone and asked a group of talented people not to give me something. They always give me that or better back, right? That's my experience in leading people as long as they have enough resources and empowerment to do so. And you allow them to make some mistakes along the way. So at the end of the day, what's your long term ROI? What's your value proposition? And ultimately, how do you go there and keep the courage from your quality of your actions and integrity and intent while you go through that journey? And I think it'd be just fine.

Joe Crist (45:41.942)
I love that Jed, absolutely love that. Well everyone, I hope you enjoyed that as much as I did. I learned so much, not just about the financial industry, but about how to be a great leader, right? Jed, once again, thank you so much for coming on and not just like me, but inviting their audience and everyone out there, stay tuned for another exciting episode next week of Thriving the Digital Age and keep learning. Have a good one.

Jed Meyer (46:07.54)
Thanks for having me.