There's a better way to cut the Gordian knot that is technology integration: Working from the outside in. This approach prioritizes the digital experience – the layer that is most critical to member retention – as well as getting the transformation process right instead of focusing only on creating a single underlying system. Further, it helps eliminate the contingencies that link the three layers of technology together, ensuring the entire technology department is equipped with the tools and resources it needs to tackle multiple problems at once. In the near term, credit unions will be able to reap many benefits, including:

Eliminating friction for the member and employee. Breaking the digital experience away from the data and API layers allows credit unions to quickly implement changes that help ease the post-transaction transition for the end-user. Members and front-office employees don't see – and arguably, don't care – about the back-end processes powering the digital experience. What they do see and care about is how easy it is to log in, to navigate the interface and to find the information they need to do their jobs and complete a transaction. It is critical to get this right in the early days of the integration period to avoid member attrition and employee frustration.
Allowing innovation to thrive. Much of a credit union's innovation happens at the API/services level, where new products, services and solutions are born. And innovation is what ultimately will keep credit unions competitive as the market continues to evolve – which it will do, regardless of where an organization is in the process of integrating data apparatuses.
Remaining nimble. Just as the market moves quickly, so does technology. Abstracting the various technology layers away from each other allows the entire organization to adopt new solutions quickly, versus requiring every layer to be overhauled just to bring a new technology online.

From a long-term perspective, the main benefit of the outside-in approach is that it allows credit unions to own the integration process in perpetuity. By breaking the underlying processes away from the systems themselves, credit unions can actually own those processes, create digital equity and lay the foundation for integrating new technologies (or businesses as a whole) smoothly and quickly again and again, while retaining the same level of member experience. Creating this digital equity and owning the digital process independently of any one technology system can play a major role in future M&A strategy, mitigating the risks associated with post-M&A integration and ensuring the continuity of member engagement over the long-term – effectively helping credit unions to "out-merge" the competition.

Instant Insights /

Cutting the Gordian Knot: A Counterintuitive Approach to Post-M&A Digital Integration for CUs

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