How Community Banks Can Beat Big Tech Without Losing Their Soul
By Justin Estes, Contributor at The Financial Brand
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Executive Summary
- On a recent episode of the Banking Transformed podcast, host Jim Marous spoke with Sumeet Grover, executive vice president and chief strategic growth and digital officer at Austin-based University Federal Credit Union, about how community institutions must balance rapid digital innovation with personalized service to remain competitive against fintechs and digital-first institutions.
- Leveraging AI and first-party data enables more personalized engagement, greater operational efficiency and lifecycle-based marketing strategies.
- Strategic agility and continuous member feedback empower institutions to adapt quickly and drive smarter, sustainable growth.
Q: What are the biggest obstacles financial institutions face in customer acquisition and growth?
Sumeet Grover: Great question. I’ll actually put it in three buckets. The first is tied to what you just said, privacy-driven targeting and data. The challenges have evolved and so have acquisition and growth expectations. When we examine iOS platforms, third-party cookie laws and so on, how do we consider those privacy-driven targeting limits and manage around them?
Second, behavioral fragmentation. One of the research studies I recently came across found that 71% of Gen Z use two or more FinTechs, neobanks, or financial institutions. So, that behavioral fragmentation doesn’t make acquisition easier; it makes it more complicated and generates more noise in the system.
And third is commoditization. Most financial apps now offer similar features, table stakes; it’s not about the bells and whistles. So, growth depends on that contextual relevance via either first-party data or journey signals.
Q: How do privacy regulations and behavioral fragmentation complicate traditional marketing approaches?
Grover: The challenge around cost of acquisition or CAC — that CAC isn’t rising because of cost inflation, Jim, it’s actually rising because of contextual decay and that’s where we need to break through that noise and personalize right.
However, my focus is more on moving away from mass marketing and that has been the case, whether at Citibank, Alliant, or now at University Federal Credit Union. How are we being extremely member-focused and pivoting from that mass marketing to precision lifecycle modeling using that data?
Building a Member-Obsessed Culture
Q: What was the first thing you did when you joined UFCU to establish your platform for growth?
Grover: Great question, Jim. The first thing to consider is embedding member feedback into every decision you make. And then this is agnostic of the channel; it doesn’t matter if it’s a branch, digital, or the call center. I want all channels to provide first-contact resolution, but I also want all channels to build trust, which comes from understanding member feedback in the channel of their preference.
And clearly, as I want to manage my operating expenses and consider my acquisition costs, I’ll switch between channels to find the most effective approach. However, I want to be member-obsessed.
Q: How do you embed member feedback into every decision across all channels?
Grover: And being that member obsessed means looking at member data, understanding their needs, embedding that feedback into product sprints and roadmap decisions, creating those journey metrics, which we usually don’t look at.
Sometimes, we look across institutions, I’m generalizing here, at NPS (Net Promoter Scores), OSAT scores, or member satisfaction scores, but are we also considering journey metrics from an impact perspective?
How do we drive a design and measurement approach that’s impactful with the least possible effort, while understanding the consumer’s sentiment and driving the outcomes we are focused on?
How do we create that closed-loop personalization and use member interactions to shape both the messaging and the member experience? That’s my primary focus. Being member-obsessed doesn’t mean you listen louder; it means you adapt faster.
AI’s Four-Pillar Impact Strategy
Q: How is your organization approaching AI implementation and where do you see the most significant impact?
Grover: Love that question, Jim. We couldn’t have a conversation without delving deeper into AI, so I appreciate that you’re going in that direction. Let me address it from four perspectives. The first one is engagement. We briefly discussed acquisitions, so let me delve a little deeper into engagement.
AI models can now predict lifecycle needs. How do we implement them and make that extremely effective so that next-best personalization, whether it’s onboarding, cross-sell, up-sell, down-sell, or even overall financial wellness, is a no-brainer? Let’s utilize that modeling to predict lifecycle needs and let’s be where our members need us.
Second, from an efficiency standpoint, we look at AI machine learning, RPA — we can cut processing time by 20, 30, 40, 50% (pick a process and we can go up to 80%), while ensuring that we have a net positive member satisfaction score, while flagging the right risk criteria, while minimizing fraud and delivering back end automation and efficiency so we can do more faster and seamlessly for the members.
Q: Can you explain your “Three Rs” formula for AI orchestration?
Grover: The third bucket I would put in terms of data and intelligence, so that real-time intelligence can be used in conjunction with AI capabilities — a member context engine can trigger proactive offers. I’m looking at app browsing or a credit poll or a behavior on an action I’m taking, either on my app, my browser site, or even on a third-party web and based on that, I can demonstrate what the next in-app offer should be for our members that’ll be timely enough.
And then, finally, I’ll put it forward-looking and thinking through how AI can drive dynamic underwriting with cash flow insights, how I can use AI coaching blended with advisors in wealth management and how I can utilize federated learning, all within regulatory compliance and frameworks.
So, finally, what I would say is that AI isn’t just about automation; it’s about that orchestration —the right conversation with the right member at the right moment. That’s my formula, I call it the three Rs. That’s how I think through that.
Q: How do you balance AI and automation with maintaining community-focused relationships?
Grover: Hey, it’s giving me tools to make it even easier. So, I think of it across channels. It doesn’t matter if I’m on the phone or in the branch; I know my member and I’m building my relationship through a one-on-one conversation, either in person or over the phone.
What’s the key I’m using over there? It’s the data, information and insights that I have about my member. I know so much more in the digital landscape that once I feed that in, I can have very smart, interesting conversations with a member from a 360 perspective, where I understand so much more about them.
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Attracting the Next Generation
Q: What specific strategies is UFCU using to attract millennials and Gen Z?
Grover: That’s an interesting question and I think a lot of credit unions and banks are asking themselves the same thing: how do you cater to the younger generations, who are going to be the bigger population that you serve? How do you bring them on board and how do you kind of handle them?
At University Federal Credit Union, I have that advantage. We are based in Austin and we have a very young population here, allowing us to enjoy the best of both worlds. We cater to both generational members and newer members who are either pursuing education or starting their first jobs and thinking through these experiences.
And they have grown up being extremely digitally savvy. They have grown up in a digital world, but I do see them coming to branches. Because Jim, when you’re taking your first auto loan, because now you just moved out of home and you’re at a college, who’s walking you through the process and helping you understand you’re making those right decisions, the right financial decisions.
Q: How do you leverage Austin’s young demographic and university connections?
Grover: Understanding those bundles that you can create, aligning them to their product and life stage needs. So, if you’re a graduate, you’re renting and you’re thinking about your first job, what financial wellness products or services do you need?
Then we proceed to the actual account opening process and eligibility. Mobile onboarding takes less than three minutes and the technologies are in place today. So, if I’m making it harder, I’m not serving the population’s needs in a faster, adaptable, flexible and safe environment.
However, I’m also considering student ambassadors and creators who can help drive social media presence on platforms like TikTok, Instagram and YouTube, as social media has evolved. We often receive financial advice from social media and we want to maximize our chances of getting the right information and catering to the universe in the right way.
The Vision for Technology Leadership
Q: What does it mean to become the most technologically advanced credit union in America?
Grover: Correct. It’s when I become natural and organic. When I’m not focused on competition and when I’m not focused on it, is my app downloaded on your phone or not? And it’s not when you’re thinking about me; it’s very different than social media apps.
,For instance, if you’re on one of the social media apps, you’re there and consuming content. When you’re at a financial services app, you are there for a transaction, you’re there because a need has to be met and how can I do it organically where you’re not always thinking about, “Oh, I have to go to the branch or I have to call and I have to fix this situation, or I need to understand if my paycheck came in or not.”
Q: How do you make technology feel organic and natural rather than forcing adoption?
Grover: Let’s drive that digital self-serve; it makes sense. Let’s drive the education and the channel of preference of the member. Let’s understand their proactive needs and wants and make it so organic that it’s a part of their day-to-day life. Not for the sake of technology, but technology as an enabler that drives financial wellness.
Jim, the end state is organic; they have a need, they go to my app, they visit the branch, they call it my call center, or they use my automated chat, whichever platform is preferred to them. Their need is met and the golden rule here would be to let it be a first-contact resolution and then it’s a win-win.
Q: Looking ahead two years, what single factor will determine growth success?
Grover: Okay, single most, maybe I’ll put it as strategic agility, organizing around the signals from our members and acting really fast, being dynamic. The future belongs to institutions that can turn those member signals into action before the competition even sees them.
