Gathering and analyzing data is incredibly important for credit unions to improve everything from their services and member experience to operational efficiency. However, finding that data has become increasingly challenging due to mergers, the COVID-19 pandemic, and branch closures. That’s where The Credit Union Data Exchange, or CUDX, has stepped in.

Sarah Snell Cooke talked with Tom Davis, the Acting CEO of CUDX and the full-time CEO of Trellance, about the creation of this data exchange and how it can help credit unions determine what their members need most. Credit unions’ renown collaboration was critical for this new endeavor.

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Sarah Cooke 00:00

Welcome, everybody to this edition of The Credit Union Connection. I am your host Sarah Snell Cooke. I am here with Tom Davis CEO and President of Trellance and Acting CEO of CUDX. Welcome.

Tom Davis 00:25
Hi, nice to meet you. Nice to see you again.

Sarah Cooke 00:27

Good to see you as well. So, um, you've got this exciting new thing going on with CUDX, which is why I wanted to reconnect with you. So give us give yourself a little introduction about Trellance and its role in CUDX and how CUDX came about and what it is.

Tom Davis 00:43

Sure. So I've been around the credit union space for actually 20 years this month. As far as being at Trellance, we used to be what we used to be called CSCU back in the day. So, started in 2004, pretty deep history in payments and such. But even before that, back in the 90s, I was a, I worked for a consulting company. And we built a solution for credit unions through a company at the time called Equifax that eventually became Certegy that partnered with CSCU and and that company built a data analytics solution back in the day to help credit unions understand how their payment portfolios work. And it was a simulation-based tool. And so that's sort of how I got my start back in the late 90s, in the credit union space. So I've been around I guess, around 25, a little bit longer than that years, that's probably telling my age, but I'm sure my hairline, wrinkles in my face, too, as well. So I've been around for a long, long time. And like I said, most of that was in and around payments. And then of course in about 2017-18 timeframe, we sort of moved away from sort of, you know, focusing just on payments, and really trying to help credit unions understand their data journey. And you know, it's something that's going on a long, long time. And it's certainly seems to have changed quite a bit lately. And then, you know, with the, you know, oncoming of AI and large language models, and all these things that we talked about today, you know, big data has always been at the center of it, it's always been something that I've always had at the center of my career. And so I've enjoyed the journey with credit unions and data. And I've built a pretty big team here of people that are a heck of a lot smarter than me and data and surrounding myself with that. And then we've extended that team all the way around the globe, we actually have, you know, some folks even in India, that have joined us in the last three or so years, to even further help us in our data analytics journey. So Trellance is a pretty cool place if you want to talk about credit unions and data. So

Sarah Cooke 02:39
yeah, and so out of that, and I believe it was out of one of the Underground sessions you had mentioned before, came this idea for CUDX, what is it?

Tom Davis 02:48

So, last year, and you know, we've, we've acquired a number of companies and over over our time as Trellance, I'm really trying to wrap ourselves around how to get credit unions to look at their data and the data around them, in order to be able to you know, know their members better. And it's, it's harder and harder to know, our members, especially with things like indirect lending, and, you know, with, you know, branch closures because of you know, pandemics and, you know, expanding our field of membership, and you know, data is just becoming much more important. And so we've spent a lot of time and money around building those solutions. And what we realized is, is that, you know, it's about the network of data, that is sort of the next evolving steps. So when you start to think about Chat GPT, and how it's able to network data across the whole entire web, and not really worry about where that data comes from, in order to be able to build these really super powerful AI tools. You know, the credit union industry sort of is on the cusp of that evolution as well. So we're getting better, as you know, individual credit unions looking at our data, but how, how is it that that network of credit union data, you know, within the credit union movement, and then even outside of the credit union? How do we get? How do we get to that level? And that that's really what, you know, was the idea of the Credit Union Data Exchange, it's about, you know, the collaborative benefit that credit unions have that sort of that's in our DNA and culture, can we can we tap into that, and then, you know, sort of have the next level of evolution that, you know, some of our products and services already do for credit unions and became a network that together and then again, extend that even beyond the credit union space. And so that's sort of where it started, you know, back in, I guess, it's right around a year right now that that, that concept sort of came to life, and we made an announcement in May of last year around it. And so it's, it's catching on pretty quickly for something that's sort of new, but I guess that's sort of the way this space works. So

Sarah Cooke 04:42

yes, technology just moves faster and faster, which is exactly why this is perfect because of the data, the collaborative nature. And you know, it helps credit unions remain relevant to their members in a modern way while holding, sticking to their roots, right. It's just knowing your members just that much better in the new digital world. So what's the current status? You said? It's been about, about the year anniversary? What's the current status of the CUDX? Good

Tom Davis 05:08

question. So I'm in I, when the ideas sort of came to fruition, we flew up to Madison, the team here in a Trellance and met with the team up at Filene, in their innovation lab, and they were just just rounding out one of their centers of excellence around, you know, credit unions and data. And so we met with some of their team that had been working on that center of excellence. We pulled in our team of you know, basically engineers and builders and visionaries as well. And you know, Mark Meyer and I and, and the lady named April Clobes from Michigan State, the three of us put our heads together and said, you know, we've, we've got good people around us, and we think we can do something here. It came to came to fruition really, really quick, we announced it at a Filene Spark event. And then, the next week, we, you know, rereleased it, announced it at a Trellance event. And then the next thing you know, we had credit unions that are saying I'm in I'm in I'm in, and legal had to catch up with us and saying, You're in on what right, and so we spent some time forming a CUSO. You know, in the summer, we put together a board in that summer as well. And then we started to assemble what I would call credit union councils, which is really the folks in the credit union, that understand how data can make a difference for our members. And so we put these counselors together around three different areas of competency, one of them being around security, you know, that's first and foremost, right? We got to make sure that this data is protected, that we understand what privacy and security looks like in an exchange. Then the next one was around governance, you know, who should be able to see this data? How should this data be organized and shared? What are the rules around that data that would be available to credit unions? And then then the one that's really important as well is what are we going to do with it? The research the innovation, you know, what, what kind of use cases are we going to go after, and so we assembled these councils, and put them together, they started meeting in the fall, they now have met in-person two times, they I think, are making monthly phone calls, I've now got folks within these councils that have sort of have governance within the councils, they've established charters. And so we've got some, some formation and some structure around these councils. And they've actually now released some research, some criteria, if you will, of how they're going to measure which use cases to go after first. And we actually have a POC. And so within one year, we've been able to form the, form the governance form, the actual CUSO, put together the councils, get some research ideas together and form a POC and it edge here in a couple of weeks. We're going to release that in Nashville, about what, what kind of things can a shared data set across credit unions look like and what can it do. And it's super, super powerful and super, super exciting. And I don't know of anything that's come together that fast in the credit union space that I can recall in my 20 plus years. So we're really, really happy about that, I would love to take credit for it, but it's not me. It's really around, uh, you know, me getting with, you know, Mark and April. And my board, the Trellance board being super supportive, the Filene board being super, super supportive. April, sort of sitting in the middle of that, because she sits on both of these boards and being so innovative. And so, you know, just sort of energetic in her own way. And, you know, and then really about surrounding us with really, really good people to get us this far this fast. Yes,

Sarah Cooke 08:42

quite the credit union and brain trust there between the three of you. So, we've talked a little bit about why it matters for credit unions. In the bigger picture, though, why does why does this matter for credit unions? Why does, why should they participate? And what does it do for their members in the end?

Tom Davis 08:59

Yeah, you know, that I think the use cases are almost countless, I wish I could, you know, lay them all out and say, hey, you know, these are the, you know, whatever, it's going to be 10,20, hundreds, 1000s, whatever, it's, it's going to be, use cases. And I think what's really important is, is that I didn't try to do that. Nor did I asked my team to try to do that. Instead, what we did is we put these councils together, that's the heart of the exchange, as much as the data is the heart of the exchange, it's the people that work at the credit unions with these members and understand, you know, how they do things because there is a little bit of God in it. You know, there's a little bit of guess game in what is the right use case and you know, what does that look like and getting into a room and having a nice healthy discussion and debate over you know, what is the way the best way to use the data is really the most, I think one of the biggest assets of the exchange. And so it's really the councils, it's really the Research Council, the Governance Council and the Security and Privacy protection councils that get together, that decide what can make a difference for members and be honest with you, if you're working in the marketing area of a credit union, you might think about getting new products, if you're working in, you know, in, you know, in an area where it's more about finance, it might be about, you know, you know, how do I get loans or, you know, better rates or things like that. It could be across a wide spectrum. And it is across a wide spectrum. I think the research council has somewhere in the neighborhood of 15, to 20 initial research, you know, innovation ideas. We really spent a lot of time on our first POC around, you know, trying to understand a number of different things, but, but really, how do my members interact with my credit union may be different than other members interact with other credit unions. So what can we learn from each other? And then the other thing is that we spent some time just trying to understand is, where does my member enjoy interacting with my credit union? Or maybe get more value of interaction with my credit union? And where did they maybe get more value interacting with other financial service providers? And what can we learn about that? So for example, you know, am I getting? Am I sending an auto loan payment, you know, from my credit unions, you know, checking account or, you know, debit accounts or whatever over to pay an auto loan with a bank? I mean, why didn't they get that loan with their credit union? So it's really understanding the member behavior where we see it, and then where we may lose visibility? And can we get some visibility and understand, you know, why did they make those decisions? And how can we better serve those members, that's sort of the initial sort of POC that you're going to see, in at the Edge conference, I think there was a handful of dashboards that they looked at that help sort of understand get that a little bit more holistic picture of what my member is doing with me, and what my member may be doing with others and why. So,

Sarah Cooke 11:43

yeah, that's a lot of data throw somebody too. So, like being able now keeping it to that 15 to 20. For the moment. Yeah. Good idea. So how are, how are credit unions responding? And how many are are currently involved? I mean, you mentioned MSUFCU, always very innovative, and what are those credit unions look like?

Tom Davis 12:04

Um, so they're sort of all over the spectrum, we've got about 30 credit unions that are involved, most of them are sitting on one or more councils, we are, you know, we sort of, you know, wanted to limit it, because obviously, you don't want to try to do everything to everyone. So Trellance and Filene are heavily involved, we're looking at other partners like Trellance and Filene, that might be interested in joining. And then obviously, we're going to have now a POC, so we'll be able to roll that out to other credit unions, where they can sort of see what it, what it could look like, it's hard, conceptually looking at a PowerPoint deck, understanding what a shared data set can bring. But once you start to bring these POCs to life, and they actually work and they can start to play with them, we sort of expect that 2024 and beyond, we're going to start to see more and more credit us want to, you know, push some data into this. It's real easy to participate. It's a little bit harder to get on the councils and you know, try to innovate, that takes a little bit more time. And then, of course, the other level of participation where credit unions actually investment. Right now, Trellance is funding this, to try to get it up off the ground. It's it's a gift to the credit union community, we are a cooperative, Trellance as a cooperative, but we established this as a separate cooperative, a separate CUSO with the intent that if the credit unions want to own this outside of Trellance or Filene, they certainly could do so. If they want Trellance and Filene to partner and continue to invest, both of our boards are amenable to that. If there are other entities out there that want you know, that serve credit unions or and share our passion around the credit union movement, and they want to be part of that they're invited to you know, to participate as well. So yeah,

Sarah Cooke 13:36
that's, that's awesome that everybody can get involved. Is there, How do they do that? Well, is there a link or something? Share that.

Tom Davis 13:45

Yeah. So CUDX.com, CUDX.com is, is wherever they can go and fill out a form. And then we've got some folks so so between Filene and Trellance, we're staffing the CUDX organization right now, as you said. I'm the pro bono CEO of CUDX. It's not supposed to be forever. It's supposed to so I can get it moving and get it going. And then I'll go back to my day job. But you know, so right now we've got about, I'd say about eight or so people here at Trellance that are spending a good amount of their time on trying to get CUDX up and running. And then Filene it is contributing some folks as well. Mark Meyer and I talk, I actually he was texting me right before I got on this call about some folks that are interested in you know, helping us out and getting the word out and maybe even sharing their data and doing some other things. So right now, that's sort of where it is right now. We're, you know, we're very focused and very committed to this. But CUDX.com is the place to join and get involved if you want to.

Sarah Cooke 14:44
So, are we going to get a peek at any of the POCs?

Tom Davis 14:49

on this call, I'm not ready. I'm not qualified. But I can certainly make that, I could certainly get you something where you know, we can get some folks from here at Trellance. We've been doing demos now for, ever since GAC, is when we started doing the demos, and we can get you on there. You know, we can do a five minute demo, we can do a 30 minute demo, up to you if you want to do something specifically on the demo. But yeah, they can get it up and running. Of course, Edge, we're going to have, you know, a lot going on at Edge where we're going to have some breakout sessions. I'm sure you're familiar with our Edge conference in Nashville, I plan to be there. Yeah. Okay, perfect. Yeah, that's a great place for, for what we hope happens at Edge is we're going to have the councils there. So they can start talking about why they may have prioritize one use case over another and how they are going through their, you know, mechanics and their charters and things like that. And we would hope that if, if somebody's really interested in being part of the councils, in joining the movement at you know, more than just a data share or data participation level, Edge is a place to go. Get in the room with these people, it is supposed to be a credit union movement, it's it's supposed to be just like this, a grassroot movement through the credit union, understanding how shared data can benefit the credit union and benefit the members. You know, as Mark Meyer always says, Put the credit union the member in the center, and then let's have that healthy conversation. And that's actually going to happen at Edge. So more than just a demo, but actually getting in there and breathing life into it. If that's something that anyone that listens to this is interested in, we absolutely welcome, welcome that, like I said, Go to CUDX.com fill out a form, you know, there's a place to put in some notes and say, hey, I want to be part of the conversation in Edge. And we'll get in there some.

Sarah Cooke 16:20
Excellent, excellent. So where do you see this a year down the road?

Tom Davis 16:23

You know, a year down the road, I see a, hopefully a more formation of the actual people that work for CUDX, where they're actually employed by CUDX as opposed to Trellance sort of, sort of directing to where the credit unions can start to take over there, we already have a board in place to govern. We, and we would expect that to continue to evolve and and that you know, maybe a new CEO is hired one that that really can work specifically on what the councils want, want to see move forward. We'll probably see more participation within the councils, we'll definitely see more credit unions participate, we already have a pretty large pipeline of credit unions that are ready to participate, we're going to see the release of you know, bylaws and membership agreements in May that credit unions could start to sign. POC agreements will be available in May, meaning if a credit unions wants to participate and be part of the proof of concept, that is something that's going to be available, made it look that credit unions will be able to start to sign. We'll have investment agreements available in May. So we're going to see a lot of formalization crystallization of CUDX and a lot of independence. Within CUDX, we sort of give this gift to the credit you community and, and a lot more credit unions signing up, we expect somewhere between 50 and 100 credit unions will be participating data, you know, by the end of 2024. So, yeah,

Sarah Cooke 17:46

and again, it just the fact that it's so collaborative is so important too, I think the credit unions. So I always allow guests final thoughts, you get to wrap it up, I try to keep my mouth shut. But yeah, Tom, take it away. What are your final thoughts? Anything we missed anything you want to make? Sure we discussed? You

Tom Davis 18:05

know, I think, you know, I'm a credit union person, a majority of my career, like I said earlier has been spent in the credit union space, I think it's a unique industry, one that you don't see a lot, you know, where collaboration and cooperation rule the day. You know, there's a lot of, you know, consolidation in the credit union space, there's a lot of scary things that, you know, that are going on in our environment. And you know, it's, it's, it's really, the thing that helps me sleep at night is to know that I don't have to go it alone. And that I've got great people around me, that will look out for me, and I can look out for those people. And if that doesn't make you feel good, I don't know what, you know, what, what wouldn't, you know, make what would make you feel good. So I think, you know, that's what CUDX is all about. That's what I'm all about. That's what the people that are around me are all about. And I really hope that we can all get together and look at, you know, what's going on with, you know, things like AI that are daunting and unknown. And, you know, very difficult for us to define and see how we can get together and make these things work. I'm a technologist at heart. I'm an engineer, I'm a builder. And I'm here for the movement. As you know, as I said at the Underground, I'll do anything and everything I can to try to help move it forward, you know, where my strengths are, is around building and building teams and building solutions. What I need help with is, you know, knowing where those solutions would make the best impact necessarily, for folks that may be underserved or maybe forgotten by our financial system, and how can we, you know, make the regulatory environment work better for us and work and where we can work better within it. You know, those are the kinds of folks that you know, and the list goes on and on of the people that I want to surround myself with, to get the message out and work together. That's who we are. That's what we are. We're a cooperative. Trellance is there for the credit union movement. Our board is certainly been very, very generous and very helpful in helping our team be there for you. And so I just look to be part of the equation and and I'll do anything I can to help you know how to get a hold of me, just call me and let's see what we can do

Sarah Cooke 19:56
together. So excellent. Thank you so much for your time today, Tom. Appreciate it. it hey

Tom Davis 20:00
I appreciate you calling me and allowing me to be part of this

Sarah Cooke 20:04

Thank you.