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The 2023 Economic & Payments Forum has officially begun! This year, the conference kicked off with a session conducted for the first time, a Fireside Chat with Catalyst executives.

Like many of our credit unions, Catalyst’s executive management holds an annual strategic planning session. This year, Catalyst decided to share with Forum attendees some of the major topics covered in that session.

Executives participating in the chat were Bruce Fox, CEO; Diana Hennel, CTO; Mike McGinnis, CIO; and Brad Ganey, COO.

Bruce kicked off the session as the moderator, prompting the other three executives with questions in their areas of expertise.

Chief Technology Officer Diana Hennel

Hennel reviewed Catalyst’s longer term technological strategies, going back to technologies discussed five years ago that have since been implemented. Then, she addressed how that conversation has evolved and what Catalyst priorities are moving forward.

She addressed three major topics. The first was updating and rebuilding the user experience for some core products, most notably TranZact. Generative AI is also a major technology that needs to be carefully researched for its potential use cases. Finally, cybersecurity continues to be of utmost importance.

Chief Operating Officer Brad Ganey

Ganey discussed the future of faster payment services. Solutions are quickly progressing, and Catalyst has been positioning itself to serve credit unions’ future needs. Catalyst’s acquisition of Aptys Solutions has been a major contributor to the conversation.

“We wanted to have control,” Ganey said. “We wanted to make sure the entity we went with for these solutions could grow alongside us and remain a continued strategic relationship for the future.”

Current services also merit significant attention, Ganey said. “Checks aren’t going anywhere anytime soon. A lot of transactions still occur via check every day, and payments are a business of scale.” Checks still have a place among other payment channels, proven by their continued use and scale.

The various payment channels make prioritization a challenge. “We have dedicated staff that specifically focus on improving the TranzCapture deposit software. We’re still putting more money into enhancing that platform.” Even if checks are on their way out, they cannot be completely replaced yet. “Does a check processing service help grow your membership?” Ganey asked. “It’s a necessary service.”

Chief Investment Officer Mike McGinnis

Lastly, McGinnis touched on the current tight liquidity trends seen in the credit union space. “Our liquidity challenges really started back in 2020, when we experienced the opposite problem with an immense influx in deposits.”

“We are seeing a trend now where direct financing has really stepped in. Credit union lending is still growing, but it’s tapering down as direct financing is stepping in.”

“In our SimpliCD program, we put out about $380 million in certificates the latter part of 2022, but we’ve already placed $580 million on behalf of credit unions in 2023. That’s just Catalyst, liquidity is very tight.”

With liquidity the primary challenge for most credit unions, McGinnis specifically mentioned subordinated debt as a major consideration for credit unions. “Even though issuance rates are higher, your earning assets are also going up. These strategies can still be viable in this rate environment if your overall strategy is sound.”

Tune into the 2023 Economic & Payments Forum

The Forum Fireside Chat provided insights into the conversations happening at Catalyst that may help credit unions’ strategic planning sessions as well.

With Forum starting off strong, this year’s conference still has much to offer. It’s not too late to tune in. There are still many CPE credits to grab before the end.