Episode 408: Modernizing Payments with Canberra Institute of Technology

We know now that people everywhere are used to online payments and online interactions. And really, I say look to that model. Look to your Amazon shopping cart, for example. That's the model that students want, to be quick and easy and straightforward and not intrusive at all. Welcome to Focus, a podcast dedicated to the business of Higher Education. I'm your host, Heather Richmond. And we will be exploring the challenges and opportunities facing today's higher learning institutions. Today, I'm speaking with Karl Caig, and the Canberra Institute of Technology, about modernizing our payment system and the transformation and improve experience for both students and staff. Hi Karl, so great to catch up with you today. Thanks. It's great to be here. You know, we've been talking about getting you on the podcast for quite some time. And I'm so glad we were finally able to make it work. So we have a lot to talk about today. But can you go ahead and give us a quick overview of your background? Sure. So I've worked in a variety of industries over the years. So my background is primarily in accounting and finance and IT. Certainly I've done a lot of systems development, a lot of financial work, a lot of business restructuring, as well. I've worked in a lot of industries, from biotech through to research and development, economics consultancy, public/private practice accountancy, government, and now education. Wow, that's quite a list of industries you've been in there. How about now let's talk a little bit about CIT and the students that you serve. So CIT is what we call in Australia TAFE, which, to those in the United States, it's similar broadly to the community college model. We do above and beyond the college community college model. In terms of educational space, we do a lot of the traditional trades in what we call the apprenticeship model here in Australia, which is where students do a combination of theoretical and hands on learning between both us and an employer that they're working for. We also operate in the higher education sector, particularly in the university space, we do offer a degree in Bachelor programs as well. This does mean that we're a fairly complicated organization. And it does present its own unique challenges. Absolutely. Well it sounds like having that variety of educational programs definitely makes for probably a pretty complex payment system. So can you talk a little bit about maybe how that's impacted taking payments across campus? That is certainly one of the trickiest parts for us to operate in, unfortunately. Because we operate so many different educational levels, we're regulated by different levels of government, especially when it comes to funding and student payment for those programs. We've got programs that students pay the full fee for we have programs that are subsidized by our local state government, we have programs that are entirely free, subsidized by the state government under a different scheme. We have apprenticeships, which have their own particular contestable funding, where we have to actually compete for that funding for each student. We have other programs where the student has to pay a full fee, but they're eligible for a government subsidized loan. All of these operated by different government departments at different levels of government, both federal and state. Obviously, the communication between those departments and those levels isn't as great as it could be. And the systems don't always talk to each other. So we've got lots of different funding buckets, as it were, to support these students. A lot of different impacts on what the students have to pay. And obviously, that makes our payment model fairly complicated. I don't know, Karl, that doesn't sound very complicated at all. I'm just kidding. Well, so I know a lot of that was probably your motivation to really looking at how do I get my arms around this and really having a new system in place to help manage all those different payment sources, right? That's right, what we had was as a result of evolution over many years was essentially a very real manual system. Often payments had to be calculated manually, even when they could be done automatically. Various options had to be applied manually particularly if students were eligible for one scheme, but they needed to apply for a scholarship or fee assistance, or to verify the concession status, if they were eligible for concession under that particular scheme. And just because they're eligible for a skills, concession under one scheme, doesn't mean that are eligible for concession under another scheme. So there's a lot of manual handling and a lot of manual intervention. And then that just compounded when it came to the actual process of taking money off students, which again, was a very manual for face to face process. Yeah, I bet and, and I know that probably on one side, when you said, Gosh, I really need to get a system in place or a new solution. You know, implementing any kind of new system is a lot of work. And so sometimes I know that's probably where that there's a time delay or reluctance to do that. Was there really a breaking point other than all the complexity we just talked about? That's like, stop this has just got to change? Well, I don't think there was one particular breaking point. It's almost like boiling the frog but just a little change at a time and little change at a time and a little change at the time building up over the years and eventually, we got to the point of going through yet another issue that had come up and trying to resolve it. And just taking a step back and realizing the mess that we were in. It was several years ago now. And we were certainly looking not just at where we were now, but also looking towards the future. Really, we just relaunched a new strategic plan for the Institute, and certainly a real focus on that customer service on the digital online enrollment processes. We're expanding into the online environment, as many educational institutions are. And clearly, when you're going into that space, the online space with any force, it's not an option to force people to turn up to your campus to make their payments. Yeah, you're going to have an option for them to do it at their time, right? And in their way. That's right, if you're offering an online enrollment model where students don't have to set foot on your campus it somewhat defeats the purpose if they then have to set foot on your campus, just to complete the enrollment process. That's a really good point. So just kind of curious, though, since this really, you know, probably impacts several places around campus, can you touch on maybe how this decision was made. And if there was a committee or who all was maybe involved to really make this happen? It was interesting, it's almost a ground up initiative at CIT, while we certainly had the strategic direction set by the board and the executive, a lot of grassroots staff across the organization, were becoming increasingly and acutely aware of some of the issues we were facing. And so in my level there was trying to operationalize the plan and looking at the issues that we were currently facing. So it really wasn't one person's decision, it was probably more mine than anybody else's. But it really was the Institute as a whole almost decided, at the time that we really want to get into this future, we really want to move in the strategic direction we've set forward, we know where the markets going, we know where our students are going, what we've got at the moment isn't going to meet that future need. And we, as a collective organization need to step up and change our practices. Yeah, that makes a lot of sense. And so just kind of thinking back at the kind of evaluation process and looking at different options. How was the decision made to go with the Lucien Payment Center by TouchNet? Well, we do run a Lucien Banner as our student information management system. And so obviously, a system that was not just compatible with but integrated well with that, was obviously a must do. We really had to make sure that as a government entity that the government was happy with our requirements, that whatever solution we had was a secure solution that obviously worked well with the Australian payment environment. We had to make sure that whatever we implemented was simple and straightforward and easy, not just for students, but also for staff, as well. Often I find with system procurement, that that staff part tends to get overlooked. So you can have a good front end for a customer experience. But if your back end requires two dozen staff running around patching things up, it's not such a good implementation for that organization. Yeah, that makes a lot of sense. And I feel like we've sort of seen through the years things ebb and flow where there's a focus just on making it easier for the staff, and then the students suffer, or we get so easy on the students that the staff suffers. So you're absolutely right, kind of getting that balance was probably really key, right? That's right. Yes. And so when we were evaluating providers, we were looking at all stages of that process. How easy was it was for students? How easy was it for staff? When things inevitably go wrong, and students paid the wrong amount? How easy was it to fix that up? How easy was it to issue refunds to students? How well did the products and the gateways interact with the Australian banking environment? And what experience that vendors had with particularly with our system in particular, and what the international experience was as well? Yeah, that’s a good point, it is one thing if it’s easy to make it all work. It’s when there's a hiccup or problem that is the defining factor, if you can fix it, right? That's exactly right. Things can and do go wrong. And as no matter what information you give people, somebody somewhere is going to do the wrong thing, not necessarily through any fault of their own. And so a key part that we find, again, this often overlooked when customer facing systems is when something inevitably does go wrong, how easy and how quick, is that for staff to rectify that issue? Absolutely. So kind of thinking through the flow. So you know, went through the, you know, acquiring the technology, but then also thinking about implementation. Did you have some kind of early wins, or what did you see immediately, that was really a success when you implemented? There was really, it was almost a game changer right from the start. I have to say, again, the very manual processes that we had before were very cumbersome, very error prone, a lot of stuff. But then as soon as we started with TouchNet, right, from the early days, we saw improvements and benefits straightaway. We've certainly been able to track payments much more readily than we could under the old manual system, reconciliations went from being a day's long process to really almost a non-issue. The ability to issue cancellations and refunds right from the get go was a major win for us. Prior to that, part of our system setup, we had to use government banking system rather than our own banking system to do government requirements, it wasn't necessarily our choice. But we had to do that. The trouble is that a student could certainly make a payment into our accounts quite easily. But if a student then needed to be refunded, we had to actually go through a government refund system. I've worked with government financial systems, I don't think many of them around the world are set up for easy refund. That took between four to six weeks on average for a student to actually get their money in their bank account, from the time that we write, we need to issue a refund. Now, that's not exactly great customer service. It's obviously ticks a lot of boxes in government paperwork. But in terms of our specific use case, where we're not really a government interaction here, it's not a government transaction. That was a major headache for us and a headache for the students, obviously. So being able to issue refunds through the TouchNet system immediately without going through that process. That was probably one of the biggest initial wins for us. Oh, wow. Yeah, I can't imagine four to six weeks waiting from a student perspective, but also can't imagine the process that you had to go through the government system. It was amazingly cumbersome, because the government assumes that every time they're paying somebody money, they're obviously a contractor or a supplier to government. So we had to have students go on to a government website and register themselves as suppliers, putting their bank account details, their taxation status, and so forth, just to receive potentially a $40 refund. Oh, my goodness, it's hard for students sometimes to put that in to get money immediately, let alone wait four to six weeks. That's right. That's right. So the TouchNet system, bypassing all that, that was probably one of the biggest wins we realized straightaway. That's amazing, and you know, we can't think about the last couple years without talking about COVID and sending us all into lockdown, especially you guys in Australia. So how did that really impact your implementation and payment system? And is there anything that you learned during that time that you're like, this is what we're going to do post pandemic go forward? I think implementation of TouchNet was very fortuitously timed as is around the start of the pandemic that we implemented TouchNet. And I really don't know how we would have coped without it during that. It's and you know, that's an illustration we've been talking for many years prior. This is the strategic direction, and as an organization we want to move into this. It’s where the markets moving, this is where our students are, everyone's talking about moving online, and doing online delivery and seamless, you know non face to face, student management practices. But there's been a lot of talk and very little action. When COVID came along, and particularly in Australia here where we did have some initial some very strong, very harsh lockdowns. That was a real wake up call for everyone. Everything that we've been talking about for years, we now suddenly had to put into practice. And it's amazing when you finally got that push how much all the reasons to not do it just melt away. And within about three months, we went from zero to 100, in this space, and it became the norm quite quickly. We had an existential threat here. And that really put things into perspective, being able to switch almost our entire delivery to online learning in such a short period of time, but I don't think it would have been possible without that push that COVID gave us. And, again, with payments in enrollment processes. Again, when we were students weren't able to physically attend the campus due to a lockdown. We didn't have a choice, we had to have an online payment system that worked and an online enrollment system that worked for students, where they didn't have to have somebody physically guiding them through the process or physically taking them through the process. Again, something we've talked about for years, but that finally drove us to actually make implemented and make sure that it was working fine and TouchNet was around at just the right time for us for that. That's great. Yeah, it makes a big difference when you go from ‘it'd be nice to have’ to ‘we have to have.’ That's right. And that's, you know, if COVID wasn't there, and we'd let the clock run we would probably will have reached that point in five or six years anyway, but in five or six years, not a year or two ago. COVID itself obviously wasn't a good thing, and we would have been better off without it. But you know, good things do come out of that experience. It really did force us to take that future state that we've been talking about. And people did realize the benefits everything from flexible work arrangements through to flexible study arrangements, businesses in general moving to more of an online model and online transactions and ordering model. And that's really where we found ourselves in that space too. When the restriction is lifted, there's a big temptation to immediately snap back to where we were before COVID. We don't have to worry about go back to where we were before. But the world has changed. Everyone's now, you know, people who never did online grocery ordering before now are doing it routinely, it's their preferred method, for example. The world has changed. And we really need to make sure that we stay changed with the world and not revert back to a world that just doesn't exist anymore. Exactly. I'm so thankful I don't have to go to a grocery store anymore. So how about now so you're back into, let's say, the word normalcy? What's it look like now on campus? It's, well, essentially normal. Yes, we did have some challenges during the lockdown periods, because not all of our training can be offered (not) face to face, of course, but usually, we were doing hands on practical training. For example, for electricians, we can certainly train them in the theory online. But when it comes to actually soldiering components and doing what physical wiring, we do have to assess that in person. So that was always a challenge for us during the lockdowns and being able to negotiate restriction, or small restrictions of government was a key part of that process. But now that were returned, we don't have the restrictions anymore, we can do things. Still aware that there's still COVID out there, and we’re not entirely out of the woods now, but doing things sensibly and practically. It’s sort of, suddenly a lot easier now that we can bring people back onto campus on mass, that we can do that face to face training where it's appropriate. We're really still not letting go of those gains that we did make during the COVID period, though, we still have the same number of staff on campus, we haven't reduced the staffing at all, but we are doing different jobs, different roles, different staff. Staff that were previously helping students through the enrollment payment process, for example, now do more consider students services to students, which is more evaluating processes. We really had the entire process shaken up with the enrollment process moving to a fully online payment model moving to a fully online enrollment model, and we're still keeping those wins going forward. So it certainly if you're looking around a campus, I see a lot of students around now a lot more than there were a year or two ago. But as the student experience goes, I think certainly the administrative part of that experience is a lot cleaner now than it was before COVID. Absolutely. And it sounds like to like a lot of schools, we hear kind of transitioning that staff member from being I'll say, kind of more of the cashier, or I'm just taking your payments to really being more of that customer service advisor in the event that they need help, because so much can now happen automatically and online. That's right. And one of the things we have noticed post COVID is that people are looking for more flexible arrangements, they are frequently studying as well as working or they're sometimes studying two things at once, they want a little more flexibility. We very rarely had that standard full time student model here in the TAFE sector, a lot of our students are already employed, and they're looking to change their professional upskill and their existing role. And we've always had a large part of our organization, working with those students. But we've seen that a bit more coming through people are more interested in flexible options, what their optionality is, it's less about ‘how do I pay for my enrollments’ and more about ‘what my enrollment options are?’ So being able to reposition our staff to provide that service, they want it now that works very well. And we've been able to do that, because we've freed up a lot of their time and effort by simplifying our payment system amongst others. Absolutely. Do you see a shift of really how the students are paying in terms of when they're making that payment? Are you are you changing some processes around that? Yes, I mean, prior to TouchNet, we really had an option… well, I wouldn't really say an option that was the default, really. Students didn't have to actually pay on their enrollment, we would issue them an invoice and with a due date, that was generally several weeks in the future, often after they started studying. We would then have to chase them up for payment. If they hadn't paid we would eventually have to cancel enrollment, which is a very manual process. We carried out a fair bit of credit risk on that with those operations there. So with TouchNet, we've really been able to cut that down significantly because we had to previously, have delays in the system for payments to come through when students would pay through the government shopfronts, it would generally take between two and three days for that payment to actually hit our books. So we wouldn’t actually know what's hopefully paid or not. Now we can see in real time who's actually paying we give them that prompt and that referral to the payment gateway right at the point of enrollment. We find the vast majority of students take us up on that. Not all. But we do find that it’s a lot easier when we aren’t chasing up those payments that are outstanding now, we can reduce our times that we've got to call people to pay, you can use our grace periods. And when we contacting people for payments, we can really direct into the payment gateway right at that point in time. So we've certainly seen a dramatic increase in the number of students who have paid their fees on time under the TouchNet payment system. That's great. I think just like you were saying earlier too when it's integrated, and just kind of part of that flow, it's sort of top of mind, and they just think, ‘Oh, this is just part of the process, I enroll and I pay.’ That's right. And that's where we're moving to, we're not quite there yet, because we have come from this historical practice of essentially studying on credit and hoping that students would eventually pay us with limited recourse if they didn't, we're really moving towards that pay upfront model. And so certainly in the next few years, that's where we certainly hope to be landed, that your enrollment isn't completed until there's one way or another, you've sorted out your fees. Okay, that makes a lot of sense. Yeah. And you know, it's really interesting, I find that students have a bigger concern for cybersecurity. So just kind of want to see what your opinion is on that. And how do you see that and students at CIT. That's a very big concern for us as well. And cyber security is one of our biggest, most in demand programs at the moment. Certainly something that we don't just teach, we do practice here at CIT as well. And, you know, it's a big concern for any organization, when, especially when you're handling sensitive personal information, and then any educational institution certainly handles a lot of that. So we're quite used to that. But we don't want to expose ourselves as an organization or expose our students any more than we absolutely need to in that space. And, realistically speaking, we don't want to handle payment information, we don't want to handle people's credit card information ourselves, there's no value for us in hanging on to that or processing it ourselves. So what we'd rather do is pass that on to a third party, in this case, TouchNet. And who's much, much more experienced with the security and compliance around that space. So when we're talking about PCI DSS, for example, we at CIT don't want to have to do that, right? We don't necessarily have the expertise in that particular area, we don't have the expertise of managing that payment data. But TouchNet does. So by using an external provider who's a specialist in that space, where we can pass in from all the students, we don't even see that information, the student deals directly with him through the payment gateway, that cuts us out of the loop. And that removes a big potential cybersecurity hole there in that process. So by doing this, we can make sure that we've got the best and most secure experience for students. Yeah, that makes a lot of sense. And you're right with PCI compliance. I mean, certainly always the school you are responsible for it, but probably easier to say, ‘Yes, I'm compliant, because I'm using TouchNet in this way.’ Oh, that's right. I mean, we actually had an audit just in the past few months on this where the government was looking at all the government agencies and all the government owned organizations. What was your PCI DSS compliance? And how were you in that? And then obviously, anyone who's ever been through that process, it is quite an onerous process. If you ever have to demonstrate their compliance, but for us, it was really easy. We could demonstrate that we don't actually collect this data ourselves. We use TouchNet, we use the online payment gateway partner, and here's their PCI compliance paperwork. And that was it. That was all good. That's so much easier than having to go through that process directly yourself. Absolutely. Yes. I've seen those questionnaires and the questions that have sub questions and sub questions of sub questions. That's right. Yes. So anything to save us from that paperwork is good for us. Absolutely. Well, gosh, you've really implemented a lot and you know, made a lot of really good moves in terms of technology that you've invested in and the process that you've changed. So if there are other institutions really looking to modernize their payment systems, do you have any advice for them? I think, really, it's about forgetting what you've done in the past and forgetting what you're doing now. And really looking at that future state, really concentrating on what the lived experience is in the marketplace. We know now that people everywhere are used to online payments and online interactions. And really, I say, look to that model. Look to your Amazon shopping cart, for example. That's the model that students want. It's going to be quick and easy and straightforward and not intrusive at all. It needs to be seamless and painless. And they can do it anytime, anywhere from the comfort of their home and not being forced to go through a specific process just because that's always the way that people have done it. So that would probably be my biggest piece of advice. Look to your future state and see what's out there and look to what people are used to, because there are certainly solutions out there that can do that for you. I think that's great advice, Karl. Thank you so much for spending this time with me, I know everybody else as well as us love hearing about all the successes that you're having at CIT and with your digital transformation efforts. Thank you very much. Thanks for tuning in to this episode of Focus. Don't forget to subscribe so you can stay up to date on the business of higher education. For more information, check us out at touchnet.com.