By now, the future direction of financial services has been charted and well documented — it's all about digital transformation. While the direction of the industry is no surprise, the speed at which this runaway freight train is traveling has left many industry insiders concerned, to say the least. According to a 2019 survey, 81% of banking CEOs reported they were concerned about the speed of technological change. And this was before the COVID-19 pandemic exposed universal shortcomings.
Amid big banks, community banks, and emerging FinTechs, it's imperative for credit unions to provide best-in-class, frictionless experiences to members. But the manifestation of these experiences may be juxtapositioned with the traditional credit union structure. In a financial environment where 59% of banking executives feel the branch-based, traditional banking model will be obsolete by 2025, credit unions risk losing relationships, relevance, and revenue if they fail to modernize technology and elevate their digital member experience. Let's take a closer look at key steps credit unions can take to ensure they are up to the task.
Credit Unions Must Start Building the Infrastructure of Tomorrow Today
Credit unions must start making plans to invest in technological updates. And in some cases, the credit union should consider a holistic infrastructural rebuild. To decide which path is best, you must carefully analyze the existing digital experience and compare how it stands up to member expectations. However, this process should be deduced to listing services and products that are available digitally.
Instead, this process should highlight everything a member experiences as they interact with your credit union online. More so, you should pay special attention to and notate all of the spots where confusion or friction exists. Once the legwork has been done, credit unions can start to build and create the digital architecture that supports data consolidation and future innovation.
Specifically, credit unions can create partnerships that do not require added work for credit union staff. When the right architecture and foundation are in place, your credit union will be able to embrace emerging technologies in a more cost-efficient manner, such as:
- Predictive modeling
- Robotic process automation
- Self-service channels
- And more
At the same time, it can enable your credit union to create banking experiences that meet the needs, preferences, and circumstances of your members.
It's Your People That Set Your Credit Union Apart
For credit unions to undergo the digital revolution required for modernization, there must be a shift toward innovation as a core competency. Fortunately, these teams don't have to invent new technologies or reinvent the wheel. Instead, these teams should be focused on the future viability of the credit union. With their own budget and specific goals, these dedicated teams can help:
- Drive the implementation of innovation
- Proactively identify needs
- Continuously scan the future
- Invest in future partnerships
If You Can't Beat Them...Partner!
According to a PwC survey, 73% of financial sector executives believe consumer banking is likely to be disrupted by FinTech firms. With an unwavering focus on the member experience, credit unions will need to adopt a more agile and flexible approach to partnering with the right core processor technology. Simply put, if you can't beat them, credit unions must partner. Doing so can help fill gaps while meeting member needs and expectations in a more cost-efficient manner.
The alternative is to focus on developing new technologies in-house, which can be an extremely costly and time-consuming endeavor. However, most credit unions are not designed to be or desire to be technological firms. Instead, opting to efficiently partner with advanced core technology can increase speed to market in a much more cost-efficient manner. Simply put, partnering with the right core can open the door for credit unions to offer many of the latest and most advanced features to help advance the organization's strategic vision.
Empower Your Credit Union to Thrive in Technological Change
In today's extremely competitive environment, advancing digital transformation isn't just a nice-to-have strategy — it's essential. Now, more than ever, your members need, expect, and demand digital solutions that will simplify and streamline their lives. These digital solutions can take on an endless array of shapes and forms. No matter the shape, it's imperative your credit union has the infrastructure to not only survive technological change — but thrive.