Credit Unions (CUs) have an opportunity to leverage their unique market position by making strategic, optimized investments in digital technology and strategic partnerships to tackle their competition.
Mobile/ Omni-channel banking can be instrumental in helping CUs maximize member relationships and offerings:
- Expand beyond current region: Mobile is an important part of members’ lives. Over 60% of account holders want their financial institution of choice to provide anytime, anywhere access to their accounts[i]. By offering mobile banking, CUs can straight away break the barriers of being confined to a certain region. Their members who travel and need banking services across the country can continue to use their CU’s offerings and not switch to other banks for these desired services.
- Offer omni-channel banking: Members prefer a seamless banking experience. Based on a PWC survey, 59% of respondents expect the importance of branch banking to diminish significantly as members migrate to digital channels by 2020[ii]. Yet, only 16% of respondents viewed themselves as “very prepared” for this shift. CUs and community banks have the lowest level of readiness for optimized distribution. They can work towards a better distribution model with omni-channel offerings to attract and also retain more members.
- Leverage digital to drive efficiencies: Mobile applications help, not only on the B2C side, but in B2E as well. The majority of FIs believe that there is scope of reducing costs (58%) and improving profitability (59%) by simplifying technology and processes[iii]. CUs can drive greater efficiencies and scale with the help of employee focused applications
Although it may appear as though organizations must choose between continuing a traditional way of functioning and serving their members or bringing about digital transformational changes, an across the board change is not always needed.
As Malcolm Gladwell says in his famous book ‘The Tipping Point:’
“We have, in short, somehow become convinced that we need to tackle the whole problem, all at once. But the truth is that we don’t. We only need to find the stickiness, Tipping Points.”Malcolm Gladwell
You can start small, experiment with what’s working (and find out what is not working), engage with experts in the digital field and gradually build your strategy. The key here is not to create a huge disruption in the system, but to grow incrementally, start by offering simple products or solutions and then grow your digital presence with more complex product offerings. According to a report by N-iX, 67% of companies believe that a partnership with a digitally advanced vendor is a great way to start digital transformation.[i]
A great example of such an initiative is the collaboration between Partners FCU and Temenos. Partners Federal Credit Union is the exclusive credit union that has served the members and the family of The Walt Disney Company (i.e. Disney Parks, Disney Cruises, Pixar, Lucas Entertainment, ABC, etc.) for the past 50 years. Temenos is committed to helping credit unions build the Bank of Tomorrow – Today. With the industry leading digital banking platform and a suite of integrated banking applications, Temenos enables institutions of any size to deliver transformative outcomes – without compromising what’s critical to you. Partners FCU has chosen Temenos as its strategic partner for digital transformation.
Such alliances can enhance the position of CUs as niche and connected banking service providers for members and provide robust competitive advantages resulting in retaining members and growing market share amidst rising competition from FinTechs and large banks.
[i]Leaders spend billions on Digital Transformation. How to keep up?
[i]Source: CGI – Understanding Financial Consumers, 2016
[ii]Source PWC: Retail Banking 2020 Evolution or Revolution?
[iii]Source PWC: Retail Banking 2020 Evolution or Revolution?