Banking on the Future of Fintech
As CUs look to the future, they must ask what their members can’t do digitally today and what they can make possible tomorrow.
The way people access their money and manage their finances has been evolving since humans began using currency. Not that long ago, debit cards were innovative. It could be said that “fintech” began decades ago with the invention of Automatic Teller Machines, or ATMs, which marked the first time consumers could access their money 24 hours a day, seven days a week. Dial-up and website-based banking soon followed, delivering more value and convenience to consumers. The focus has now shifted to harnessing the power of digital. This is in part a response to companies outside the financial sector, such as Google, Uber, Amazon and Apple, wading into the market and bringing with them new innovations that are disrupting the delivery of services and changing consumer expectations.
At a time when people are attached to their cell phones – more than 77% of Americans use smartphones and 57% of all online traffic in the U.S. comes from smartphones and tablets, according to Forbes – consumers are accustomed to immediate access to their most important activities. Whether people are monitoring email, paying bills, shopping or connecting with friends and family, they expect instant results from their online interactions. This immediacy carries over to finances. More people are using mobile devices than desktops to track their finances. A recent study from Asurion showed Americans check their phones on average once every 12 minutes. That’s more than 80 times a day. If the ultimate goal is to improve convenience and increase personalization in financial services, credit unions must focus on mobile.
Adopting new technology is important to credit unions, and at the heart of the credit union difference is its attention to saving members money and protecting their financial futures. Credit union members are multi-generational and many have concerns about the security of the latest tech innovations. Golden 1 Credit Union believes in evolving our technology to best leverage the experiences and successes of banks or other companies offering banking services. As they test technology adoptions, we can learn from their experiences to reduce risk. This approach helps Golden 1 ensure our members have access to technology that provides convenience, value and security.
Golden 1 is constantly evaluating how to best use digital technologies to execute on our mission of helping members improve their financial futures. Based on the unique needs of our members, we are focused on building a seamless experience – regardless of where and how they bank. Whether our members call us, visit one of our 72 branches, use their desktop or open our app, we want them to have an experience that’s similar and optimized for that particular channel. They can then choose the channel that’s most convenient for them.
Digital banking offers conveniences other means of communication cannot. Last year we launched a card control app, giving members the ability to set transaction controls on their credit or debit cards, and allowing them to restrict transactions such as online or international purchases, set a specific spending limit and more. Golden 1 has also enabled out-of-band authentication. This extra two-step process verifies a user’s identity if they are logging in from an unfamiliar device and requires an additional authentication method in addition to the typical password, such as typing in a code sent via text message. Another digital method for protecting our members’ identities is through a two-way fraud alert system for debit cards, which gives cardholders the convenience of receiving and responding to text fraud alerts at the time of the transaction.
Open banking allows third-party developers to build applications and services for a financial institution. Through open banking, a fintech company could provide updated digital banking services and multiple credit unions could offer them to their members.
Golden 1’s drive to increase awareness and adoption of digital banking is paying off. Not only have we increased overall membership to more than one million, our members are more rapidly signing up for mobile and online banking. Since 2016, the pace of adoption has gone from single-digit yearly percentage increases to double digits.
The digital future of our industry will continue to evolve, and we know it will be exciting and continue to transform our industry. Our approach to technology is based on our commitment to providing exceptional service with reliability and security. Golden 1 will continue to invest in well-tested, safe technologies that enable our members to interact with their accounts and with us anytime, anywhere.
Marlen Foster is Vice President of Digital Channel Delivery for Golden 1 CU. He can be reached at 916-732-2900 or mfoster@golden1.com.