The End of a Transformative Decade & Look Ahead: Part 4

In this special online-only series, CU Times interviewed fintech and credit union professionals to discuss the changes seen in the fintech world during the past decade, as well asking them to take a look ahead into the next ten years.

Doug Brown, SVP/general manager, Digital Banking, NCR

“As smartphones have reached mass adoption and companies such as Amazon, Uber and Netflix emerged to drive a digital centric experience, consumer expectations have reached unprecedented levels of ease and convenience – including from their credit unions.” Consequently, members want better digital capabilities and are willing to switch their financial relationship to another credit union, bank or fintech if their current experience fails to meet expectations.

“Consumers will expect more as new competitive pressures focus on the increasingly critical battle for deposits. Credit unions are contending with more new entrants attempting to disrupt the financial services space, such as challenger banks, fintechs, major tech companies and retailers. New, digital experiences such as Apple Card and Uber Money are already redefining expectations for what banking should look and feel like.

The good news is credit unions have trust equity these new alternative providers lack. The new battleground for customers is the quality of the member experience. Credit unions need to leverage technology to break apart siloed channels, enabling a complete digital experience transformation. This will allow credit unions to quickly introduce new features and innovations to create a complete, consistent experience no matter where or when a member chooses to do their banking.

Steve Gilde, director, global product marketing, Paragon Application Systems

“Looking back on the past decade, it is difficult to address all the change that has taken place across the financial services industry.” The problem is that in 10 short years, nearly everything has changed:

• The use of mobile phones and social media primarily drive consumer behavior and communication, as well as purchasing decisions.
• Data security, data privacy and data breaches are front-page issues.
• Payment methods have expanded well beyond cards and cash.
• Financial services companies have moved significant portions of their businesses into the “Cloud,” changing the way that they evaluate, acquire and consume IT products and services.
• Technology companies use Agile and DevOps principals to design, develop and deliver their products and services to the marketplace at warp speed.
• Society, technology, business, politics and entertainment are now inextricably intertwined.

Consumers now have virtually unlimited access to financial services and resources from anywhere on the planet. Small businesses leverage technology and tools that were once only available to the largest and most sophisticated financial institutions and processors.

No one can predict what the next decade holds for faster payments, AI, IoT and blockchain. The capability to rapidly respond to change has emerged as a key competitive differentiator and is an absolute requirement for any organization that wants to survive the next 10 years.

Mickey Goldwasser, vice president, Payrailz

In 2020, the credit union industry will experience a shift in which artificial intelligence and machine learning will no longer merely be a buzzword or a trend to watch, but will become more mainstream within banking operations. As more consumers and financial industry professionals become aware of the benefits of utilizing AI and machine learning to provide a more tailored experience, credit unions will prioritize this technology in order to shape the way they interact with their members to ensure that they are utilizing member data most effectively.

In the past decade, we have seen consumers adopting a “do it for me” mindset in which they have come to rely on technology to simplify their lives. Endless services and tools like Uber, Seamless, Amazon Echo, Nest thermostats and more have transformed our culture, making us reliant on the type of technology that automates mundane elements of our lives.

Within the context of finance, credit unions have begun to realize the importance of creating similar experiences, particularly cultivating a personal banker relationship with their members through technology. Credit unions can focus on helping members achieve financial wellness, by proactively offering them services that help monitor their goals and behaviors, like apps and devices that help monitor personal fitness goals.

Over the last ten years, the industry has shifted dramatically with the role of branches transforming and major M&A activity among financial institutions. As an industry, we have learned that while the technology of yesterday is stable, it is unlikely to take credit unions far into the new decade. Forward-thinking credit unions are looking for ways to lead and shape the industry instead of following in the shadow of the largest banks.

Kathleen Craig, founder/CEO, Plinqit

Ten years is a lifetime in the world of technology. During the past decade, we have seen smartphone ownership grow to 81% for adults in the U.S. (according to the Pew Research Center) and 70% for the US population as a whole (per the Internet Innovation Alliance). This has contributed to the expectation of mobile-first and mobile-friendly in everything we do. As a result, we are seeing more and more financial services accessed from smartphones. “As an important cohort of the financial services industry, credit unions still have not found a way to digitally translate the human touch of their valued, personal member experience. This challenge makes credit unions vulnerable to disruption from direct-to-consumer fintech companies.”

In the future, we will continue to see the importance of a digital experience versus a digital transaction. “Credit unions’ focus will be less on what products are offered and more on how those products can be used to help members meet their financial goals. This will happen through more personalization in messaging and better, value-based marketing.” To truly connect with members and potential members, credit unions must find a way to be more helpful and compassionate in their marketing messages.

As ‘open API’s’ and ‘open banking’ platforms continue to evolve, credit unions have an opportunity to become the financial services resource that allows members to engage in personalized “conversations” through automated channels of their choosing – at any time.”