How Credit Unions Can Differentiate With a Digital-First Strategy

Technology continues to serve as a catalyst for change in the financial industry. From open banking and fintechs, to contactless, mobile payments and round-the-clock self-service, there’s significant movement and momentum in the space. The primary driving force behind it all? Keeping up with evolving consumer expectations and behaviors.

Members today are increasingly connected. They expect seamless, intuitive interactions across digital and physical touchpoints. Member preferences continue to evolve, and the infrastructure for most credit unions has not kept pace. Member experiences continue to be delivered through separate silos of technology, systems and processes across branches, call centers, kiosks, ATMs, online and mobile. The end result is a set of fragmented and unsatisfying experiences for members, and inefficiencies and an inability to quickly respond to the needs of the business for the credit union.

Take the simple task of a member checking their balance. This function is required in every channel, but the technology, business rules and member experience are created individually for each individual channel that offers this capability. The member can even get different answers for the same task – checking their balance – depending on the channel used. And when changes are made to a task – be it sales, onboarding, account services or transactions – the member experience and underlying code need to be changed for each channel. Talk about time-consuming, expensive, error-prone and detrimental to the experience.

The industry has reached an inflection point. With members now demanding exceptional experiences, including easy, uninterrupted transitions between physical and digital channels, credit unions can no longer afford to maintain these siloes. It’s time to de-channel the traditional model and unify what have traditionally been fragmented experiences, moving away from the outdated, disparate systems that hold them back. It’s time to fully embrace digital-first banking.

And to be clear, digital-first banking doesn’t simply mean investing in digital banking technology, but instead, it’s a shift in mindset that places digital at the center of the member touchpoints to deliver consistency, connectivity and agility across all channels. This strategy is about creating dynamic experiences that seamlessly bridge the credit union’s digital and physical assets. Regardless of where a process begins, with digital-first banking, members can continue the transaction or activity wherever they’d like, including the branch and ATM, making what were once channel-specific interactions ubiquitous across all touchpoints.

This is made possible thanks to the emergence of modern front-end technology coupled with improved middle- and back-office tools, namely the cloud, APIs and microservices. Moving to the cloud affords the agility necessary to quickly adapt to changing business models, preferences and member needs. And by leveraging advanced APIs, credit unions can add new technologies with greater speed and ease. Let’s say a new way to pay, like digital wallets, disrupts the status quo. With APIs, all a credit union would have to do to enable this option is connect to a leading, trusted provider via APIs – no need to spend time or money investing in or developing new software. This type of architecture encourages an open approach, allowing credit unions to bring forward partners of choice to engage with members in ways that are new, innovative and that resonate.

With micro and shared services, a single development team can create a more modern, consistent user experience that flows across mobile, online, branch and ATM using the same technologies and standards. This is especially beneficial for credit unions, which often lack the expansive resources and expertise in-house to keep up with mounting software demands. The result is technology that is less expensive to run, easier to maintain and allows new services to be quickly integrated and brought to market.

Strategic credit unions are leveraging these technologies to unify channels and improve their interoperability to deliver stronger member service. For instance, in the past, member preferences for a specific channel, such as ATM and digital channels – had to be set up individually. But with open APIs and microservices, members are empowered to designate their ATM screen preferences via their digital banking mobile app. This choice can be applied to other institutions’ cards as well, empowering a credit union to provide an even stronger, personalized experience for members with other primary institutions.

While investing in technology to solve for technology disruptions may seem counterintuitive, it’s actually the opposite. A digital-first approach creates new efficiencies, freeing branch staff and team members to focus on other business priorities—like expanding member relationships and growing portfolios. It provides consistent experiences across every integrated channel. What’s more, it enables the ease and agility necessary to keep pace with – and even get in front of – member demands for new ways to pay, transact and interact with their credit unions. Those that act quickly and embrace this philosophy are well poised to grow loyalty, relevance and market share.

Terry Duffy is SVP and general manager of digital first software and services for the Atlanta-based NCR Corporation.