2022 Predictions: CUs to Prioritize Member Service & Tech Strategies

Credit unions have unquestionably been affected by the impacts of the pandemic over the past two years, but through this turmoil, they’ve demonstrated their unwavering dependability. Across the nation, institutions have gone above and beyond to support their members during these trying times. This year, credit unions will continue to adapt to members’ shifting needs and preferences and keep pivoting accordingly. There are several key areas institutions should keep a close pulse on for the year ahead.

Outsourcing will keep gaining momentum. Attracting and retaining top tech talent remains a challenge, especially in rural areas, which has led to many credit unions outsourcing their core platform and critical IT infrastructure. Such an approach can free employees from the burden of managing the hardware and software in house.

If done correctly, outsourcing can enable credit unions to increase efficiencies, streamline processes and enhance the member experience. However, it’s critical to ensure that the outsourcing provider is a true partner and that their technology and product portfolio strategy, vision and goals align with the credit union’s. Strong disaster recovery capabilities, the ability to integrate and a healthy appetite for innovation should also be prioritized when considering potential partners.

Outsourcing will only continue to gain traction and create value as The Great Retirement continues, leading to changes in credit unions’ leadership. Nearly half of Americans in a New York Fed survey said they expected to retire before turning 62. As Americans retire earlier than ever before, credit unions must make important decisions about their future. When longtime leaders leave smaller credit unions, it often leads to them having to shut their doors or be acquired. For these institutions, it will become even more critical to rely on strategic partners, as they can support them during these changes and help them maintain operations during times of transition.

Personalization remains a key differentiator of the digital experience. Credit unions have a wealth of member data at their fingertips, but many don’t know where to begin when it comes to organizing, analyzing and leveraging it. The credit unions that can effectively and strategically use this data to offer targeted guidance and tools will be the ones to strengthen their competitive stance. Members want their credit unions to truly know them, so providing engaging, personalized experiences will be a priority this year.

Credit unions must create a cryptocurrency strategy. According to a Bakkt Holdings study, nearly half (48%) of U.S. consumers reported investing money in cryptocurrency during the first half of 2021. Consumers’ interest in cryptocurrency is skyrocketing, and credit unions can’t ignore this trend. They must carefully create a cryptocurrency strategy, or risk losing members to other providers, even nontraditional players. This year, more credit unions will look to tech partners to help them make educated, strategic decisions around their cryptocurrency offerings.

The M&A landscape will remain active. According to S&P Global, credit union merger activity has increased with the NCUA approving 74 mergers in the first half of 2021, compared to 67 consolidations in the first half of 2020, and this momentum is only expected to continue. M&A presents a solid way for credit unions to more successfully scale and better compete, but it can also present many challenges.

For the transition to be more seamless for all parties, credit unions must conduct proper due diligence, invest proper time for preparation, encourage buy in and participation from credit unions to effectively fuse cultures, and prioritize member education and support before, during and after the merger is complete.

This year, it will be more important than ever for credit unions to regularly evaluate their member service and tech strategies and make necessary adjustments when needed. The credit unions that form strategic partnerships with tech providers, place an emphasis on forming more meaningful, personalized relationships with members and consider different avenues to strategically expand their offerings will be well poised to succeed.

Gary Lee is the chief client officer of Member Driven Technologies, a core processing and IT CUSO based in Farmington Hills, Mich.