How Credit Unions Can Accelerate Digital Transformation

Credit unions are struggling with the reality that digital transformation is easier said than done. Modernizing legacy infrastructure, which most of the financial industry still relies on, is no small undertaking, and many initiatives are in their infancy. With technology spending in the financial sector expected to achieve double-digit growth in 2022, according to Forrester research, credit unions need a roadmap to maximize the investment.

Digital Transformation Through the Customer Experience Lens

Before credit unions begin devising the next phase of their digital strategy, it’s important to take a step back and consider the end goal of these investments. While there are numerous drivers behind digital transformation initiatives, arguably one of the most essential is creating a compelling member experience that continues to delight even as new technologies are introduced. Increasingly, facilitating this high-quality experience comes down to ensuring members can move seamlessly between different touchpoints during a single transaction.

If you harbor any doubts about customer-driven digital transformation, consider the following statistics from The Economist:

• 65% of bankers believe the traditional branch-based model will be obsolete by 2025;
• The same percentage also view technologies as the greatest driver of change within the next three years; and
• 81% believe that financial institutions will differentiate on the customer experience, rather than products, in the years ahead.

The Technology Element

Before credit unions can compete on customer experience, they have some heavy lifting to do on the technology front. All of the processes, technologies, data, partnerships and integrations involved in a typical member interaction must be unified on the back-end, and credit unions also must overcome the complexities associated with legacy systems. Add to this the challenges produced by emerging regulatory requirements and it’s clear to see why digital transformation in the industry is often easier said than done.

So, how can credit unions do this cost-effectively while continuing to balance other technology investments and business priorities?

4 Considerations for the Digital Transformation Roadmap

Every organization has its own unique needs and priorities and is also at varying stages of digital maturity. That said, there are four key pillars that can accelerate success and lay the framework for ongoing digital transformation:

1. Clarity

Approaching digital transformation with clarity in mind ensures credit unions don’t try to boil the ocean and take on too much, too soon. Strategies should provide clarity on the project timeline, what technologies will be modernized to support the transformation, which processes will be optimized and how, as well as insight into the new technologies that will be implemented. And, perhaps most critically, the digital transformation roadmap must provide clarity on how these elements will work together to usher in the next phase of innovation.

2. Agility

When viewing digital transformation through the customer experience lens, it’s clear that the ability to respond quickly to market changes is paramount. Migrating systems to the cloud can help credit unions become more agile and deliver more rapidly on member expectations. In addition, incorporating cloud capabilities can simplify the deployment and scaling of new technology solutions.

3. Resiliency

Resiliency comes into play when credit unions think about strengthening their existing systems and building new ones for long-term success. Ideally, these technologies should be designed in such a way that prevents them from breaking. When this isn’t possible, however, credit unions must be able to detect the issue in real-time, respond to it quickly and ensure members experience as little friction as possible.

Automation in the form of artificial intelligence and machine learning is one example of how credit unions can bolster resiliency. These technologies can monitor business-critical areas such as website performance, account access and customer service channels and flag them if human input is required to address any issues.

4. Simplicity

Credit unions should keep simplicity in mind as they determine which processes to modernize. If an existing process is inefficient or fails to deliver the desired outcome, there is a good chance it will continue to disappoint even after it’s been infused with new technologies. If we operate under the viewpoint that digital transformation is about creating better customer experiences, then this final pillar is all about finding the best route to doing so while optimizing existing investments and maximizing employee resources.

Separating the Winners From the Also-Rans

As The Economist‘s research underscores, the industry is at a pivotal time when it comes to availing of technology innovations to compete on the customer experience. Within the next few years, we will see an accelerating divergence between the credit unions that successfully embrace digital transformation and the laggards left behind.

Ensuring that digital transformation roadmaps address the considerations outlined above will help credit unions become more member-centric, accelerate the benefits of their technology investments and, ultimately, better compete in our increasingly unpredictable world.

Michael D’Onofrio is CEO of Orbus Software, a global cloud software provider with U.S. headquarters in New York, N.Y.