Controlling Data at the 'Core' of Your Credit Union's Strategy

Are you ready to design your credit union’s long-term strategy to control data, marshal growth and maximize efficiencies?

Data has always been an important asset, but today, it’s indispensable. Understanding new consumer attitudes and behavior, and controlling the use of that data – the psychographic insights currently spread across your many systems and platforms – is the key to anchoring your operation as the nexus of community commerce. Your institution, and the communities you serve, will thrive if controlling data is the core of your strategy.

The chief data scientist for a Silicon Valley app developer once told Shoshana Zuboff, a Harvard Business School and Harvard Law School professor, and author of the book “The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power”: “The goal of everything we do is to change people’s actual behavior at scale. When people use our app, we can capture their behaviors, identify good and bad behaviors, and develop ways to reward the good and punish the bad. We can test how actionable our cues are for them and how profitable for us.”

Silicon Valley big tech corporations have outright confessed to the use of data to control consumers, and knowing their prevalent user base, that data is being used to reach the communities you serve. Nascent industries including meal and grocery delivery, all forms of retail shopping and even the physical act of transportation have traded in their old, physical-first, retail world for a chic, digital dimension. Banks and credit unions are not immune to the evolving consumer expectations that these experiences create.

In a world of virtual community and, decisively, digital commerce, will your credit union remain relevant, capable of refueling democratic, equitable and local community commerce? Modern financial institutions have the potential to be the epicenter of countless digital interactions in their communities. The recent results of a Bank of America survey revealed that of 1,000 customers (digital asset owners and prospective digital asset users), 91% of those surveyed stated they intend to buy cryptocurrency in the next six months. This is just one example of how the banking world has been ablaze with news of those interested in the future of faster, more secure, more valuable money and payments – systems that are leaving the electronic dollar on life support.

Why is this statistic so significant? If your institution surveyed your membership right now, would you be able to get a 91% “yes” for intent to use channels like online, mobile and bill pay? Trust, like many aspects of the internet, is being decentralized. The declining trust in institutions – governmental and financial, including large, national banks – is an important data point that can reinvigorate your strategic roadmap, operational priorities and ultimately, the way your operation digitally integrates your members, community organizations and local businesses. In the wake of the 2008 financial crisis, faster, more affordable, secure and transparent tools for storing and moving assets and wealth became available. Bitcoin is a successful, 13-year-long proof of concept demonstrating that money, value and assets can be stored, moved and used globally without reliance on institutions.

Is your credit union seeing these trends in payments and deposits leaving your institution in favor of distributed digital asset networks? Do you have a strategy, an operational design and technology to protect a flank – an exposure of potentially 91%!?

Today’s financial climate is clear; consumers will highly value their trusted, local financial institution in these digital markets. Given current events like instability of large exchanges and spikes in new crypto users and wallets with active balances, there’s an immediate (revenue generating!) opportunity for credit unions to focus on vaulting members’ digital assets, if they take the simple steps of preparing operations to safeguard these digital assets as a trusted, local, democratically structured, decentralized institutional partner.

While our industry remains tethered to legacy operational systems and thinking, data tells us that your consumers are downloading these digital wallets and financial services apps that don’t require minimum balances, high balance loans, long-term membership or “wallet share” in exchange for loyalty or reward. Instead, they welcome your consumers to the “future of money” by enabling them to buy and sell digital currency, give your members their paychecks two days early, offer micro loans at a low cost, customize credit card rewards, extend Buy Now, Pay Later services at local merchants and help the members of your community build good credit. As these new networks of monetary exchange and value storage gain popularity and viral track records, traditional dollar-directed institutions are likely to find themselves grappling for relevance as the trust problem and the data problem converge.

Are you ready to compete effectively in the metamorphosis of money? How can your credit union strategically insulate itself in the era of digital disruption of money? How are you contributing to the fusion of currency and financial services with the internet?

Transform your legacy core processing to modern digital consumer interactions, maximizing the return on investment you’ve made into your core and eliminate the need to barter your valuable data for third-party solutions. With a modern strategy, operations transformed for the digital age and simple tools to embrace the digital world, scores of new opportunities will emerge. Cryptocurrencies, DeFi, distributed ledgers and localized money-data innovations will catalyze your local economies, and relevance is its own reward. These new, market-facing capabilities will pay dividends internally too, reducing costs, increasing efficiency, providing new asset classes and reinventing merchant/bank relationships – while also insulating against risks to global and local economic stability inherent in the struggling, centralized forms of money.

Are you ready to design your credit union’s long-term strategy to control data, marshal growth and maximize efficiencies? We know the answer is an emphatic: Yes! And that is how we define relevance.

Jessica Fongemie

Jessica Fongemie Director of Communications DaLand CUSO Rocky Hill, Conn.