3 Trends for Credit Unions to Watch in 2023

A volatile economy, the widespread expectation for all interactions to be hyper-personalized and the evolving role of physical touchpoints have each had significant impact on financial services this year. Credit unions are challenged to keep pace with rapidly evolving technology and an increasingly precarious security landscape all while expanding member relationships, and operating under thinning margins and staffing shortages.

In the face of these challenges and opportunities, there are several key areas executives should watch as we head into 2023. A greater focus on leveraging data to help members with their financial wellness, the transformation of physical touchpoints and evolving payments strategies to better serve small business members will all be top of mind next year.

Harnessing Data to Improve Financial Fitness

Credit unions will make more progress in transforming data into action by leveraging sophisticated AI, with a laser focus on helping members improve financial wellness. Gone are the days when just talking about data collection and analysis is enough; this year, credit unions shift to making data actionable, using the information to boost efficiencies, bridge member experience gaps and positively contribute to the bottom line.

As we look toward a potentially recessionary period and financial anxiety is at a high, members need support with their financial fitness more than ever. After all, credit unions – with their value proposition of exceptional member service and building up communities – are ideal partners to offer guidance during times of economic turbulence. More credit unions will offer AI-driven education via digital touchpoints, such as video-based curriculum models and gamification, to reach a wider range of members.

As part of this focus on financial fitness, credit unions will look to deliver more robust budgeting assistance through automatic budgeting tools, advice around savings goals and paying off debt, and proactively pointing out potentially problematic behaviors (such as engaging in an excessive amount of Buy Now, Pay Later-type services or cryptocurrency investing). Small changes can yield large impacts.

Transforming Physical Touchpoints With Digital Elements

As credit unions continue to optimize their physical footprints, providing remote assistance through Interactive Teller Machines (ITMs) has become a critical way to offer members digital-first, efficient self-service options that also lower the cost to serve. ITMs also provide greater flexibility to employees, including work-from-home options for tellers, which has become especially crucial in the face of the Great Resignation and staffing shortages.

Branch modernization efforts are prompting credit unions to rethink how their systems work and “talk” with one another. Connecting previously disparate channels is becoming a priority, allowing credit union employees to engage with the member in multiple, more interactive ways. Enabling simplicity and convenience will remain a main focus in all member interactions, including providing easy, digital-first ways to open and onboard accounts.

Strategies for ATM management are shifting as well, as more credit unions embrace the ATM as a Service model. Outsourcing provides significant benefits to both credit unions and members. Institutions can reduce cost and complexity, innovate more quickly, mitigate risk and enhance regulatory compliance. Simultaneously, members find value in expanded services and availability.

Prioritizing Payments – With an Eye Toward Small Businesses

Bigtechs, fintechs and even major retailers (like Walmart) continue to vie for mind share, entering the space with different payments offerings, such as small business payments, P2P and BNPL. Credit unions must solidify their payments strategies, identifying and prioritizing which options and methods are most relevant for their unique member base. Providing more comprehensive payments capabilities will be critical to competing with the broadening and intensifying competitive landscape.

Payments is an especially important part of the equation when it comes to better serving small business members, which remains an important strategy for growth. Even though there are countless digital payments tools currently available for these members, it can be a confusing market to navigate. Credit unions have the opportunity to do more to deliver trusted, secure, flexible payments offerings for their small business members, helping them understand which options best meet their unique needs as well as the needs of their customers.

As we look toward a turbulent new year, credit unions have a strong opportunity to focus on the areas and initiatives that will most directly support their members and communities. Those that lean into modern, open technology and set strategic priorities will be well-positioned to quickly innovate, boost efficiencies and deliver leading member experiences.

Terry Duffy is SVP and General Manager, Self-Service Banking for the Atlanta-based NCR Corporation.