2023: The Year to Focus on ROI Drivers & Tech Partnerships

As interest rates remain the highest they’ve been in 15 years and the inflation rate for goods and services continues to soar, many members have entered into the new year with anxiety around their finances. Such times of unease are often when members need their credit unions the most, and credit unions have proven time and again that they’ll do whatever it takes to support their communities and reinforce the credit union philosophy of “not for profit, not for charity, but for service.” However, credit unions themselves are also challenged by the economic environment and thinning margins.

In order to provide the needed level of personal, comprehensive support and service members need, more credit unions this year will rely on technology as well as fintech partners to help boost efficiencies and enhance member service. There are several areas that will emerge as priorities this year.

1. There will be an increased emphasis on ROI drivers.

The uncertain economic landscape is prompting a reevaluation of where technology dollars and effort should be spent. Projects that might have been at the top of the list in the past are suddenly being moved to the back burner. This year, the focus will be on investing in technology that directly helps optimize costs and enhance efficiencies, such as automation.

While innovation will continue to be critical to credit unions, innovation budgets and resources will be allocated toward areas that are certain to impact member service. For example, instead of investing in the exploration of emerging technologies such as the metaverse and Buy Now, Pay Later (BNPL), priority will be given to areas such as digital account opening, online and mobile banking, and online loan applications.

2. Institutions will reflect on lessons learned.

Last year, many of the industry’s new initiatives were adopted with varying levels of success, leaving much to reflect on. For example, while many institutions were quick to offer real-time payments, they were also unfortunately met with an influx of fraud. According to PYMNTS’ “State of Fraud and Financial Crime Report,” 62% of financial institutions have experienced a sharp increase in fraudulent transactions. And many institutions’ customers and members especially faced a spike in fraud when making instant payments via Zelle.

Next year, even more of an emphasis will be placed on risk versus reward evaluations when it comes to vetting new products and solutions. While credit unions have always been vigilant in their new diligence, they will apply lessons learned from the past year to fortify their efforts that much more. While the evaluation process is often complex and resource intensive, the juice is well worth the squeeze. After all, safeguarding members and their data is vital.

3. Credit unions will look to technology to help with succession planning.

The persistence of the Great Resignation and Great Retirement continue to plague businesses of all kinds, and credit unions are no exception. The talent shortage can be especially difficult for credit unions that rely on the skill set or knowledge of a small group of people to keep certain departments running. If someone quits or retires, operations are negatively impacted.

Looking to technology and strategic partners can help institutions bridge these talent gaps. Incorporating more automation and workflows equip credit unions to keep processes running when positions are difficult to fill. Such technology empowers employees while adding efficiencies. And, outsourcing critical IT functions to a trusted partner can strengthen business continuity no matter the circumstances. Use of technology such as the cloud and AI/RPA will continue to increase this year.

Even though 2023 has started with widespread financial concern, credit unions are strongly positioned to do what they always do and provide a high level of support and service for their members. As the backbones of their communities, this year credit unions will prioritize those projects and innovations that drive ROI, help boost efficiencies and ease talent struggles, and most importantly, improve member service and support.

Larry Nichols is President/CEO for the Farmington Hills, Mich.-based CUSO Member Driven Technologies (MDT).