From the exponential growth of digital apps and their usage by credit union members to increased cybersecurity concerns and requirements along with the accelerated evolution of traditional services to meet consumer expectations and compliance needs, 2022 promises to be another pivotal year in the financial services industry.
For many credit unions, one impact of the rapidly shifting business environment is the increasing complexity of their technology environment, leading many to look for ways to stay ahead of the curve in this area. If this situation is familiar to your credit union, narrowing your focus to only the key trends that will support the growth of your credit union’s member retention and revenue can help you be more efficient in achieving your goals.
Consider each of the following six strategies and how you can use them to prioritize the investments and effort required to improve your credit union’s ROI through the use of technology. Each one can provide a catalyst from which to build the digital infrastructure you need to remain competitive in your market and stay ahead of the technology curve in 2022:
- Leveraging technology as a competitive advantage. Looking at the current business landscape beyond financial services, it is evident that organizations that fail to implement and master technology in their operations will be left behind at best, and in many cases, they will lose out completely in the market. As such, your credit union should make being appropriately technology-enabled a top priority in order to obtain and maintain a competitive market advantage.
- Embracing opportunities with the “open banking” concept. Open banking refers to third-party service providers using open source technologies (i.e. being able to tap into the API of a solution and add on to it for their own purposes) to build financial applications and related services. The opportunities for financial service providers and their partners in this realm are expansive and exciting, as long as the accessibility is managed strategically and securely. The key advantage for credit unions using open APIs is the ability to build their own customized technologies, in addition to being able to leverage those built by others at (hopefully) a lower cost than traditional “single source” solution suites.
- Respond proactively to the impact of neo-financial institutions. It’s no secret that digital processes are quickly replacing traditional service channels and operational transactions. The question is, how are you responding? If you aren’t already seeing a significant shift in your members’ preferences for digital service delivery, you will be soon. If your credit union experienced a drop-off in revenue last year, it may actually be tied to member losses due to migration to a competitor with more digital offerings. Regardless, now is the time to make changes to your technology infrastructure to proactively position your credit union as a preferred service provider for your members and to streamline operations, making them as efficient as possible.
- Adoption of a digital-first decision-making mindset. Instead of thinking about technology as an operational expense for your credit union, it should be viewed as a driver of revenue and relationships due to the opportunities and capabilities it provides in all touchpoints and processes of your credit union operations. Consider how technology can support all of your strategic goals by creating cost-efficiency, new products and services, and a better member experience.
- Rethink the member relationship model. Success for credit unions still relies on cultivating strong member relationships, of course, but the way those relationships are formed, nurtured, and beneficial between your employees and members is fundamentally different than even five years ago. While it’s important to have a personal relationship that differentiates your credit union, it’s equally important to use technology to personalize the way each member is affiliated and engaged with your institution based on their needs and preferences.
- Evaluate the impact of omni-platform migration on your credit union. A significant trend in financial services is the preference of consumers for organizations with the ability to provide one platform where all related services can be accessed, rather than having to use multiple providers for a single type of service (i.e. money management and financing). Can your credit union provide a seamless experience and delivery of comprehensive services to your members? If not, consider the pros and cons of being able to deliver this to your current and future member base and if the investment may pay off in the future.
Your team is no doubt acutely aware of how many of these trends are impacting the way your members interact with your credit union as well as how services need to be delivered to provide the best experience possible. Over the past two years, there has been a rapid shift to digital, open source, and omni-channel platforms, which now has become the new service standard model for financial service providers.
The strategies above can help your credit union evolve to meet new expectations driven by the adoption and advancement of technology. What your team does in 2022 to create and execute a strategic plan for achieving the goals fundamental to your credit union’s future success, can pay significant dividends. This includes the implementation of a digital document management system to ensure you can manage the collection, collaboration, compliance, and cloud-based storage needs related to documents and sensitive data from your members and third-party partners. Learn more at SmartVault.com.