The plaintive cry from a credit union senior executive had to grab you: When does the technology innovation cycle end?
His complaint: just about daily there seem to be needed improvements to online and mobile banking, mobile Remote Deposit Capture, peer to peer payments, and so forth.
By contrast, open a new branch and, shazam, nothing more needs to be done with it for a year, maybe three.
So when can a credit union sit back and declare its digital work done?
Here’s the answer: that day never comes. Never.
And for this cycle of continuous, unending improvement be grateful.
Here’s the reality: technology has let credit unions compete very successfully with banks. Used to be, most banks had a big advantage: their extensive branch networks. Credit unions, generally with tiny branch networks, only envied what banks had.
Now, with technology, I have a credit union branch in my pocket – and in fact I have never been in any branch operated by my principal credit union which happens to be in north New Jersey. That’s never as in never.
Between mobile and online banking I can do what I need to do and, no, it doesn’t bother me that the nearest branch is about 2400 miles from my present residence.
Full disclosure: I also have a membership in a Phoenix credit union with a branch a block from me. I have been in it only once, in the account opening phase. I also have a Chase account and there are two Chase branches near me.
I have only rarely gone into them.
That’s the point: branches, once a key bank advantage, now have become an expensive albatross around the necks of banks. Most want to shut one-quarter or more of their branches, executives tell me, but long term leases keep them locked in.
Now, back to continuous tech improvements. Right now, I know many credit unions that are working hard to go live with voice banking as an Alexa (Echo) skill with Amazon. I know other executives who are stampeding towards more biometric log ins for mobile banking – possibly face recognition, or maybe retinal scans.
Others are focused on giving members realtime p2p payment tools.
That’s all cool. This kind of progress will thrill at least some members. That’s reality: technology is allowing credit unions to satisfy, even thrill, more and more members.
Just a decade ago, many saw credit unions as artifacts of a past time, relics of a bygone age. Technology has given new life to the industry, made it relevant in ways that would have been unimaginable in 2000.
Credit unions also have a big advantage over most banks, especially the money center banks. That’s because a credit union’s technology footprint just is simpler – and that mean it is much easier to integrate upgrades and innovations.
Big banks, usually, are patchwork quilts of core systems of many meged in banks. Getting anything to work across that complex system is a challenge.
That’s a challenge that honestly no credit union faces. Advantage credit unions.
But here’s the bottomline: credit unions, unrecognized by many executives, have become technology companies. And in the technology world improvement is continuous.
That’s a good thing. I remember my first computer – an IBM PC clone, acquired in 1983 – and much as it delighted me, today I wouldn’t know what to do with it. Today my iPhone is dramatically smarter than that bulky computer with a green screen monitor and a couple of floppy drives (no hardrive).
The march forward in technology has been continuous for at least 50 years. Credit unions are prime beneficiaries.
Technology is letting more credit unions meet more members’ needs and doing it on a cost effective basis.
That’s why it is good to be a technology company.
The next wave of competition, very likely, will be non-banks that at their heart are technology companies, not financial institutions. They likely will give fits to big banks who will struggle to compete.
Credit unions – because they too are technology companies – will be that much readier to compete.
The future looks good.