Disintermediation in the time of COVID-19

How five cooperatives ward off disruptors, an imperative that takes on new urgency now.

Consumers fearful of direct contact with everything from snail mail to drive-thru receipts are just one example of why credit unions need to pay attention to disintermediation.

That’s the term in the financial services space given to what happens when consumers choose non-bank providers for financial services, especially payments.

As COVID-19 sweeps across the country, credit unions are shuttering lobbies and urging members to use digital channels, opening the door to non-bank competitors promising an easy way to pay without leaving home.

It’s not that credit unions weren’t already responding to disintermediation. The Strategic Resource Management (SRM) consulting firm polled its client base of hundreds of credit unions and banks in late March and found eight out of 10 rated their online and digital channels as “vital” to their operations. The rest chose nothing less than “important.”


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