Is the iPhone5 One More Nail in the Credit Union Coffin?

by: Ron Daly, President/CEO, DigitalMailer, Inc.

According to the History Channel the Smart Phone is the #1 Gadget of the past 100 years. This diagram shows the convergence of all the previous technology that is now available in one device. This month was the release of the iPhone5 with even more technology wrapped into a Smart Phone.

I was recently at a conference earlier where the executives of financial technology providers gathered to discuss financial industry trends and the future of technology. The agenda ranged from new ways to use old technology, to using social media to help banks and credit unions, to emerging mobile technology and payments. One prediction from a mobile payments expert – the advent of mobile payment technology and the growth in remote delivery services will eliminate a major credit union’s competitive advantage. The presenter goes on to say that mobile devices will disrupt face-to-face customer service within three to five years and credit unions will lose their competitive edge because of that disruption.

I don’t think the iPhone5 is one more nail in the CU industry coffin. Especially since it doesn’t have the NFC capabilities everyone was looking for. I do get what the mobile futurists are trying to say…credit unions are known for their commitment to member service. But as consumers’ mindsets change towards mobile devices and remote services, the member service piece will be disconnected… which will eliminate the major differentiator of the industry.

How will your CU survive the mobile transformation of banking?

Smart Phones and tablets are transforming the way business and banking gets done. Even today, face-to-face interactions are being eliminated as self-service devices and applications become the norm. During the transformation of banking it’s critical that CUs focus on how to make all of their financial services available remotely. Upgrade websites to offer information, education and online service delivery; and provide e-banking programs that enable quick access to transactions, account monitoring, and key documents. Add to that, mobile capabilities for transactions, account alerts and promotions. Look at incorporating email, text and voice messaging as key communications channels. The focus also needs to be on increasing service quality and member convenience with programs that use current technologies to allow for targeted opportunities, less dependency on branch networks and two-way, personalized communication.

I think the article “Mobile Doesn’t Matter” by Kevin Moland on the Profitstars Strategically Speaking blog sums it up nicely

“… strategically speaking, mobile devices are not the end game. They are—like all the technologies before them—a bridge to whatever is next. The time and resources you spend “getting mobile right” could be wasted three to five years down the road unless you design and build these solutions to evolve with and ultimately transcend the platform itself. Should banks and credit unions build the best mobile apps they possibly can? Absolutely! But to thrive in the years ahead, financial institutions and service providers have to build today’s solutions with tomorrow’s technology in mind.”

It all comes down to a successful eStrategy. Credit unions must rethink traditional ways of doing business and look for innovations that keep the commitment to member service in the technology. To do this, CU leaders should expand their knowledge and information gathering outside the standard credit union conferences. Make it a point to attend learning events that focus on banks and credit unions (BAI Retail Delivery), or better yet attend conferences that focus on technology across multiple industries. Don’t let mobile technology disconnect your credit union from its competitive advantage!

What’s your opinion on mobile as a “game changer” and what credit unions need to focus on?

Ron Daly is the President/CEO of DigitalMailer, Inc., a firm providing the self-service digital communication tools today’s financial institutions need in their virtual branch, as well as the expertise and resources to use them in their eStrategy to Connect. Communicate. Grow! To learn more, visit www.digitalmailer.com or call 866-994-4900.