Mobile or mortar? A winning technology strategy
With changes in the technology landscape where should credit unions focus their budgets during 2017 and beyond? Technologies such as mobile banking have become increasingly visible, but bricks-and-mortar locations continue to be a strategy for many large financial institutions. To bring light to this discussion, a recent Harris Poll of more than 3,000 U.S. banking consumers found that 53% of people preferred online or mobile banking for standard daily transactions, surprising? No. What was is that 61% of consumers still visited a branch in the month they were surveyed. 41% of consumers said they preferred a traditional branch while only 2% chose a fully automated branch with no personnel on site. In addition, more than 80% of consumers logged on to their primary financial organization’s banking site in the month leading up to the survey, averaging just over 11 visits each. So what does this data tell us? Mobile is clearly a preferred and convenient channel but don’t close your branch(s) anytime soon, members are still visiting brick and mortar. Even though this study highlights the importance of your physical locations as a matter of member convenience, a technology strategy will help your credit union remain competitive. Just make sure it’s the right technology, more than four in five purchases are made through point of sale terminals for instance, but mobile wallets represent fewer than 1% of all transactions, according to a study by Bank of America.
Member facing technologies should be the focus of your strategy, especially if you are a smaller credit union. A study by Callahan & Associates discovered that credit unions with fewer than $100 million in assets that offered seven key technologies posted 3.37% year-over- year member growth. What were the key technologies?
- mobile banking
- remote deposit capture
- electronic signature authentication
- electronic bill pay
- electronic member application
- electronic loan application
- electronic share account application
Interestingly and importantly, for credit unions that offered only some or none of these technologies, member growth was negative. What? Not idle or unchanging, but negative! This study alone provides a road-map for credit unions developing a technology and/or growth strategy. Members prefer technology for standard, daily transactions, yet feel more comfortable visiting a branch to apply for and receive a loan or open an account, just as the study conducted by Harris Poll illuminated. To get technology right there appears to be an order of importance and not all technologies are as exciting to members as Apple, Google and every other Fintech company wants us to believe. Noticeably absent from the Callahan list are mobile wallets, P-2-P (person-to-person money transfers) and PFM (personal financial management). Bread-and-butter services extended to the digital channel is a winning strategy. You don’t need to invent new technologies, become a coffee shop or turn your branches into an Apple Store. Your members want to meet you where it is convenient for them.
