Credit unions are positioned to help businesses win in 2021
Artis Technologies discusses the role credit unions can take in a post-pandemic environment
ATLANTA, GA (October 19, 2020) — In 2020, traditional banking models were challenged, innovation was at an all-time high, and digital became an undisputed priority. Moving into 2021, credit unions will be challenged to develop their relationships with business members and help them regain their footing in this new economic environment. Credit unions can learn from B2C fintechs and become deeply embedded in their members’ lives – that’s the untapped $4 trillion market opportunity. Artis shares four areas where credit unions can win in 2021.
- Fintech 3.0 is mature. B2B and B2B2C fintech is making the leap that we saw B2C fintech make a decade ago during fintech 2.0. This new wave is about fintechs integrating their AI, ML and modern services into banking to enhance business brands, not necessarily compete with institutions.
Credit unions can move past being nameless, faceless entities to corporations and leverage AI, ML and highly integrated services to enhance, the business’s value to members. Credit unions that use open APIs can easily benefit from these innovations to deliver a better member experience and win back market share.
- Financial services will be embedded into everyday lives. A function of fintech 3.0 will be embedded financial services; B2C tech companies like Venmo and PayPal have already mastered this concept. Many brands have become tech-enabled to take advantage of seamless financial experiences. As financial services are made more readily available by companies like this, customers will come to expect them in every opportunity.
There is still time for credit unions to be involved and capture a member touchpoint at a place where they wouldn’t normally be present. Credit unions will be challenged to lower functional costs and get into more apps, websites and processes that can automate customer experience. As businesses seek to become integrated into the daily lives of their members, credit unions should be empowering them to offer real-time loans (backed by a solid reputation for security and longevity) to members when they need it most.
- The trust (and subsequent rise) of AI. People have been hesitant to trust AI, especially when it comes to financial services. However, this technology has been around a lot longer than people realize and is already part of their everyday life. AI can be used in ethical ways to account and/or remove biases to ensure the consumer is receiving more accessible credit and financing. There will be a rise in AI adoption as financial institutions partner with fintechs to gain better results, save time, and build business.
This will be the tip of the iceberg. People will continue to differentiate AI models and usage in the months to come, grappling to come to terms with the sheer volume of data and data scientists available. Underwriters, for example, will have a difficult time in 2021 determining which models are good or bad. It’s going to take some practice.
- More than traditional credit models. Attributes used in credit decisions need to be expanded to account for the impact of Covid-19, especially from the non-reported delinquencies. The industry has seen this coming, and is finally forced into taking action. Leveraging expansive alternative data, beyond traditional credit models, will be key to making quicker, more accurate credit decisions. Alternative data sources may include public records, utilities, social media, spend habits, employment, history of file, fraud and risk.
Financial institutions should leave this pandemic having learned to work smarter, not harder. Credit unions have proven they deliver great value when they partner with fintechs to leverage their expertise, but there’s still a good deal of work to be done on both sides. 2021 will challenge credit unions to become part of members’ everyday financial lives with embedded financial services.
About Artis Technologies
Artis Technologies powers modern lending solutions for businesses to provide affordable, low-friction financing to their customers at the point of need. Its API-based platforms creatively leverage alternative data sources and ML/AI-informed decisioning to present real-time loan offers fit to each individual borrower, all done within the banking industry’s current regulatory infrastructure. Visit heyartis.com for more information.