Top digital transformation challenges to address
Practical solutions to take your digital journey — and budget — forward
Just as upgrading technology has become a greater priority … inflation, shrinking margins and reduced deposits have slowed or stalled the implementation of new technology.
Three common major obstacles standing in the way of their digital transformation progress include:
- Core data processing compatibility issues
- Resource constraints
- Unfavorable vendor contract pricing
In order to meet today’s consumer expectations, stay relevant, keep pace with new technology and move forward strategically, these challenges need to be addressed with practical and effective solutions.
Challenge 1: Does your core data processor meet your future tech needs?
Some core processing platforms that credit unions have relied on for years are being phased out. Now many, for the first time in decades, have the monumental task of finding and migrating to a new solution. It’s a long transition that takes time and energy away from day-to-day operations, and it locks the credit union into using a provider for several years.
When converting to a new core, ensuring it is compatible with technologies you may want to implement in the future is essential. Will it be equipped with modern Application Programming Interfaces (APIs) familiar to developers? Can you add the applications you want that best match consumer needs? Or is your core processor out of step with modern technology?
Solution: An expert in this field can help you answer these questions, improve your API integration strategy and address any compatibility issues before long-term vendor contracts get signed. Because getting locked into an unsuitable core provider means getting locked out of valuable growth opportunities for years to come.
Challenge 2: Are resource constraints delaying important projects?
Whether it’s time, money or staffing — or, in many cases, all three — most credit unions are feeling their limits.
The Great Resignation saw record quit rates in 2021, and on the whole the road to recovery continues. Being understaffed leads to putting projects that could immediately impact the bottom line on the back burner. As, budgets remain tight, it often leads to hiring difficulties and missed opportunities. And the cycle continues, leaving few resources for your digital transformation projects.
Solution: Accomplishing all of your important projects in-house — under time, staffing and budget crunches — is not feasible for many smaller community financial institutions. Partnering with a trusted industry expert can help eliminate the resource bottlenecks holding you back. With outside objectivity, a hands-on approach and direct experience, the additional support can give your digital projects the necessary time and energy, enabling your team to continue their day-to-day work.
Challenge 3: Are your vendor agreements holding you back?
Equally pressing is ensuring vendor contracts — like card processing, card branding, core processing and mobile banking, to name a few — provide competitive pricing and all the services necessary to attract and retain members. Whether directly or indirectly, most of these contracts affect your digital transformation.
For many credit unions, it’s often a case of “you don’t know what you don’t know” when it comes to vendor pricing and contract negotiations. In some cases, due to specific contract terms, rising interchange fees are costing financial institutions more than they realize. In other cases, pricing greatly exceeds what their competitors pay simply because the contract wasn’t negotiated astutely — or at all.
In too many situations, you could likely be overpaying your vendors. And that’s money that could otherwise be going directly into your digital budget!
Solution: An experienced contract negotiator with specialized knowledge of our industry’s vendor agreements can help secure five-, six- or even seven-digit savings. In many cases, they can also get you the most beneficial terms — and even signing bonuses and marketing credits for additional services.
The savings achieved through partnering with a professional negotiator far exceed the cost, and it requires little time and effort on the part of your staff. It makes optimizing your vendor contracts one of the fastest and easiest ways to find the necessary budget to help fund your digital transformation.
The value of an industry partner
Overcoming core compatibility issues, resource constraints and unfavorable vendor contract terms will go a long way in getting you on track to achieve your digital transformation and growth goals. The key is to re-evaluate your tech stack with an expert. Here are a few probing questions to get started:
- Do we have the technology needed to attract and retain members in today’s digital-centric economy?
- Is our core processor helping or hindering our ability to keep pace with technology and consumer needs?
- Are our current vendors and contracts best positioning us for future growth?
- Are we getting the most value from our vendors?
- Are we overlooking opportunities to save money or enhance our services?
A consultant with niche expertise in technology strategies can help identify the most beneficial solutions for your unique goals and help you find the funds to implement the services to drive growth and satisfaction ratings.
For more insight into achieving the digital future your credit union and members need, tune in to the webinar, Uncover Hidden Treasure in Your Vendor Contracts.