While cloud solutions took the business world by storm about a decade ago, banks and credit unions were initially slow to adopt over prudent concerns about data security. As those data security concerns have been mitigated and the financial services marketplace has evolved, credit unions’ interest in cloud services is heating up, and fast.
But you cannot accurately consider cloud-based solutions without also considering the forces driving technology changes in the credit union marketplace. Here are two trends pushing credit unions rapidly into the cloud.
Rapid Digital Advancement
The advancements in digital banking technology are coming at an increasingly faster pace. This has flattened the competitive playing field in ways that have both helped, and hurt, credit unions.
Today, credit unions operate in a vast landscape of competitors that include other credit unions, banks, and non-bank fintechs located anywhere in the country. Non-bank providers have leveraged technology to provide lending services that have traditionally been credit union’s bread-and-butter – such as mortgage and auto loans – directly to consumers.
Tech-first competitors have been quick-to-market with in-demand, customer-centric solutions. Credit unions cannot overcome this by simply “being more digital.” They must operate faster, quicker, and be responsive to trends and member needs to improve member experience.
At the same time, technology has also expanded credit unions’ reach. Some of the largest credit unions have emerged on the national stage alongside large banks, and regional and local credit unions are finding ways to take their value propositions into previously untapped markets.
Cloud solutions are releasing credit unions from legacy technology constraints and enabling the next wave of digital progress. It alleviates burdens on core platforms, physical servers, and IT personnel. Traditional data center infrastructure is costly and time-consuming to maintain. Cloud-based business analytics solutions are decreasing implementation timelines and cost of ownership by 50-70%.
Decreased Reliance on Branches
The growth in digital banking spurred a natural trend away from branch banking, and then a pandemic pushed even tech skeptics and novices headfirst into digital. These new habits are permanent; most financial consumers now find the speed and convenience unbeatable.
Having a physical branch network is no longer necessary to grow membership. Today, digital-only banking is on the rise, and some credit unions have decided to go the digital-only route.
The less members go into branches, the more credit unions need to be able to inspire affinity and loyalty through virtual interactions. They need detailed and accurate digital pictures of who their members are and how to best serve them. To accomplish this, all sources of data must be integrated into a single source of truth.
Cloud-based data management enables credit unions to centralize, organize, and structure data to improve integrity and make it more usable. It is much more scalable, allowing credit unions to continue extracting new, and deeper insights as their mass of data grows.
The right data strategy makes it possible to personalize and tailor every member experience. Credit unions can accurately understand, predict, and deliver the right information through the right channels. Forward-thinking credit unions will create experiences defined by relevant, actionable, and real-time insights.
The cloud is underpinning the most exciting advancements in technology today, and it has proven its value for credit unions when it comes to speed, cost, scalability, and agility. Cloud solutions poise credit unions for greater innovation and while at the same time enhancing the member-centric focus.