The rising use of digital banking, the advent of new technologies, the blurring of industry ecosystems, and a greater emphasis on innovation are all producing challenges and possibilities in the banking business, and more so for Credit Unions.  

Customers are increasingly turning to fintech solutions and big tech platforms for vital financial services such as deposits, loans, payments, and investments, fragmenting existing relationships. However, adopting technology trends that help Credit Unions solve most of these problems are yet to be embraced whole-heartedly. 

“Credit Unions (CU) took a more aggressive approach to innovation in 2020 than they did in 2019, ” according to a PSCU and PYMNTS.com study. In 2020, 12% of Credit Unions said they released new goods and services ahead of their competition, while 46% said they were quick to invent new solutions after watching market trends. 

CUs tend to have a completely different perspective than their members on what constitutes ‘innovative’ products and services, according to the same study. In fact, many members don’t perceive the innovations their Credit Unions launched in 2020 to be innovative in the truest sense. 

To continue to provide the quality of service that members want, Credit Unions must also modify their technology infrastructure and delivery methods. Here are eight Credit Union Technology trends to keep an eye on if your Credit Union is looking to be responsive to disruption and achieve success in 2022 and beyond. 

Trend 1: Design thinking – To enable seamless experiences 

When we talk about design thinking in banking, most IT specialists only think of the front-end. However, they should recognize that design thinking extends much beyond the User Interface. Occasionally, users exit the financial application they are using in the middle owing to factors such as long loading times, frequent app crashes, irrelevant offerings, annoying app alerts, and so on.  

Consider this: Is it just UI that has an impact on consumer interests? It goes much deeper. Design thinking is a technique for ensuring that a website or application is developed with the target customer’s pain points in mind and provides the best answer.  

Empathy banking, which caters to your customers’ demands fully, is one of the most crucial aspects for Credit Unions to focus. CUs may attract customers by providing end-to-end seamless app/web functionality as well as an easy-to-enunciate user interface.  

Trend 2: Digital Transformation – For Customer Satisfaction 

For Credit Unions, digital sophistication will be the decisive factor in customer satisfaction. As an example, consider the huge gift of digitalization for financial organizations — Artificial Intelligence. AI can be a one-stop shop for Credit Unions, providing solutions ranging from consumer insights to fast credit report analysis. Machine Learning, RPA, DevOps, and other technologies are strengthening the digital kingdom for Credit Unions by acting as extra limbs to this AI.   

Here’s an example of a real-world circumstance that demonstrates the necessity for digital finance. During the interval between the pandemic lockdown, many SMEs and MSMEs sought financial aid from Credit Unions, and the frequency was unusually high. Manual onboarding and loan processing were not only time-consuming, but also resulted in discrepancies, which led to disgruntled customers.  

As a result, customers learned that digital is the new normal, and Credit Unions must comprehend and embrace this concept. Furthermore, digital processing provides a well-defined financial procedure with minimum mistake, making the task easier for Credit Unions. 

Trend 3: Open Banking – Catching the wave for collaboration 

Open Banking has emerged as a significant driver of digital banking transformation, influencing technology and infrastructure expenditures, data modernization and decentralization plans, fintech alliances, and even reskilling programs. 

Whatever the rationale, the term “Open Banking” refers to the capacity to exchange data via APIs (Application Programming Interfaces), granting third-party services access to a Credit Union’s member data – financial or otherwise.  

API-powered Open Banking is the way ahead for Credit Unions to stay up with the feature-rich competition and swiftly provide the experiences and capabilities customers require. 

Trend 4: Analytics – The Aladdin’s lamp of the digital dynasty 

Analytics may be thought of as the Aladdin’s lamp of Credit Unions since it assists in creating customer-focused experiences and achieving the desired ROI. There are several ways this manifests, including customer analytics, fraud analytics and business analytics among others.  

Analytics functions as the brain for AI, nurturing root information for AI to process further. It collects both organized and unstructured data, segments it and translates it into actionable insights.  These insights are utilized to target audiences, manage marketing campaigns, meet corporate goals, and so on.  

With clients expecting digital financing, Credit Unions must think outside the box to attract the appropriate customers, and the best way to do it is through customer analytics. The most striking part of analytics is the ability to provide real-time data, which aid in the identification of comprehensive client problem spots for further investigation. 

Trend 5: Cloud Tech – For better Digital Banking 

Credit Unions must seek to cloud computing solutions to store data and enable applied analytics in order to meet the need for capacity and speed. Consequently, cloud computing strengthens consumer insights, improves efficiency, enhances innovation, raises agility, and decreases the danger of security or business continuity breaches.  

Credit Unions must replace old on-premise infrastructure that is more difficult to upgrade and costly to maintain. Successful firms must seek flexible, scalable solutions that are both responsive and efficient now more than ever. 

Cloud computing, whether private, hybrid, or public, allows enterprises to be significantly more agile while lowering IT expenditures and operating expenses. Furthermore, cloud models allow enterprises to embrace the digital transformation required to be competitive in the future. 

Trend 6: Cyber-threats – The Need to Safeguard Your Business 

Cyber-attacks have severe immediate financial implications on Credit Unions and endanger reputations and business prospects. Protecting consumer information and vital infrastructure from cyber assaults is becoming increasingly important, but also more difficult to resist.  

Common security challenges include – Identity theft, credential stuffing, phishing attacks, spoofing etc. However, certain strategies can prove to be useful in preventing cyberattacks in digital banking. They are – Multi-Factor Authentication, end-to-end encryption, Machine Learning and Big Data analytics, enabling real-time alerts, customer awareness.  

In the long term, this mandates that every credit union implement reliable cybersecurity measures that do not jeopardize the security of customers’ and financial institutions’ data and money. 

 Trend 7: Changing Perspectives – Adapting to the Zoomer’s Way of Thinking 

The Zoomer viewpoint is the most intriguing and significant trend. Zoomers and Millennials think and behave differently than Boomers, and Credit Unions must re-define their offers to accommodate the new perspective.  

Zoomers demand financial institutions to function as financial counsellors rather than just a location to store and invest money. This has wide-ranging implications – from personal finance management to payment lifestyle.  

Credit Unions must rethink their tactics to meet the needs of today’s youthful customers and invest in their innovative ideas to ensure enhanced customer satisfaction. 

Trend 8: Empathy banking – Paving the path for Financial Inclusion 

Following the 2008 financial crisis, the goal of establishing Credit Unions was to assist SMEs and MSMEs in maintaining their operations and contributing to the global economy. This distinction between banks and Credit Unions is referred to as Financial Inclusion.  

Small and medium-sized businesses are now the fastest growing contributors to the global economy. Credit Unions must address financial inclusion and aggressively assist the underbanked in order to secure financial viability. It might be people or groups; for the post-pandemic revival, businesses require this aid more than before. 

 Conclusion 

While the necessity for Credit Union remains, banks are proving to be formidable competitors for Credit Unions by adopting technological improvements that cater and attract new customers. The only thing that can allow Credit Unions to fast forward their journey of improvement is technological innovation, thereby, is the absence of legacy systems.  

Modernization and digital channels that appeal to the expanding millennial audience can help CUs avoid the obstacles of legacy systems and the requirement for expensive technology spending. The Credit Union avatar of Bank in a Digital Box (BiDB) gives the Credit Union the flexibility to reconstruct products as needed. 

Credit Unions that have a clear vision are speeding up their digital transitions, reinventing everything from their people and data to their architectures and ecosystems. A new era of banking rivalry draws near, one in which architecture counts, and leaders will be determined not just by the success of their business initiatives, but also by the brilliance with which they use technology.  

However, everything comes down to customer experience and satisfaction in the end. Credit Unions that focus on customer pain points and provide relevant solutions will eventually govern the financial world. 

 

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