This article originally appeared in CUInsight.
Trying to keep up with members’ wants probably feels like trying to hit a moving target. Making the big and time-consuming investment in one area seems to never be enough, there’s always something more that is needed. It isn’t sustainable. You have to adopt a more flexible approach that gives you the foundation you need to adopt new technology faster, rather than starting from scratch or running into limitations because a new fintech doesn’t integrate with your core.
For credit unions, digital transformation remains king. Even in uncertain economic times, 40% of the financial intuitions surveyed are increasing their technology budgets (Tech Trends Report 2023). But, throwing resources at the wrong technology can cost you in the long run. These are the 5 ways credit unions should approach technology investment and usage to become agile enough to exceed member expectations.
There is a growing need for FI’s to differentiate themselves by delivering ease and convenience in how members access and connect with their services. In an era of increasing digitalization, members expect seamless and user-friendly interfaces that provide effortless access to banking services, whether it’s through mobile banking apps, online portals, or other digital channels. Credit unions that prioritize ease of use and offer a seamless omni-channel experience gain a competitive advantage in attracting and retaining members.
- Leverage new services
The banking landscape is evolving rapidly, with emerging technologies and innovative financial solutions disrupting traditional models. To remain relevant and capture new opportunities, FI’s need to embrace these new services, such as digital payments, automated balancing, and comprehensive e-signature solutions. To do this, your system has to be agile enough to adopt new fintechs quickly.
- Digital transformation
Improving the member experience through digital transformation has become a key objective for FIs. Members now expect personalized, efficient, and secure interactions with their financial institutions. By leveraging fintechs and digital solutions, credit unions can enhance the member journey, streamline processes, and offer tailored experiences that cater to individual needs. From associate onboarding to member support, digital transformation allows credit unions to deliver a seamless and member-centric experience.
- Reduce costs
Reducing costs through the elimination of manual and laborious steps in processes is another objective that FI’s are focusing on. Automation and digitization of routine tasks, such as account opening, loan applications, and transaction processing, not only improve operational efficiency but also reduce the risk of errors. By optimizing processes, credit unions can allocate resources more strategically and enhance productivity.
- Modernize your core
Financial institutions are recognizing the importance of modernizing their current core systems to enable seamless integration of new services, efficient data management, and real-time analytics. This transition to modern, cloud-based core banking systems (CBS) is a top priority for operational transformation, according to the 2022 Publicis Sapient Global Banking Benchmark Study. The study found that 37% of senior banking leaders surveyed aimed to transition to a modern CBS, with 48% of leaders from the largest institutions prioritizing this goal.
Modern, cloud-based systems (CBS) are considered the way forward as banks seek to move away from legacy systems. Legacy CBSs are difficult to modify, making it challenging to introduce new capabilities or innovate on these systems. As a result, banking architectures are undergoing a profound transformation toward a “coreless” approach. In a coreless architecture, key functions like accounts, transactions, and product definitions reside in the core, while everything else operates outside of it, connected through APIs. This minimalist approach bears little resemblance to the extensive functions of legacy systems.
The solution is a gateway to connectivity
Connectivity is key. It has never been more critical for credit unions to transform their processes with effective API connections & full integrations of fintech solutions. It’s not enough to check the boxes with disparate systems, you need to have a fully integrated ecosystem. Those who can’t be agile enough to keep up with the next thing will be left in the past.