The founding purpose of credit unions has been to serve their members. When society and consumers’ needs evolve based on the advanced tools and technologies they utilize every day, so must the credit union adapt to meet those consumer requirements.
To stay competitive, it has become essential that credit unions explore contemporary and forward-thinking ways to exploit financial technology to achieve those same organizational goals while expending less energy, time, and effort.
What IS digital transformation, and why is it important?
At this point in 2021, the concept of “digital transformation” has become a common term since the coronavirus accelerated the adoption of digital banking products and services in early 2020. The challenge, however, is that the term can also be daunting or intimidating to the very organizations that need to upgrade certain member-facing programs.
At its center, digital transformation is used to describe an organization that takes advantage of digital technologies to offer new forms of efficiencies and value that can only be accomplished digitally. Digital transformation can influence every department of an organization — from IT systems to transactional processes to its people. (Imaginet) From financial institutions limiting branch access and hours to the fear of contaminated paper bills and coins, COVID accelerated the changing relationship between the institutions and their consumers.
For those yet to incorporate the necessary digital tools like fintech into their platforms, the time is now. According to a CU Times analysis of the National Credit Union Association’s fourth quarter data, more than 5.6 million members signed up for online banking with their credit unions in 2020, compared to four million in 2019.
In a September 2020 online event, IBM North America’s Dino Trevasini suggested that, because of the advancements made due to the COVID-19 pandemic, financial institutions of all types will be making a decade’s worth of progress in more like five to seven years. “What we’re seeing is the greatest acceleration of digital banking in history,” says Mike Mayo, securities analyst for Wells Fargo. “What’s taken place over the last few months may have taken place over two to 10 years” if the pandemic had not come along.
With commentary like that from financial service industry pros, does that offer a sense of opportunity for you or uncertainty? Drop a comment below!
“There was an idea…to bring together a group of remarkable people…”
While society continues to adjust to the proper social distancing measures and mask mandates to counter the growing threat of the Delta variant, the credit union movement still endeavors to innovate and push the boundaries of digital transformation for the betterment of members everywhere.
This last June, Credit Union National Association president and CEO Jim Nussle announced an inspiring initiative called the Credit Union Digitization Working Group. Evolving out of CUNA’s COVID-19 Restart and Recovery Task Force and led by CUNA Chief Engagement Officer Greg Michlig, the mission of the continuing 41-member working group, according to Nussle, was to research “current and upcoming digital trends in the financial services sector while exploring ways credit unions can leverage technology to drive member satisfaction.” The group is separated into five different work groups whose purpose is to identify barriers, examine solutions, and find ways to take practical action on those solutions that will propel digitization forward in the credit union industry.
The members contributing to this group have defined their purpose and goals, and those goals are lofty. This industry-wide focus on digitization and the digital transformation journey includes every kind of mobile product within a smartphone app, accessing new avenues to underwriting loans, and providing the most available means to enhance financial inclusion on behalf of the underbanked.
Time for credit unions to LEVEL UP
While the power of the credit union movement and digital banking within has shown itself to be growing in the last decade, the lockdown last year forced organizations to floor the accelerator to catch up to what members and consumers need. According to CUNA’s 2017 Credit Union Awareness initiative, potential members were skeptical about credit unions’ ability to compete with big banks in technology innovation. It’s time to show members and the rest of the country the true power of what the industry can do.
A big part of that power is the credit union movement’s inherent ability to come together in the spirit of mutual cooperation and collaboration! By working together with the many state and national credit union organizations to encourage financial inclusion, digital transformation can undoubtedly give the movement a major boost in the financial services marketplace in the years and decades to come.
What is your reaction to the digital transformation movement presently occurring in the credit union industry, and the financial services industry in general? Comment below or reach out to us on social media @QCashFinancial.