How Credit Unions Can Navigate and Excel in Today's Digital Ecosystem
The digital transformation of financial services is arguably one of the most profound changes in the industry's history. This transformation – and the innovations in technology that go with it – empowers credit unions to deliver a more personalized, engaging, and intuitive member service. Credit union members want speed, convenience, simplicity, and personalization – but also a personal touch.
Credit union members are increasingly becoming "digital-first" in their preference for financial services delivery and access. Many consumers not only prefer digital-first solutions – they expect them. In-branch interactions are declining and shifting in nature. The branch is increasingly becoming a place where members obtain products, seek specialized advice, and solve more complex problems.
So, where should a credit union start when determining its digital transformation plans? The overwhelming feelings that come with digital transformation are often caused by getting started. While every credit union is different, many share the same challenges when it comes to starting their digital transformation journey, namely:
• The Multiplicity of Legacy Systems: in dealing with several legacy systems, most credit unions do not have the resources to replace aging systems or embark on lengthy projects.
• Budget: most credit unions typically operate with tight IT budgets and small teams. They don't always have the luxury of specialist skills needed to identify, integrate, and maintain multiple platforms. This situation improves for larger credit unions but remains a challenge.
• Compliance and Security: with data protection laws becoming stricter around the globe and consumers becoming even more aware of privacy, any Digital Transformation project must have data, security, and regulatory compliance.
Not surprisingly, credit unions are increasingly seeking third parties to expand their digital capabilities. Many have focused on upgrading their user interfaces and using white-label technologies which do not personalize the experience in a way that matters to members. However, the implementation of solutions is not always enough. Credit unions must establish thorough connections with industry partners that can assist in leading them on their digital transformation journey. While digital transformation can be daunting, it is not impossible.
The starting point in our digital transformation work with credit unions is always an assessment process which is vital in developing a credit union's digital transformation roadmap. It is important for the credit union to know how it may stack up against the competition. One key challenge credit unions face is understanding how to improve a member's overall experience and serve as a competing force against large banks and fintechs with ever-expanding digital capabilities.
Next, establishing a clear baseline of goals is essential, and settling on an action plan to achieve those goals is another vital step in the digital transformation process. Credit unions have a detailed understanding of their membership and their members' data, and they must be able to navigate this treasure trove of information to provide digitally-enhanced solutions. The data and information credit unions have are extensive and can be overwhelming when not managed properly. A well-developed digital strategy or transformation plan is the foundation for navigating the digital landscape and enabling a credit union to implement its ideas.
Credit unions have an incredible advantage in truly knowing their members. They also have a prime opportunity to take part in digital transformation – to lead the pack and drive further improvements. Technology should be used as a resource in helping credit unions reach their goal, and digital transformation initiatives should consist of quality solutions with their members' best interests in mind.
About Author:
Mark Sievewright is the Founder & CEO of Sievewright & Associates, an SRM Company, and is sought after for his strategic advice and digital transformation consulting by credit unions across North America.