Ask Allan Brown – a VP and GM, Digital Community Markets at Finastra – what keeps him up at night and his answer is simple: it’s trying to stay on top of the digital revolution that is transforming credit unions and community banks. Brown also is very optimistic. His belief: community institutions that partner with the right fintechs can not only keep pace with the big banks digitally, they very well may be able to beat them at this game.
Along the way Brown discusses mega trends that are changing how financial services are delivered and two key trends, he says, are real time banking (it’s coming!) and much shrewder use of data to deliver better and smarter services to consumers.
“The future of financial services is going to be phenomenal,” says Brown.
Now explain this to me: I am a member of two credit unions, 2300 miles apart, both with assets over $1 billion – and yet they have the identical mobile banking app. Oh, sure, the branding window dressing differs – that is, the names and similar. But the actual guts of the app, what they in fact do, are identical. Not kind of similar. Identical.
How can that be considered thoughtful branding, 2019 style?
And how many credit unions are on mobile apps that literally 4000 other credit unions have?
Which is where this explosive report from card issuer Marqeta blows the doors off oldstyle thinking. According to it, Propeller Insights surveyed more than 2000 US and UK adults for Marqeta and the giant conclusion: the front door to a financial institution is an app not a branch.
Reported Marqeta: “One of the most striking results of the survey is how much more greatly people value the digital banking experience over the physical equivalent: 62% of Americans already do the majority of their banking online, compared to just 31% of Americans who say they primarily bank in person.”
Marqeta added: “When asked about how they would feel if every physical bank branch was closed down tomorrow, only one-third of US consumers (33 percent) and one quarter of UK consumers (23 percent) said they would be inconvenienced by this.”
Look through a random sampling of credit union trade publications and count the stories about branch remodels – you’ll see lots. Why? Is this even an issue anymore?
What are you doing to make your app distinctive? Unique? How many stories have you seen about that?
None, right.
Can you in fact do anything at all or is an app shoved down your institutional throat by a vendor and you can take it or leave it?
Hold that thought.
Chew on this Marqeta finding: “69% of Americans expect to use their mobile banking app regularly in the next three months, while just 30% expect to visit a physical bank branch.”
Personally I do not plan to visit a branch and in fact the only times I set foot in a branch is when I am wearing my reporter hat and want to experience a branch first hand or when something has gone terribly wrong with my account and I am in the branch to shake things up.
Incidentally, Marqeta data say that fixing errors no longer is that compelling a reason for visiting a branch: “The physical branch didn’t even factor as important to consumers when they imagined having to fix an error that their bank had made: 28 percent of UK consumers and 23 percent of US consumers said it was important for them to be able to visit a bank in person to fix a problem, while 54 percent of US consumers and 51 percent of UK consumers said it was simply more important that it was fixed quickly, through whatever channel necessary.”
For 99% of us, 99% of the time there is no good reason to set foot in a branch. Ever.
I urge you to open an account with Chase or Capital One or USAA. Feast on their mobile apps and ask yourself, is ours as good?
Spoiler alert: it isn’t.
Marqeta goes on to warn about the threat posed by digital only banks – sometimes called challenger banks – but I don’t see much threat there. Not to credit unions.
But I see enormous threats from the mega banks with IT budgets bigger than the GDP of mid sized countries and when they go out to hire developers they look for people with strong consumer app experience, that is, people good at writing code that engages people and creates a fun experience.
Has anybody, other than the salesman who sold you your mobile app, ever described it as fun or engaging?
What can you do to make your mobile app your app?
Sure. I know a handful of very big credit unions – think over $5 billion – have custom mobile banking apps.
Good for them but what can the vast majority of credit unions, with much less resources, do to compete in today’s digital world?
That has become the critical question and it’s now a matter of life and death.
Forget the branch, it’s the app that matters – CUInsight http://bit.ly/37ehUa4
Name the single most important IT system in your credit union.
Spoiler alert: it’s not your core. Not anymore.
Who says that? Mike Hatch, a VP and national sales manager at Finastra, and a core expert. Hatch knows the core is crucial but he also believes that it’s the institution’s digital orientation that will shape its future.
Core is part of that.
But it is not the end all.
Another question: is your core system holding your institution back? Can you easily – and inexpensively – integrate cool fintech technology into your core?
Say no and you are telling the truth.
But it’s the wrong answer. You want an open core that lets you deliver the tech your members want.
Credit unions are looking for ways to be different, says Hatch. An open core helps there.
Think cores are boring? You won’t think this podcast is boring – and you just may find yourself wondering if now is the time to initiate a core conversion.
Scary? You bet. But going out of business is scarier.
Can cybersecurity be used as a marketing tool by a credit union?
Can a banker in fact become a credit union executive?
For answers, listen to this podcast with Daniel Ford, CIO at Jovia, a $3+ billion credit union on Long Island that you probably know as NEFCU. The rebranding occurred a month ago.
Ford joined NEFCU via First Source Bank in South Bend (IN), where he was the chief information officer, responsible for infrastructure, cybersecurity, and application development. We asked him bluntly: can a banker in fact fit into a credit union’s philosophy? You can guess his answer but give it a full listen. He makes points to remember.
Ford also talks, at length, about what a CIO needs to do to stay on top of cybersecurity and also how to work with vendors.
As for using cybersecurity as a marketing tool, don’t be too quick to say no way. Ford offers a tactic that just might work. Of course you want to hear that.
Will your superior teller experiences guarantee your future?
Believe that and – probably – you won’t want to hear this podcast on the rise of the digital first member. That member may occasionally step into a branch but usually they are unhappy. They would rather interact online.
And their numbers are growing.
Smart institutions know this. A Chase – in its heart – is now a technology company. Are you?
In this podcast, Jeff Bender – vice president, digital solutions at Diebold Nixdorf – tells about the future of banking as he sees it. And he sees a lot of digital.
Word of advice: bet now on cardless ATM access. That, says Bender, is the next must offer.
Bender also warns about offering a generic, off the peg digital experience. Do all your competitors offer the same mobile banking app as you? Think again if that’s true. “Find ways to personalize, to differentiate,” says Bender.
And keep thinking digitally. It is the future and it is now.
This is the banking version of the Tolkien quest for the one ring that rules them all.
Call this open banking and remember that phrase. It’s about to get much buzzier and louder over the next year as open banking transforms how US financial institutions interact.
Scott Anderson, brand evangelist at Diebold Nixdorf, sat down at the company’s DN Intersect event to tell us why open banking – a big issue in Europe – is heading your way.
Imagine one site where your member sees everything financial. Inside the credit union and outside. Imagine a site where the consumer can decide what to use to pay for this purchase in this moment.
How cool is that?
It’s also potentially frightening to financial institutions. The institution ceases to be a walled garden and becomes instead an open transit point. Won’t consumers flee?
Why should they? If their needs are getting served.
In many ways Anderson is optimistic about the impacts of open banking – which definitely is coming our way – on smaller FIs such as credit unions.
One hitch however. How do credit unions get enough data to play meaningfully in this universe? Anderson sees credit unions working in alliances with fintechs – CUSOs perhaps – to create an even playing field with big banks when it comes to open banking.
Just maybe it’s the biggest FIs that have the most to lose in an open banking universe.
Richard Crone is a longtime payments geek and when it comes to Libra, he has a particular spin. It boils down to this: forget the talk about crypto currency. Libra fundamentally is a pre-paid account and because it is a Facebook effort, it has reach into some 2.1 billion daily users of Facebook tools (Facebook, Instagram, WhatsApp, Messenger, etc.).
“It’s a prepaid network with global reach – there are also 90 million businesses on Facebook properties,” said Crone.
His blunt message: every credit union needs a Libra strategy and you need it now.
Understand this: Facebook may not be looking to profit off Libra per se. Its strategy seems instead to be to use Libra to drive traffic to Facebook sites and thereby increase advertising revenues.
Which may make Libra yet more attractive to financial institutions.
The conversation includes Heidi Liebenguth, managing partner at Crone Consulting, and it took place in a public space at Caesars Palace, where Crone and Liebenguth were speakers at DN Intersect, the Diebold Nixdorf meeting. There’s minor ambient noise but audio quality of the podcast is good.
Crone finds it “bizarre” that not one FDIC insured institution joined in the launch of Libra.
He also is not deterred by the regulatory scrutiny Libra has won. In fact he sees it as a competitive advantage because it may deter competitors from plunging in with their own similar products.
Listen to this podcast and you definitely will want to dig into Libra and reach the decisions that are right for your credit union. Inaction is not a strategy.
Buckle up for big, explosive ideas. That’s what Douglas Hartung – senior director, business development & alliances at Diebold Nixdorf – specializes in and in this podcast he discusses Libra, bringing financial services to the globe’s underbanked and unbanked, and the exciting idea that just maybe all a person needs to send money anywhere on the planet is a smart phone.
How cool is that?
Know that just may be Libra’s promise.
While some scoff at the prospects of Libra – the Facebook backed new-style currency – Hartung believes that the sheer magnitude of the Facebook family of properties user base makes this a financial play that demands attention.
He also likes the idea of in-app payments – so in Facebook, for instance, what if you can without friction send $10 to a friend in Bali. With just a click. Without leaving the Facebook app.
Is Libra just another Bitcoin variant? Hartung says nope. He tells why in the podcast.
A bottomline here is: pay attention to Libra. You may regret it if you don’t.
Incidentally you will hear some taps interspersed throughout the podcast. That’s Hartung animatedly tapping on a table to emphasize his point. Get into his spirit, let the taps animate you too.
This podcast is one of a group of four recorded on site at the Diebold Nixdorf DN Intersect conference in Las Vegas, September 2019.
What are your members thinking about you? Say you don’t know and you are setting yourself up for failure. Say you do know and, no, you haven’t asked them because you, well, just know and you are on the fast track to extinction.
If you want to know what your members think and need, ask them.
That’s where LiveSurvey comes in. A credit union owned CUSO – developed by MAPS Credit Union in Oregon – LiveSurvey’s mission is providing realtime, instant feedback from members that lets credit unions better chart their next actions to better serve members.
When is the last time your credit union surveyed members? How many responded? Did you get anything useful?
LiveSurvey grew out of MAPS own needs. The credit union faced the horns of a dilemma. On one side were very pricey, consultant driven survey products. On the other side, there are inexpensive – even free – Internet tools. Neither gave MAPS the solution it wanted and out of that grew LiveSurvey.
About 25 credit unions now use LiveSurvey which gives them the ability to query members as they wish and on whatever topic they choose.
Prices range from $500 to $1000 monthly.
Who better to help you take the next steps to grow your credit union than existing members – who when asked right will tell you what they like and what they don’t.
MAPS make it easy and inexpensive to know.
Every credit union needs to be doing this or similar. It’s a competitive world out there and this is crucial intel. And it’s yours to gather if you just ask for it.
LiveSurvey CEO David Deckelmann tells all abut it in this brisk podcast.
Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.
Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto
