How credit unions fit into the digital marketplace
Most credit unions have a heartwarming story about putting cash into the communal cigar box. That mental image is great, and it resonates with people who want to be community-focused. But how many people under the age of 35 remember the last time they paid for something with cash?
We’re living in a world where finance is dominated by technology. And, as more and more of your members’ financial lives are becoming increasingly technology-dependent, it arguably falls on the credit union as a whole to become more pro-technology. There’s really no other way to survive in a digital marketplace.
A blessing, or a curse?
The answer depends on who you ask, and it seems to change with every new technology. Technology continues to improve at a breakneck pace and changes the way we live almost as quickly. And reluctance to adapt and adopt new tech can be a huge barrier. At the same time, you have to make good strategic choices instead of chasing every shiny new technology that comes along.
Take Meta (nee Facebook) for example. Whatever you think of their still-WIP “Metaverse,” just the idea of an augmented reality/virtual reality, completely digital marketplace should be on every credit union’s radar. It might sound kind of sci-fi, but this wouldn’t be the first time they’ve changed our digital landscape.
So many transactions happen online that it’s not really a stretch to say we already already have thriving digital marketplaces, lots of them. And as the average member age (and board member age) climbs ever higher, we need to ask ourselves a rather pointed question:
Does my CU really understand what their members are getting up to online?
Fortunately, there are some things you can do to connect with your members and understand more about their digital lives. From there, you can start to find a way forward for your credit union in the new, tech-centric frontier.
To integrate, or not to integrate…
That’s the big, difficult-to-answer question. On one hand it does make sense to wait, since the life cycle of new tech can be incredibly quick. By the time you get everything set up properly, the public could very well be onto the next big idea.
On the other hand, waiting too long might mean you might get left behind. In a world of P2P payments, contactless transactions, artificial intelligence and blockchain technology, it’s hard to find the right balance between up-to-the-minute and old-fashioned.
I’d love to say you just need this software and that app… Unfortunately, the right mix of integrations and services is going to be different for every credit union. There’s no tried-and-true template to use, which means you really shouldn’t be trying to guess what your members actually want.
Make member preference a priority
As we’ve already established, there’s not much point in doing all the work to integrate a new app or service if none of your members are using it. Nobody has the time and resources to chase every new tech trend, so how do credit unions decide what tech will help them stay relevant in today’s, and tomorrow’s, financial reality?
The answer might just be… (*gasp!*) asking your members what products, services and features they currently use, or would be interested in using.
And, of course, you have a wealth of data to tell you what your members are already doing and spot trends. For example, how is money flowing in and out via P2P payment systems like Zelle, PayPal, Venmo, etc? How much traction do Apple, Target, or airline cards have with your members?
You might be surprised by what you learn in the process. There are countless ways in which people can spend their money online, and a shocking amount of money that can be spent on entirely digital goods. Understanding how people spend their money online makes you realize that the Metaverse is not such a far-fetched idea.
Once you’ve seen how your members are using their money online, you should start seeing some ways in which your credit union can help. For one thing, some of your members might benefit from some financial education on safe, digital spending practices. I’ll even give you that idea for free. Or maybe a Digital Life Account that makes digital money easier and safer?
Adopt (and keep) a tech-positive attitude
The good news is that people of all ages love what credit unions do. Everything a credit union stands for aligns with the values and worldview of younger generations in particular. This hasn’t changed with the advent of the digital marketplace.
No single financial institution will be able to provide every possible service available from the medley of apps out there. It is, most likely, a better use of your time and resources to stay flexible and third-party-friendly.
Your credit union’s attitude toward technology will affect its appeal to new members. But it’s also important to stick to and demonstrate those timeless credit union values no matter the technology of the moment may be.
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