If the nation’s more than 5,000 credit unions (CUs) wish to stay competitive, Chuck Fagan, president and CEO of PSCU, said the move to digital-first banking and innovation must be fast-tracked. Though memberships at CUs continue to grow, they are facing fierce competition from challenger and traditional banks.
In few areas is this digital-first struggle more evident than in the identity management space. One recent survey found that only 17 percent of CUs verify their members’ identities using a single digital process that operates in real time. Credit unions will have to move fast to incorporate digital tools and features that can streamline the banking experience and satisfy their members.
The July edition of the Credit Union Tracker® examines the most recent developments in the credit union space, including how CUs are working to catch up on digital innovations and pressing security needs.
USALLIANCE Financial announced a partnership with payments player FIS to help modernize its digital credit and debit card products. The move will enable the credit union to aggregate its card processing to a single platform through the use of FIS’ application programming interfaces (APIs). Connecting to APIs will also allow the CU to connect more seamlessly with third-party FinTechs and other financial players, enabling their consumers to see their accounts in one place more easily. The move is critical to allow the New York-based CU to compete as banking becomes more digital, according to Kevin Randall, the CU’s executive vice president.
Despite the surge in digital banking, members do not want branches to disappear completely. Studies show that online banking users still want to have access to branches when needed. Eighty-five percent of the transactions made by Spokane, Washington-based Numerica Credit Union occur digitally, for example. But the CU also reported a resurgence in-branch visits since the steep decline caused by the pandemic, an 80 percent return rate of in-branch member transactions since then. Digital-first consumers thus do not appear ready to give up branches in their entirety. As a result, CUs must find features that allow for a seamless experience in both channels.
New York-based Summit Federal CU has launched a virtual-only branch for its members. It allows customers to connect to CU employees via video chat. The aim is to provide consumers with the same feeling and comfort they might find when banking in-branch within a virtual setting. Members can access a range of financial services inside this virtual channel as they would when visiting physical locations. Other CUs are experimenting with different ways to merge digital and branch-based banking.
For more on these and other credit union news items, download this month’s Tracker.
Digital Federal Credit Union On Innovating To Meet Members’ Digital Expectations
PYMNTS’ recent Credit Union Innovation Study, a PSCU collaboration, showed that CUs have some reasons to celebrate, with 80 percent of U.S. consumers now saying that their CUs innovate either “somewhat” or “very” well. Barriers to innovation remain, however, as most CU decision-makers believe they lack the data analytics and core operating systems needed to create the personalized, relevant bank products their members want. In this month’s Feature Story, Gregg Stephens, Digital Federal Credit Union’s fraud and Bank Secrecy Act manager, discusses how the Massachusetts-based CU is working to overcome these barriers by assisting members where they are and prioritizing seamless digital innovations as well as securing members’ data.
The year began with 2 percent fewer credit unions compared to 2020. But federally insured CUs added more than 4 million members during that period. This month’s Deep Dive examines how fewer CUs and the rising number of consumers seeking membership present an opportunity. But if they are to be successful, innovation and digital capabilities are key. Consumers want a financial concierge that offers personalized strategies to boost savings, instant text fraud alerts, seamless micro investments and frictionless peer-to-peer payments, to name a few.
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