Top 10 Credit Union Trends of 2017
It feels like 2017 went by in the blink of an eye, and it’s hard to believe we are already a third of the way through the first quarter of 2018! We have done a lot of looking back over 2017 credit union trends in order to help our clients prepare for what’s ahead in 2018 and thought we would share our insights with you, too. CU Engage has worked with over 50 credit unions this year, across the country and we have seen similar trends within all, regardless of size or geography. These are the top 10 credit union trends we feel have had the most impact in 2017.
Trend 1. Do it Yourself?
Credit Unions have a huge amount of vendor relationships, sometimes into the hundreds! Many of those contracts are coming up for review and oftentimes credit unions think “I can do this myself and save money.” Think of selling your house – if you sell it yourself, you think you will save money vs. working with a realtor, but the work that goes into getting your house “market ready” takes time and money, then you wait for buyers to come which costs you money. Sure you have control of the process – mostly – when you show the house – but you have to do all of this while you are doing your day job and in most cases, it takes longer to sell when you do it yourself which ultimately costs you more. Then when you do find a buyer, the legal process to make sure you are protected can be overwhelming! Almost all of our clients have thought about handling an RFP process on their own, but 100% of them would agree that having an outside, trusted advisor makes the process easier, faster and more profitable than trying to go at it alone. Think about utilizing an outside advisor when going through a contract or vendor evaluation, or even just a negotiation. You could be leaving millions on the table, and you may end up saving more money than you would have going at it alone.
Trend 2. Data Access and Execution are Key
Who owns your data strategy? Likely the answer is “it depends.” It may depend on the purpose of collecting the data and how you intend to leverage the data resulting in action. There were a lot of discussions this year around data – leveraging it for marketing and cross-sell/upsell opportunities, engaging with members in a new way where you “know them” vs capitalizing on it for technological efficiencies. There is no doubt that while data collection and usage was a hot topic of conversation in 2017, we believe the execution of a true data strategy with resulting returns will show up big time in 2019.
Trend 3. Focus on Integration
On average, credit unions are working with 65 different vendors – that’s a lot of different languages to speak. Instead of this siloed approach, we saw a lot of credit unions working to implement third-party system integration. This not only benefits the organization, but also the members. That’s a win/win! There is more and more pressure on vendors to leverage API’s and web services to enable tighter integration and more control at the credit union. CUFX discussions are still prevalent in vendor evaluations with most vendors defaulting to a “yes” we will write to CUFX standards, but few with actual examples of when and how it has been done to the credit union or member’s benefit.
Trend 4. Changes in the Vendor Landscape
The CO-OP acquisition of TMG, the PSCU and Symitar partnership, the changes between CSCU and FIS, the large number online and mobile banking vendors and Fin Tech’s exploding in the payments space – it was a busy year in the vendor world. With more options comes more choices and credit unions are taking advantage of the “controlled chaos” in the market, but many are scared to make a change for fear that they may make a wrong decision, or miss out on something better. The good news is that the market continues to remain competitive, and vendors are focusing on their core competencies allowing credit unions the options to select from “Best of Breed” instead of “One Size Fits All.”
Trend 5. Out with “Omnichannel” and in with “Digital Experience”
We’ve all heard the term “omnichannel” a million times – it’s one of our favorite buzz words. But let’s call it what it really is: a seamless digital experience. According to Capgemini, adoption of digital payments in on the rise with instruments such as wallets, cards, and mobile becoming mainstream. We know credit unions are working toward making a member’s experience frictionless and easy, regardless of age. This means the need for a more digital experience will only grow, so get ahead of the curve while you still can. Create member journeys to better understand the actual member experience and then focus on the areas that you can make minor tweaks with the positive outcome.
Trend 6. Rewards are More than just Transactions
Rewards have become loyalty, but members don’t want to save up a year’s worth of points to redeem a vacuum anymore. According to Aite, customers now control their own experiences, and there is no longer a one-size-fits-all loyalty scheme. Relevant messaging delivered to the right person at the right time and in the right place is the secret to successfully changing customer behavior. We are seeing credit unions decouple their loyalty solutions from their credit and debit processors. Some are building platforms themselves because they can’t find a solution that fits their needs. Think about loyalty tied to rate reductions, shorter lines in the branch, or a faster queue on the IVR in addition to rewarding for transactional behavior and more profitable relationships. Your members want personalization, a flexible loyalty solution with a member-focused strategy will deliver that.
Trend 7. The War between Visa and Mastercard
The two giant brands continue to compete, both are making investments in innovation, and give credit unions another partner to work with – but most credit unions don’t leverage that. The fight for market share and transaction volume is still strong, and credit unions can capitalize by finding the right partner that can help increase the adoption of your payment products. In some cases, we have had credit unions free up budget dollars that were supplemented by VISA and MasterCard so that the credit union could invest in the technology their members required. We can help navigate the battlefield!
Trend 8. Fintechs are your Frenemy
Yep – you read that right. According to the ACI 2017 Fintech Disruptors Report, the two biggest opportunities for fintechs are mobile and digitization, while their biggest challenge is achieving scale and reach. Coopetition with fintechs could help both parties gain major traction with the industry and its members. Keep your eye on them, seek them out at tradeshows and industry events – they are doing some exciting things that credit unions could test in a small market to see the product viability. Manage the risk with the effort and possible return and have them partner with the legacy vendors to get you and your membership what you need and want. Why not?
Trend 9. Implement a Tradeshow Strategy
We see it all the time: high-level ideas being paraded around the tradeshow circuit, but no one follows through with a plan of attack on how to accomplish these new goals. Credit union executives are yearning to learn how to make their credit union better, but very few speakers are able to adequately follow through with a plan of action. Think big and take back these new ideas and strategies, but develop a comprehensive plan that allows you to successfully get there. Ask questions, network with peers, ask for demonstrations, make sure you are using your precious time wisely when attending industry events.
Trend 10. The CIO’s Place is at the Table
The CIO is integral to long-term relevance of a credit union. As we mentioned before, members are looking for a seamless digital experience. Couple that with new regulatory initiatives, and we can see that the payments ecosystem is anything but stagnant. Innovation and technology are going to be key drivers for keeping your credit union ahead of the pack in 2018 and we are seeing more and more CIO’s driving the long-term agendas for the credit unions. However, ensuring that business and operations are aligned with the overall technology and delivery goals is key to the ultimate success.
While there are likely 10 – if not hundreds more – key topics and credit union trends that might be on your radar; these are the ones we heard or saw most last year. Looking ahead into 2018 we are already seeing trends in Digital Evaluations – getting off of legacy online banking and separate mobile systems, a focus on Analytics and accessing member data in a way that gets you to action, and IVR/call center system analysis. Keep in touch with us and give us a shout if we can help your credit union prioritize what’s on your plate this year!
About CU Engage:
CU Engage was launched to transform the process that credit unions experience when working with their technology and payment vendor decisions. Our approach is completely focused on engagement with a WIN/WIN/WIN result – for the member, credit union and vendor/partner. Our experience working for many of the major vendors in the space as well as several innovative credit unions across the country gives us tremendous insight into credit union needs and capabilities of the vendors that our credit unions work with. It allows us to provide the pricing leverage the credit union needs while helping educate and guide the credit union project team in making their decisions. If you are struggling with strategic planning, upcoming vendor contracts or just need someone to bounce a question off of, we are here for you!
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