Tech Trends and Strategies for Credit Unions: Threat or Opportunity?

The rapid consumerization of technology is changing how credit unions do business. Social media, mobility, and cloud computing continue to explode in both personal and professional arenas, while data security and privacy concerns remain at the forefront.

The proliferation of social media has created a major impact on how we communicate. Social networks, like Google+, with almost 18 million users, and Facebook, which has a scope of some 750 million users, are changing how we talk, interact, sell, and build brands. The astounding reach social media has on marketing and sales has created new opportunities for credit unions to reach new demographics quickly and effectively. According to a Harris Poll, 78 percent of millennial internet users engage with social media, including blogs, microblogs, social networks, and photo and video sharing sites. It is a trend that should now be part of any marketing strategy.

The same can be said with regard to the mobility explosion. With millions of mobile devices sold worldwide, smartphones, tablets and iPhones are inescapable as part of a consumer-driven revolution. Mobility is also a powerful market differentiator for credit unions. According to a Nielsen survey, 20 percent of adults who regularly use mobile banking applications are under age 24—an important market segment for credit unions. In addition, both the average balance and the average net worth of the typical mobile banking user are significantly higher than those who do not engage in mobile banking.

The third technology trend that continues to increase in interest is cloud computing. Introduced into mainstream business in 2008, cloud computing delivers computing as a service rather than a product and enables the sharing of resources, software and information over a network or the internet. Today, cloud computing has experienced a major shift from infancy to a real business strategy for many companies. But as market forces push toward this strategy, the insurance industry is still questioning whether or not it is the best solution for them. With recent performance issues and continued security concerns, the industry has been slow to adopt a cloud computing strategy, especially as many insurance companies are avoiding cloud solutions that could jeopardize secure data. However, it is a technology trend that should be monitored for future opportunities in cost savings for credit unions.

Data security and privacy remain at the forefront in terms of technology trends to watch. Security breaches make frequent headlines, with new breaches reported every day. Data breaches can happen quickly and with little warning, and they have a profound effect on credit unions, including financial and membership loss, brand damage, regulatory scrutiny, and legal liability. Data breaches continue to occur within all types of organizations; however, 33 percent of all breaches come from the financial services sector. Breaches occur from both internal and external sources, and many incidents could be easily prevented with changes to a credit union’s internal controls. Unfortunately, the opportunities for breach change so frequently that it is important for credit unions to constantly monitor this technology trend.

Technology has drastically changed how credit unions manage their business. Therefore, it is important to understand what these trends are, how they impact your organization, and more importantly, how they impact member interaction.

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To learn more about how trends in technology can impact your credit union’s day-to-day operations, contact Mark Winger, vice president, information technology, CUNA Mutual Group.

 

Questions? Contact Sales & Marketing Associate Craig Reed: 206.340.4789, creed@nwcua.org.

Posted in Advocacy News, Federal.