Jump in the member experience mania! It’s credit unions’ duty by charter, and it’s good business. Your long-term, strategic planning likely has something along the lines of enhancing member service with the use of technology. And that’s good because Finalytics.ai’s 2023 CU Digital Experience Report found that 76.2% of member and prospect engagements with credit unions occur online.
The tricky part of digital transformation is knowing what steps to take when, and that could be different for every credit union. Think through what you’re trying to achieve first. This should be solving real-world problems for your members, and by extension, your credit union.
Getting Credit Unions’ Houses in Order
Sometimes, it’s problems members don’t even know exist. A member might be frustrated that it’s taking so long to get a loan approved, but they don’t know nor care all the manual steps your lending team has to perform in the background (which they don’t like either). The member just needs access to those funds and your credit union needs to get loans out the door. Launching some flashy app is not going to make this problem go away until your internal house is in order.
So, let’s dig a little deeper. How can your credit union automate some of those tedious steps, like ensuring all the fields are filled in an application or making sure something like a mortgage is filed with the proper authorities? Members may not see the behind-the-scenes tech, but they’ll appreciate it! While generative AI has stolen the stage in 2023, artificial intelligence can still do some mighty heavy lifting for credit unions’ back offices.
The same goes for account opening. According to The Financial Brand, 57% of checking accounts opened in the US over a 12-month period were opened on mobile devices. Yet, 25% of financial institutions are experiencing application abandonment rates of more than 50%! Reasons included overly complex and lengthy processes, requirement still to come into a physical facility and just plain asking for too much information. If adding more members efficiently is on your credit union’s list of strategic objectives, this could be a place to start streamlining and updating.
But even that won’t matter if they don’t trust that their data will be kept secure. Cybersecurity is critical for every organization that handles sensitive member data. Your credit union’s leadership is where the buck stops for cybersecurity, even when a third party’s technology fails or is breached. Performing strict due diligence on your credit unions’ business partners is crucial to building and maintaining trust.
Investing in the right tools to ensure data security can save your credit union big bucks. The average cost of a data breach was $4.45 million, a whopping 15% increase over the last three years, IBM reported. Naturally, 51% of organizations plan to increase their cybersecurity spending. Top spending in financial services went to security AI, automation and incident response, according to Security Intelligence, but the good news was those that made “extensive use” of these three elements saved an average of $850,000 versus the average data breach.
Credit unions can’t do it all, so partnerships are critical to their operations. Noted banking researcher from Cornerstone Advisors, Ron Shevlin, wrote in a 2023 Forbes article that APIs were growing in importance because of their ability to provide fast secure connections to their business partners. Credit unions, in particular, were ahead of the pack with more than 60% of credit unions using APIs and another 18% planning to in 2023; meanwhile only 40% of banks were using APIs with 28% planning to.
You know what can help make all of these priorities easier and better? The cloud.
Conquering the Core
The cloud offers access from anywhere, faster processing speeds, faster backups for quicker disaster recovery, powerful data management and easy-to-use API ecosystem, more accessible data analytics for gathering insights to improve member experience, flexibility to scale up or down as needed. That’s why Prodigy was built as one of the very few cloud-based cores on the market today with the most modern coding out there.
In a 2022 Finalytics.ai study, 86% of credit union leaders agreed their competitive strategy depending upon digital technologies. The same research also found that credit unions “disagreed or strongly disagreed that their level of member focus promoted digital maturity.”
If your credit union is looking for a cloud technology partner focused on your success through serving your members in the way they want to be served, learn more about Prodigy’s cloud-based core and cloud infrastructure offerings today!
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