DENVER (7/14/15)--Credit unions should pay attention to the clock, because change happens--and it happens fast, Patrick McElhenie, director of product management for CUNA Mutual Group, told an America’s Credit Union Conference and World Council of Credit Unions Conference breakout session Monday.
“In financial services, many players on the periphery are trying to compete in the core product areas of savings, lending, investments, insurance, and payments. Credit unions must distinguish between what’s a sustaining technology versus those that are truly disruptive,” McElhenie warned attendees.
McElhenie co-presented with Karim Habib, director of lending for CUNA Mutual Group. The session, called “Disruption: Lessons of How your Credit Union Can Win Your Members’ Loans,” shared many examples of innovations that have shaken other industries, such as GPS devices being replaced by smartphones, and digital technology replacing traditional camera film in just a few years.
As investment in financial innovation and technology heightens, the pair emphasized, credit unions need to be aware of disruptive competitors in their own field who are seeking to pilfer business using alternative business models. For example, new lending business entrants Lending Club and Kabbage are taking innovative approaches to peer-to-peer and small business lending, they noted.
“Online access has revved up the speed with which companies can connect with customer and service niche markets,” said Habib. “The online direct lending and peer-to-peer finance communities have turned lending from a manual process into an automated and efficient exchange.”
To help prepare credit unions to win the battle for members’ loans, McElhenie and Habib identified some of the defensive and offensive strategies credit unions can employ:
McElhenie and Habib concluded by urging credit union boards and management to “ask the hard questions,” such as:
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