If only we had a crystal ball that would allow us to know what the financial services industry will look like 13 years from now.
Credit unions are expected to see unprecedented growth due to their charter of supporting community and social good, which will resonate well with future generations.
What we do know is members of the younger generation have spent their entire lives immersed in the world of digital technology, which will be key to how they view financial services.
Digital has shaped their identity and helped create their social, political, and cultural attitudes. It has also shaped their expectations for products and services.
This perspective, and getting to know who they are as consumers, will help us develop not just the products and solutions over the course of the next decade, but also a strategy for how we will meet their needs.
Expectations will be high and efficiencies will be table stakes since younger generations place such a high value on time.
Personalization will be expected, and organizations will need to understand that it is about providing an engaging, immersive experience that easily offers access to solutions that are relevant to the member.
When the design no longer works or becomes dated, organizations will need to quickly respond and change designs or product features—or risk losing members. It will no longer be about a specific user experience within an app, but instead about providing a service that consolidates what a member needs in an experience as a holistic solution.
It will be about the products and solutions that meet “my” needs, and it might be through fintechs or third-party solution providers.
It might no longer be the case that everything is served up from a credit union’s app, but keeping member trust and being socially responsible will be key.
Technology is moving at a rapid pace, and we do not see this slowing down.
Technology will add value to the experience by ensuring the credit union knows each member and allows a transaction that, for example, might be declined when there is a fraud alert to be processed because the risk is low.
Technology will enable us to know a member’s location and whether to allow a transaction to go through based on that member’s specific patterns. Offers will take on a new form: At the right time and place.
Apps will go away, and many members will use an aggregated service that integrates their banking needs. Members will receive money owed to them in real time, and behind-the-scenes processing will take place immediately.
Chargebacks and fraud will decline thanks to machine learning and artificial intelligence (AI).
Loan opportunities will be provided at the right time, but even more so at the right place—perhaps at a point of sale (POS).
We will see more instances of timely payment notifications being pushed to members, with payment being enabled through a simple “reply.”
Members will be able to communicate with their credit union in many ways, perhaps through chatbots to answer questions and machine learning to automate processes.
Chatbots will also be tuned to a higher level of learning to help members and solve problems quickly.
POS services will evolve as well. Imagine being able to simply scan and purchase an item as you walk through a store, or perhaps being served a push notification to pay the amount owed when you are done shopping.
We will see friction taken out of the experience, making it easier for members.
Businesses will be able to send invoices electronically through new solutions and receive immediate payment. The invoices will automatically post to an accounting system, and all information will be digitized—and much more.
While many of these advances may occur well within the next 10 or so years, adoption will take time.
Focus on members’ needs
Member needs will be at the forefront of all this change. Members’ expectations will continue to adapt as phones evolve with biometrics, machine learning becomes common, and AI and robots become mainstream.
The Internet of Things (IoT) will bring new challenges but also more rewards as it will provide more information to manage and more ways to know the member.
For credit unions, it boils down to when members are ready for these new technologies. And make no mistake, they will tell us when they are ready.
When that point comes, credit unions must be there to ensure they are well prepared for these changes. We will continue to strive to understand members, their financial services priorities, and where technology is headed in order to support them on their financial journey.
We also have to think about to align staff for the future, as these solutions will require a new level of staff. The amount of data available in the future will provide tremendous insights provided we have the staff to create these insights and then act on the information.
How will CUs change?
The future of financial services will not just be about products and services, or about the number of branches or ATMs. It will be about banking how and where the member wants to bank while finding efficient ways to manage the overhead costs of a branch or ATM.
Millennials see branches as important to their financial wellness. Could some staff at the credit union of the future be robots? Only time will tell.
Every aspect of financial services will see disruption. We are seeing it already in solutions such as card products, authentication, lending, tools, call center support, wallets, rewards, application program interface (API) integration, and data and analytics.
We see these areas evolving along with the technologies and products that will bring new feature-rich solutions to market that members no longer just desire but also require to make their lives easier.
Today, these features might be texting, chatbots, mobile applications, and more.
Member confidence must remain high by maintaining systems that protect member information, and it will still be a priority as we move toward 2030. The IoT and biometrics will become mainstream.
We see payments evolving to real time, encompassing new system architectures to support these new payments.
Fraud and other systems will evolve using machine language and AI to create return on investments that help reduce the many systems in place to secure accounts and eliminate many disparate solutions.
This will become necessary as new threats will continue to disrupt the payments systems overall, and real-time transaction monitoring becomes mainstream.
Ensuring future success
Credit unions are an important part of our country’s fabric. Consumers will seek providers who are community-minded and socially responsible.
We see the opportunity for strong growth in membership through providing solutions and education members desire from their financial services provider.
It is important to monitor market trends to understand how financial services will change. Change has already begun whether it is in payments, lending, card products, APIs, or authentication.
We expect technology to bring new opportunities as credit unions replace older platforms to adapt to the dynamic environment. We will see fintechs bringing forth new ideas that meet member needs since they are often more nimble and can develop market-leading solutions on new technology.
PSCU’s priorities are and will remain our member-owner credit unions and their members, and we will continue to bring value through opportunities to gain knowledge and ideas from members.
The input we receive helps ensure that future visions align. PSCU continually invests in ideation and innovation to ensure we understand where the market is headed and can incorporate that knowledge into future strategies.
We intend to stay at the forefront of change, advising our credit unions so they are aware of and prepared for shifting market dynamics and new technologies.
DENISE STEVENS is senior vice president of product management at PSCU.