Twenty years ago, just 50,000 people owned mobile phones, and they were the size of walkie-talkies.
Ten years ago, social media essentially didn’t exist. And the manic adoption rates of tablet computers make it easy to forget Apple introduced the iPad just four years ago.
When Mark Sievewright surveys the technological advances of the last 20 years and then turns his focus forward, he needs just one word to summarize what will change in the next decade: “Everything.”
“I really believe we’re going to see a profound change in the way credit unions do business, and it’s going to be enabled by technology,” says Sievewright, president of Fiserv's credit union division. He addressed the joint CUNA Technology/Operations, Sales, and Service Council Conference Monday in Las Vegas.
“The next 10 years are going to make the last 10 years look trivial,” he adds. “The speed of change will be profound.”
Three epicenters of activity will redefine the credit union model, according to Sievewright:
• Channels: Credit unions must fully develop self-service digital channels to complement the service they should continue to offer at their branches.
“The way in which your members will define their loyalty to you is by how much you let them help themselves, not by how much you help them,” Sievewright says.
Notably, despite many predictions otherwise, the branch is far from dead, he says. Even though online interactions have skyrocketed in the last decade—especially in the mobile sector—branch activity has remained relatively consistent since the 1970s.
“I think the branch will be the cornerstone of growth,” Sievewright says. “But how we wrap the other channels around that branch is what will determine winners and losers.”
• Payments: With continual and revolutionary movement in this space, every credit union should put an employee in charge of developing and implementing payment strategies, with an eye on vigorous security of member data.
Innovations such as Amazon’s 1-Click have resonated with users, underscoring consumers’ demand for ease and efficiency, Sievewright notes.
He advises integrating social media into omnichannel initiatives, and watching developments like Apple Pay, and exploring the possibilities of wearable technology and biometrics.
“That’s the next evolution of payments,” he says.
Also, although he’s a proponent of the new EMV (EuroPay, MasterCard, and Visa) chip cards, Sievewright cautions that credit unions introducing them in advance of the Oct. 1, 2015, liability transfer date should brace for four times as much drain on their call center and operations staff as they’d anticipate—based on his experiences overseeing their rollout two decades ago in Europe.
“I’ve never seen a country or institution get this right, in terms of consumer disruption this causes,” he says.
• Big data: Predictive analytics can make your organization more efficient operationally but also increase revenue by better targeting likely customers.
“Why guess when you can know?” Sievewright asks.
He points to a Scandinavian financial institution that uses the mobile channel to send personal loan offers to prequalified recipients. Not only is the conversion rate high, within the app the borrower can commit using biometrics, and with one more click start loan processing.
For all the challenges he envisions in the next decade, Sievewright remains optimistic about credit unions.
“You are incredibly well-placed to seize the moment,” he said. “You can seize the hearts and minds of young people. You have access to the technology you need to grow your business. And you have the passion, the power of the credit union philosophy.”