SALT LAKE CITY (4/7/16)--Consider this: Facebook is a $236 billion company, and it offers no original content. The rental website AirBnB is capitalized at $10 billion and doesn’t own an inch of real estate. Uber is worth $40 billion and doesn’t own a single vehicle.
What these firms specialize in is user experience, and that is among the future strategic considerations credit unions should prioritize, said Tom Davis, senior vice president of Card Services for Credit Unions. Davis spoke Wednesday during the first day of the 2016 Credit Union National Association Payments Roundtable in Salt Lake City.
For credit unions, that user experience right now translates to mobile banking. As many as one in four mobile banking users log into their mobile banking applications every day, according to Federal Reserve statistics Davis cited, making the credit union user experience a daily event for many members.
“There are no new cars being manufactured because of Uber; there’s just new people riding in them,” Davis said. “No new real estate was sold because of AirBnB. The same people that were renting them are renting them now. But AirBnB’s interface is slicker, it’s cooler, it works better. That’s the way your credit union has to think.”
Davis also surveyed the digital wallet landscape. He said new digital wallets will be introduced to compete with Apple Pay, Android Pay and Samsung Pay. Eventually, the fractured digital wallet market will begin standardize, he said. “Sooner or all these wallets will be very much the same,” Davis said.
In the meantime, credit unions should offer as many versions as their processor will support to meet member expectations, he said.
“You have to remember why you are in this game,” Davis said. “It’s not to make money; it’s to stay relevant.”
He cited Forrester statistics that predict mobile payments will top $142 billion in 2019.
Davis also said credit unions should prepare for the eventual extinction of plastic cards. “That’s the day we’re trying to get to,” Davis said. “Plastic is expensive.
They can be stolen. They can be counterfeited. I can lose my wallet and my cards are gone. There are just so many problems with plastic and soon we will have other options.