Once again, Symitar has issued a set of trends for the coming year.
We’ve identified five areas of focus for credit unions:
More credit unions will advance artificial intelligence (AI) from the consideration and planning stage to deployment.
Engaging with members in a more impactful way might lead this effort as a revenue driver. Fraud prevention will lead the way from a cost savings perspective.
AI-powered, voice-enabled virtual assistants (bots) will become more prevalent in automating member service-related functions. This is a response to the rise of conversational commerce as well as a more personal shift to digital banking.
Collaboration within various consortia and networks will drive more use cases for distributed ledger technology via continued experimentation of permissioned blockchain proofs of concept.
2. Culture shifts
Credit unions will embrace more fintech partnerships to speed new product development and differentiate digital services. The industry will see strong traction with fintechs focused on small business lending and AI technologies.
Internal processes and organizational design will be restructured to formalize cultures of innovation and intelligence.
We will see more specialty positions such as “chief innovation officers” and data scientists in an effort to become more agile and competitive.
The call to outsource core functions is more about dedicating resources to focus on emerging critical trends: data management, business analytics, faster payments, business growth via digital channels, commercial lending and deposit growth, and reducing fraud.
3. Channel strategy
Credit unions will launch elevated versions of digital banking to offer more complete, integrated solutions that give members a comprehensive branch experience on their phone.
Branch transformation, defined as an evolving blend of digital and branch banking, will improve branch return on investment and efficiency ratios.
Online account opening and loan origination for consumers is table stakes, but more momentum should build around ensuring the same convenience is extended to business accounts.
CECL (Current Expected Credit Loss) compliance processes should be in place by early 2018. Credit unions that do not prepare in 2018 will face challenges when changes officially go into effect.
Credit unions will aim to grow small business loan balances and diversify their loan portfolio in response to the NCUA relaxing regulations.
Look for increased usage of non-bureau data in credit decisions. Estimating cash flow and other details will be less reliant on guesswork.
5. Risk and security
The cloud will be more unanimously reputed as a safer, more cost effective network option as credit unions watch the cloud computing business growth at Amazon, Google, and Microsoft, and see large companies like Coca Cola and the CIA move their network and security management to the cloud.
Voice and biometric authentication tools will supplement fingerprint ID as multi-layered authentication.
Cyber resiliency strategies and breach protocols will be further fortified to include investments in new fraud prevention solutions.
TED BILKE is president/CEO of Symitar.