Keeping up with technology innovation is like playing a game of “connect the dots.” The challenge: The dots keep popping up in unpredictable places. The key to winning this game is anticipating where the next dot will appear.
It’s nearly impossible to predict technological innovation because there are so many moving parts. Today’s technology innovators involve mobile solutions, virtualization, cloud computing, security, “everything as a service” applications, and business intelligence.
To prepare for the “next big thing” and position your credit union to take advantage of innovation, industry leaders and vendors recommend these six steps:
1. Go mobile. Since it has quickly become an expected service, offer mobile banking while monitoring mobile payment solutions, such as the use of near field communication (NFC). NFC enables contactless payments via a payment chip in the users’ mobile phones.
“It’s not too late to be early in mobile banking, but it’s getting there,” says Payton Dobbs, Google’s director of industry, banking, and lending.
2. Look for geolocation opportunities. Credit unions might soon be able to make personalized offers to members who carry smartphones enabled with geolocation software. It could be possible, for example, to send a vehicle loan pre-approval message to members who linger at or near auto dealerships.
3. Deliver personal financial management tools to help consumers quickly review their financial status and plan for the future. Offering these tools builds loyalty.
4. Match offers to members’ personal information. Members need products and services that are relevant, given their current circumstances.
5. Consider person-to-person payments. Consumers who’ve adopted electronic payments want to use electronic methods to pay other individuals, not only businesses.
6. Monitor creative combinations. Tools such as speech recognition and geolocation enable members to use PCs or “post-PC” devices in a variety of locations for a variety of purposes.
Remote deposit capture (RDC) is one example of how quickly innovations occur, says Harry Gunsallus, senior vice president of technology and operations for $3.5 billion asset Redstone Federal Credit Union, Huntsville, Ala. The credit union began by looking at both desktop and mobile RDC, but soon decided consumers’ rapid adoption of mobile made a desktop solution unnecessary.
In its first six months following its December 2011 launch, the credit union’s mobile-only RDC solution processed more than $420 million in deposits, with no losses.
The trends are here and gone so quickly that you really have to be sensitive to market timing, Gunsallus says. “We’ll never do a two-year project again. It has to be six months, and less if possible.”
Redstone Federal’s next innovation will combine products and data to make it possible to assist members experiencing significant life events—job loss, retirement, divorce, or home destruction by fire or natural disaster.
“That’s what technology innovation will allow our credit union to do—to provide compelling and relevant offers to the individual member at that moment,” Gunsallus says. “That moment requires technology innovation on the back end to make it fast, easy, and convenient.”
Mobile RDC allows members to use smartphones to deposit checks when they’re away from home, which might mean traveling the world on business or moving to another state to attend college. The strength of the relationship fostered by RDC creates a “barrier of entry” to competitors who want your members’ business.
This illustrates how keeping up with technology innovation is essential to meeting the needs of members, fending off competitors, and sustaining efficient operations, says Gunsallus. “Ultimately, we believe technology innovation is the key to creating relevant and compelling offerings for our members.”
In addition to its RDC initiative, the credit union updated its technology infrastructure through:
► Selecting a new core processor in October 2009;
► Virtualizing its servers in 2010; and
► Virtualizing its desktop infrastructure this year.
These improvements positioned Redstone Federal to develop and share applications for process improvements and operational efficiency with other financial institutions.
Equally important, Gunsallus says the credit union is pursuing technology innovations that change the way members think about their credit union, while creating barriers to the growing number of competitors that try to lure members away.