The trend toward greater sophistication in analyzing data with business intelligence tools is helping $1.1 billion asset Oregon Community Credit Union, in Eugene, develop products and services that provide a competitive advantage.
You have to be nimble to acquire, manage, interpret, and leverage data—and to do it quickly, says Ron Neumann, chief financial officer.
Oregon Community’s member data research revealed that all demographic groups are confounding expectations with rapid adoption of mobile banking and other tools. “It isn’t only Gen X and Gen Y that want these improvements and technologies,” says Neumann.
Mobile banking, for example, was introduced in February 2012 with an expectation of attracting 2,500 users from among the credit union’s 104,000 members by May 2012. The credit union’s rapid rate of adoption, however, has it on track to have 10,000 users by year-end.
The pace of technology adoption, says Neumann, adds a sense of urgency to monitoring trends and introducing products. Behind the scenes, Oregon Community has virtualized its servers and made infrastructure improvements to enhance security and efficiency so it can adopt new technology quickly. Many technologies have a short life, he says, sometimes three years or less.
“No sooner are these technologies the leaders of the present than they become the laggards of the future and are replaced by other solutions,” Neumann says.
On-demand applications and cloud computing for processing, communications, and security help speed delivery and strengthen operations.
“The cloud is driving the ways information and technology are being consumed, and changing the way people work,” says Andrew Jaquith, chief technology officer for Perimeter E-Security.
Some credit unions have moved their email to cloud providers rather than upgrading in-house software, he says, while others are using cloud providers to host mobile applications.
Cloud integration will allow single-provider, one-platform solutions to support all enterprise security needs, Jaquith says. That approach can help credit unions take control of networks, while eliminating the infrastructure and staff required by a traditional in-house approach.
But some authorities remain doubtful the cloud is ready for widespread adoption. The Federal Financial Institutions Examination Council (FFIEC) advised credit unions and other financial institutions in July that using outsourced cloud computing providers carries legal, regulatory, and reputational risks. Oregon Community is among the financial institutions that refrain from using cloud applications due to security concerns.
Mobile devices such as smartphones and tablets are changing the way consumers interact, particularly young consumers. Nearly three-fourths of Internet-capable devices sold are expected to fall into the “post-PC” category by 2015, notes Jaquith.
“These devices will continue to play an increasingly larger role in customer service and engagement,” he says.
Credit unions must think strategically about how smartphones and other devices fit into their priorities, according to Joerg Engelhardt, vice president, financial industry marketing for Diebold.
Adopting products and solutions that enhance your credit union’s connectedness with its members will enhance its competitiveness, Engelhardt says. Diebold seeks to find innovative ways to apply proven technologies to increase operational efficiency and improve consumer experiences.
Diebold’s 4G LTE-enabled ATM was the first in the world to utilize 4G technology.
“A 4G-LTE connected ATM, for instance,” Engelhardt says, “takes the successful mobile communication network popularized by mobile phone providers and applies it to the financial services sector to allow advanced functionalities on the self-service channel, such as two-way video interaction at the ATM.” Virtualized ATMs replace ATMs’ onboard computers with links to a centralized computing resource.
Personal financial management tools are evolving to help members who use online banking do a better job of managing and moving their money, says Albert Ko, vice president, product management, at Intuit Financial Services.
Intuit is upgrading its platform to allow greater flexibility and accessibility to credit unions and third-party developers, he says. The upgrade also will allow Intuit to combine data from financial institutions and its 60 million customers to deliver insights to help the “little guy” save or make money and gain new ideas.
“It’s not about delivering the newest or shiniest widget, but about truly solving important customer problems so well that they don’t go back to their previous way of doing things,” Ko says.
Intuit research revealed that consumers who access their financial information via a computer, mobile phone, and tablet average 31 interactions per month—compared with 18 interactions per month for consumers using a computer and a mobile phone, and 10 interactions per month for consumers using a computer, alone.
Credit unions can empower members with simple, effective mobile payment and money management products, adds Jim Merrill, senior vice president of sales, at Fynanz. This boosts member engagement and retention.
If credit unions fall behind and don’t deliver these products, they might lose member loyalty to banks that offer the technology sooner, Merrill says. Life cycle lending will be essential in the years ahead, he adds.
He recommends using student loans as a gateway for college-age borrowers, and private student loan consolidations for young, working members.