Competitors such as traditional banks, online-only financial institutions, payment processors, merchants—even Google and Apple—all affect credit unions’ technology strategy, Barker says, citing payment processing as an example.
“Until recently, credit unions and banks dominated that market,” he says. “But now, more big players will compete for members’ transactions and the resulting interchange income.”
As players such as Apple, Google, Target, Walmart, and American Express make inroads into the payments space, credit unions will have to fight harder for interchange income and be creative in finding other sources of income, Barker says.
Plus, “if competitors offer something you don’t, such as remote deposit capture, you may have to follow suit to remain competitive,” Reh says. “If your members want that convenience, they might leave you if you don’t provide it.”
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