As the sector is experiencing a growth in membership, credit unions have the opportunity to use member data to understand and satisfy their financial advising needs through mobile and online payments.
Last month around 1,800 delegates from 48 countries met in Australia to discuss the various challenges and opportunities faced by the sector. They examined issues such as youth membership, technology, leadership and credit union advocacy.
One of the keynote speakers at the event, technology expert and adviser, Lee Wetherington, told the conference that credit unions had the advantage of having access to their 200 million members’ data, unlike any other institution.
Mr Wetherington, director of strategic insights at ProfitStars in the United States, said: “The future is more about data than it is about payments. Using credit unions’ data, we will be able to help our members decide whether, when and where it makes sense to buy the stuff they want in real time, with integrity. None of the other market disruptors are in a position to do that.”
Also speaking at the event, president and chief executive of the World Council of Credit Unions (WOCCU), Brian Branch, highlighted some of the challenges faces by the sector. “Young adults today have many more financial services options available to them, and they are willing to pay more for convenience. Convenience will be king. Our challenge is how to serve this market profitably by looking at our channels and addressing whether the products and services we offer respond to their demands,” he said.
Mr Branch added that credit unions should offer financial services specifically designed for young adults’ life transactions. He explained that young adults were also more likely to take loans. “For online and mobile channels to be successful, they must be easy, take only a few minutes and fall within regulatory requirements. If young consumers have to go to a branch in order to complete the process in person, we lose them,” he told delegates.
In a separate panel discussion credit unions delegates also engaged with non-traditional market entrants from Australia, Canada and the United States, who gave them an outsiders’ perspective on the future of credit unions. They encouraged credit unions to collaborate among themselves and even with competitors.
“This is an existential moment for credit unions … to redefine your basic product and core value proposition,” said Alex Sion, president of Moven, a mobile banking service in the United States. He believes credit unions are better positioned than banks to gain members’ trust because trust is built into the model.
“Credit unions must ask themselves what … family and community mean in this digital era. The future of the model is to maintain the community aspect, but disrupt the physical distribution model,” he added. “Credit unions will have to juice up their value proposition, combine to survive, or transform how they distribute products to customers. It would be a sad world if credit unions don’t win. We’ll lose that community and authenticity.”
Some panellists also argued that the best practice model could be achieved through shared platforms among different credit unions. Amy ter Haar, chief legal officer at Flow Inc, also participated in the panel discussion. Flow is a reward-based marketplace, driven by social networks and powered by secure e-payment solutions.
She said: “We need to get connected if we want to [financially] include everyone, everywhere. It’s not us versus the banks. It’s lateral and peer-to-peer. We are stronger together.”