Why credit unions shouldn’t just copy bank tech

Customer Experience
March 15, 2019
minutes read

Credit unions are mission-driven, people-orientated organisations. Their focus is on helping people with people. It is clear in the modern era however it has become impossible for them to ignore technology. People are on technology. To help them that’s where credit unions need to be too.The temptation exists for credit unions to look at other larger Financial Services organisations and seek to do their tech like them. This, however, could be the wrong strategy for a number of reasons:

Don’t lose the human touch

When deploying technology people can become obsessed about taking humans out of the experience. It is true that unnecessary human contact can be annoying for consumers. From a cost and efficiency perspective, the attraction to providers of removing human effort from a process is obvious. Certainly, this accounts for much of a bank’s investment in technology, particularly where they are serving the markets most commonly served by the credit unions which tend to be low margin and high volume.Is that really what credit unions are about though? I don’t think so. A big part of the credit union is the human relationship between the organisation and their community.Credit unions should think about the relationship they no doubt still want to build with each member before pushing everyone into technology channels which eliminate human contact.

Don’t be a poor imitation, be different

If the goal of a technology project is to be almost as good as something else then that will come through in the experience. Nobody wants an experience that’s not quite as good as what they receive elsewhere.Technology offers limitless possibilities. Credit unions should look at ways to be different to reflect the differences in what they stand for.

Banking technology is expensive

Going head to head with the big banks on technology is a money intensive process. These organisations spend millions on their technology every year. Clearly, no one credit union has the budget to compete with this. Collaboration can provide an answer, but as bitter experience in the sector will attest, collaboration can bring challenges of its own. Nothing will stretch a technology project more to the breaking point than a lot of competing voices articulating demands and priorities. The other thing about any big technology project is that they are always harder, longer and more expensive than anyone expects! If embarking on this, expect it to hurt the wallet; probably more than you think at the start!!

Bad tech could be worse than no tech

If you don’t spend the money then the chances are the quality of the end result will reflect that. That’s a problem. In a world where technology expectations are high then you can expect bad online reviews for poor experiences. For a small organisation that can be a real issue. If you don’t have a high volume of clients, even if you fix the issues, it can take a long time to balance out those bad reviews.That isn’t the biggest problem that could arise from bad tech however. One of the major reasons banking technology can be so expensive is security. If you’ve skimped there, perhaps even inadvertently, the consequences can be really dire.

Members don’t care about back office efficiency

It can be easy to fall into the trap of spending your technology budget on yourselves rather than your members. One of the obvious things people always look to technology to solve is stripping out mundane activities like rekeying of data. The reality is though, do your members care that you have to rekey? Probably not.You could argue that efficiency does benefit members. More efficient credit unions pay higher dividends and can offer better-priced products. That is fair enough. Having spent many years in my career analysing operational processes, I’d caution that rekeying is more often a very small proportion of process waste. Before attacking rekey waste with expensive technology and technical integrations, credit unions should analyse their processes and determine where staff spend their time. I think you’d be surprised! I’d bet there are many more simple ways of eliminating far more wasteful practices than rekeying.

Disclaimer (slightly bias 😳) Nivo could be the answer

If any of the above rings true it may be worth thinking about Nivo before embarking on a different technology path:

  • Nivo is based around a secure messaging tool. Messaging is an incredible channel for building human relationships. There’s a reason why people love messaging so much to talk to friends and family.
  • Nivo's in-built technology features actually deliver an experience akin to the most celebrated challenger banks.
  • Nivo is different - not many Financial Services have anything like it
  • Nivo is free to try with no technology setup effort required.
  • Nivo is proven, built by Financial Services technology experts to bank-level security, independently security tested and loved by all who use it - just ask us for references!
  • Nivo delivers benefits such as:
  • Up to 100% uplift in new member setup
  • Over 75% efficiency in setup processes
  • Over 80% improvement in member contact rates.
  • When you want even more benefits it is incredibly easy to integrate Nivo.

Receive 'Leaving legacies The digitisation of regulated Industries'

For regulated industries, where risks need to be expertly mitigated, it can be difficult to make the move away from widely adopted legacy systems.In this guide, we’ll run through the benefits and challenges of digital transformation for financial services, with practical steps on how to move away from legacy systems for the betterment of business and customers.

Written by

Mat Elliott
CDO & Co-founder, Nivo