The following post is part of a series of blogs written by MeridianLink Partners who will be attending the MeridianLink LIVE! User Forum in May 2022. To learn more about the event, click here.
By: Kevin Polinsky, Senior Director, CUNA Mutual Fintech Solutions
Financial services continue to see rapid-fire developments that are creating an increasingly competitive environment. While there is seemingly no shortage of areas requiring the critical focus of credit union leadership, there are four common denominators that are together exerting transformational influence on the credit union digital landscape.
1. The convergence of buying and borrowing
Borrowing is about enabling members to fulfill their purchasing needs. The credit union’s traditional role is to provide funding—for a car, a home, a vacation—but members are often not starting the purchase journey with their credit unions. Often, the first point of interaction a member has in their buying journey is a seller, and increasingly those who sell consumer goods and services are exerting greater influence over where your members secure funding. This disintermediation is not new; it’s been a fact of life since store-branded charge cards appeared several decades ago, but the trend is accelerating in the current environment of one-click purchases taking place anytime and anywhere. That 24/7/365 buying experience is increasingly served by instant credit decisions happening within the retail experience rather than at the credit union.
2. Always-on digital service
The terms “digital” and “technology” have become ubiquitous for what credit union strategy often is intending to achieve: growth and efficiencies. As such, all digital is not created equal and means different things to different credit unions. From the standpoint of members, however, digital should be understood to have a single meaning: simple, touchless, reliable. Turning on a light switch means you get light quickly. Digital should invoke the same trust for members. It should be an easily available utility.
3. Velocity drives success
Understanding digital as a utility means that credit unions must focus on velocity to enable growth and efficiency. Many credit unions are operating with a legacy technology model built on different components from different providers who are all at different stages of modernization. The resulting ecosystem has many vertical points that require continuous integration, maintenance, and resources to achieve baseline function. It’s a costly model that often limits the ability to achieve an Amazon-like experience that members demand. Too often, legacy technology is disconnected technology requiring staff to advance members through the process, limiting digital decisioning to credit union hours.
4. Think like a member, solve like a fintech
Credit unions must present solutions to members’ problems, challenges, and wants. The trusted relationship between members and credit unions is key to this success. Enabling a digital offer that reduces disintermediation by placing credit unions at the beginning, middle, and end of the member buying experience is at the core of this approach. The solutions that credit unions employ must enable an end-to-end experience that includes shopping, contracting, and funding. Credit unions should look for fintech partners who heavily invest in their own products. This allows credit unions to offer experiences that members seek while operating with a greater competitive force.