Attending THINK might be one of the best things you can do for your credit union. You’ll learn about industry trends, gain new skills, and make all kinds of new connections. But it can be overwhelming, too. So take a moment to preview 15 insights that will be referenced and quoted at THINK 18 and expanded on throughout the year. Click the links for more from industry experts.
- Why the “Race to Excellence”? Why the “Race to Excellence”? Because that’s where we find ourselves as technology firms vie for our members’ business. As succinctly stated in the Bain research report, “If banks don’t reorient their approach and radically accelerate their rate of progress, loyalty will suffer, and they will watch technology firms poach more business. Meanwhile, their economics will erode as too many routine transactions continue to flow through expensive branch and call-center networks.”
There is a great advantage in the customer and member insights that traditional financial institutions possess. The key is to apply these insights in ways that directly and positively impact the digital experience, similar to how large tech firms currently improve shopping, social, search and payments.
- Our Power Sprints are designed around the idea that credit unions need to take action now: How banks can transform from digital laggards to digital leaders. “Digital maturity is a moving target. The most successful banks understand where emerging technologies support strategic objectives and don’t get caught up in the hype about new, unproven technology. The marks of a true digital leader are organizational flexibility and agility.”
Banks need to demonstrate to supervisors (and other stakeholders) that they understand the risks associated with new technologies and pursue innovation in a way that enhances – or at least maintains – operational and financial resiliency.”
- One of our major focus is around Payments. And for good reason: 2018: The year of the mobile wallet reset. “As wallets, they’ve been presented to consumers as the way to make checkout easier — convenient, fast, efficient. That doesn’t seem to be enough. In our own recent studies of mobile wallet adoption, we’ve started to see a slight uptick in concerns over security by the large majority of consumers who don’t use them. That’s a change from where we were two years ago. In a world where the certainty of a consumer’s identity and her authorized use of those credentials is essential to building trust in a world where the consumer and her credentials become more and more intangible, he who cracks the authentication code will take payments and commerce to its full, digital potential. And even become the tailwind that moves identity and authentication beyond the retail payments use cases we speak about today.”
- Data is the new oil. Here’s why: Data-Savvy Banking Organizations will destroy everyone else. “According to Accenture, “Enterprises must put data at the core, leverage applied intelligence (the spectrum of automation, advanced analytics, machine learning, natural language processing, and other AI technologies) to unlock unique intelligence that is powered by domain and industry expertise. This unique human-machine capability is required to drive innovation and breakthrough results.
Market leaders of the future will be able to access a single source of insight and intelligence that will enable seamless back office processes and digital customer experiences that are in real-time and add value both for the organization as well as the consumer.”
- Data is vital but it needs a comprehensive look at your credit union: How to build a data-first culture for a digital transformation. “Getting better data is key to eliminating the unknowns of a digital transformation. At Sprint, as CDO Rob Roy explains, leaders called for a new company culture that put data first.”
- And, most importantly, data quality is everything. Seizing Opportunity in Data Quality. (The cost of bad data is an astonishing 15% to 25% of revenue for most companies.) “Fewer errors mean lower costs, and the key to fewer errors lies in finding and eliminating their root causes. Fortunately, this is not too difficult in most cases. All told, we estimate that two-thirds of these costs can be identified and eliminated — permanently.”
- There are many factors that impede the use of mobile payments. Here’s one: Digital wallets are safe, yet Americans remain wary. “Although 25 percent of consumers have used a mobile app on their phone to make a payment — a number that will continue to grow — only 12 percent of consumers trust alternative payment providers to protect their payments, according to a separate survey from the American Bankers Association.”
- Cash is still important to members, what needs to change to transform their behavior? Payments are a-changin’ but cash still rules. “Retail payment systems continue to become faster and more convenient. Yet, despite increased use of electronic payments around the world, there is scant evidence of a shift away from cash. As the appetite for cash remains unabated, few societies are close to “cashless” or even “lesscash”. In fact, demand for cash has risen in most advanced economies since the start of the Great Financial Crisis. This resurgence appears to be driven by store-of-value motives (reflecting lower opportunity cost of holding cash) rather than by payment needs.”
- Maybe this is the answer? Integrated Payments: Beyond the buzzword. “Aberman said there are a few industries that have already “arrived” in the integrated payments arena. Retail is the classic example, he said: eCommerce completely depends on integrated payments. Brands with a digital presence can’t do business without embedding payments in their online stores.
Online accounting and invoicing are another area where integrated payments have already gained traction, especially among small- to medium-sized businesses (SMBs) and service providers who are now managing their books in the cloud rather than buying desktop software. These SMBs and service providers use integrated payments to slash paper invoicing and enable credit card payments online.”
- Collaboration among unlikely partners is essential: 5 ways Fintech firms help banks and credit unions. “The real goal for banks and credit unions is to find the right mix of fintech solutions and traditional banking. Play to the tried and true strengths of each type of organization while also opening up to new opportunities to access tools that will empower consumers and reinvigorate marketing opportunities.
So, the next time you read a hand-wringing article about how fintech is going to make retention and acquisition more difficult, or cross-selling more challenging, keep things in perspective. Just remember that there are number of quality fintech firms out there that can turn your concerns into opportunities … growing your revenues, building your customer base and helping you succeed for decades to come.”
- There have been major changes in the Financial Services Industry. Guess what, there is much more change to come. The coming wave of Digital Disruption. “The constraint for your company will not be the technology. It will be your ability to bring the three drivers to bear: to lower costs, engage customers, and make better use of assets. If you can employ digital technology to do that effectively, you will be among the winners of the age of digital disruption.
- One way to answer this wave is through this tactic: Enterprise Consolidation leads 2018 Digital Banking Trends. “In 2018, AI and other new technologies will continue to dramatically change the ways consumers interact with the world around them, including how they bank. Banks and credit unions must be able to quickly offer a wide variety of digitally-optimized options, for everything from payments to account opening to customized analytics, to ensure they continue to play a central role in their customers’ and members’ lives.”
- AI and Machine Learning are hot topics. Why AI is the ‘New Electricity’. “AI is the new electricity,” said Andrew Ng, co-founder of Coursera and an adjunct Stanford professor who founded the Google Brain Deep Learning Project, in a keynote speech at the AI Frontiers conference that was held this past weekend in Silicon Valley. “About 100 years ago, electricity transformed every major industry. AI has advanced to the point where it has the power to transform” every major sector in coming years. And even though there’s a perception that AI was a fairly new development, it has actually been around for decades, he said. But it is taking off now because of the ability to scale data and computation.
- Digital Transformation should be your #1 Goal. But it’s not everything. Why the Customer Journey in Banking will never be ‘Digital Only’. “Consumers like charting their own journey depending on their comfort with different channels, and the type of product or service they are buying. The journey for paperclips would look a lot different than, say, a new sailboat. Similarly with services, the journey to plan a family vacation would look markedly different than finding a new accountant or hair stylist. The combination and weight of online reviews vs. word-of-mouth referrals will vary greatly.
Bank and credit union consumers are no different. Their journey is complex and almost always includes multiple touchpoints. Consumers that start their journey digitally don’t necessarily complete their transaction digitally. In fact, according to the ForeSee Experience Index, Overall, nearly two-thirds (61%) of consumers start their journey in a digital channel when opening a new account, while more than half (58%) of those end up in a branch.’
- Last but not least, here’s the reason why everybody is talking about ecosystems: New Banking Ecosystems will use data and collaboration to deliver value.“As banking and lifestyle ecosystems evolve over time into more open, transparent and collaborative landscapes, attitudes and cultures must shift. For banks, these are not things that you can train – it begins with the skill sets you hire for, nurture and build around, and the leadership that inspires and enables it.
Look at the makeup of an average bank board and compare it to the leadership at Amazon. The mix of education, employment history and personality types offers an array of thinking, taking in technology, science, psychology, the arts – and entrepreneurialism.
So who is better adapted to influence and implement an ecosystem where innovation will thrive?
Join us at THINK 18 for a deep dive into the technology shifts and trends that will impact your credit union.