Digital transformation means different things to different industries and subdivides even further within those industries. Credit unions are a perfect example. It seems the more regulated the industry is, the more granular your digital transformation research and outcomes must be.
According to a report from Forrester last year, “Every CEO must continuously reinvent their business with evolving technology at the core — or watch while their customers defect and their markets are disrupted.” Credit unions are seeing this with fintechs and others entering into their space and scrambling to catchup, much less get ahead.
Forrester concluded that companies focusing on these three things will come out on top:
- Focus on customer outcomes.
- Generate revenue from new digital products.
- Reinvent their business models with technology at the core.
“Technology can be a great enabler, but for credit unions it has to align with your existing membership and your potential membership, or put more succinctly your entire field of membership,” Sam Brownell, CEO/founder of CUCollaborate, said. “Depending upon the composition of your membership and potential members, credit unions should prioritize different strategies and tactics in digital transformation projects.”
If your membership is geographically diverse, optimizing your digital channels will be a higher priority, for example. That way members will be able to reach the credit union and access their money on their terms. The same is true for a field of membership that works odd hours or in multiple locations, such as airline pilots and flight attendants.
However, if your field of membership is centrally located in a particular county or your field of membership is older, digital channels should still be a priority but perhaps not quite as urgent.
If you leverage a national association for eligibility, then you should be aware of the strengths and weaknesses of using associations in this way and focus on implementing technology that supports indirect acquisition channels and mitigates the problems that associations present in direct acquisition strategies.
“For credit unions, as it has always been, it’s about knowing both your members and potential members and understanding and fulfilling their needs and desires around how they want to transact their financial business,” Brownell said. “Knowing them will help determine which technologies you employ, right down to the sophistication of your core processor.”
Some regional or national credit unions choose to grow by adding underserved areas around the country to be able to serve those he need, Brownell pointed out. If this is your business strategy, your credit union must find a core that does more than the average core processor today. “Field of membership determines member personas and needs, and that determines your technology needs and how your transformation should happen. Field of membership is at the heart of it all for credit unions, including digital transformation.”