Holiday IT Wish List for 2022 (Part 2)
By W.B. King
For this year’s annual Finopotamus “Holiday Tech Wish List,” we sat down with forward-looking credit union and fintech executives who shared respective tech hopes as well as forecasted market realities for 2022. Due to a plethora of interesting responses, the Wish List will be presented in three installments. Here goes Part 2.
Wishing for Better Data Management
With its approximate 30,000 members logging in “from all over the world” engaging in “high-risk transactions,” Embers Credit Union Vice President and Chief Operation Officer David Black said managing data risk is at the top of his wish list.
“We know their IP, the device they’re using, how they authenticated, the transaction history of their account, how much they have in their accounts, but that isn’t all cross referenced,” Black said. “We can’t quite make it so that a known high-risk member who logs in from a new IP address or from a new device at 3 a.m. can’t initiate a series of Zelle transfers that bring their account balance to an unusually low level without being challenged or paused – not without getting in the way of legitimate transactions.”
While the $497 million Marquette, Mich.-based credit union, which has six tech employees, is equipped with all the tools to manage risk, Black explained that the “only way to put it together” is for “a human to browse it and connect the dots,” so the data can be aggregated in to a “single version of the truth.” This also can be achieved with automation, he said, adding “We need artificial intelligence (AI).”
And the odds of Black’s wish coming true looks promising as a strategy is earmarked for 2022. “If not then, we’re hopeful it isn’t too far behind,” he said, adding there are expected challenges, such as how the integration will be monetized and deployed.
“This is a differentiator at so basic a level that winners continue and losers can’t. Smaller credit unions have to line up a variety of partners to perform basic tasks. That’s great, until you need to combine inputs from multiples of those to make good decisions in real time at scale,” Black said. “Partners like member Driven Technologies and Jack Henry & Associates help us pull it together.”
Wishing to End Fragmentation
Helping credit unions solve disruption and financial fragmentation issues is a wish held by Jack Henry & Associates’ President, CEO and Board Chair David Foss.
“In response to ongoing ecosystem disruption, credit unions must not only offer differentiated digital experiences that create new value for their members, they must also help members see and make sense of their money across disparate financial service providers,” Foss said.
The Monett, Mo.-based technology company provides payment processing services for the financial services industry and serves more than 9,000 customers nationwide.
“These days it’s not uncommon for consumers to use between 20 and 30 different financial apps and services,” Foss said. As a result, he added that this “fragmentation creates complexity and raises barriers to financial health, but it also presents credit unions with an opportunity to aggregate and simplify their members’ finances.”
To capitalize on this prospect, Foss said credit unions “must be fully integrated into the open banking ecosystem by way of safe, secure, reliable API connections” to third parties. Member benefits include transparency and an integrated experience across service providers.
“Members can share and permission access to their financial data from within their credit union’s digital banking experience. And this improves the utility, privacy, and security of interconnected financial relationships, and more importantly, it puts the credit union at the center of members’ financial lives,” Foss continued. “This first-app status will fundamentally streamline members’ finances, lower barriers to financial health, and give credit unions a much stronger competitive position in the current environment.”
Acknowledging that Jack Henry has been “bullish” based on its “current progress,” Foss is confident that his wish will be realized.
“We have opened the proverbial doors of our platforms to ease and extend access. For years, we’ve offered an open API layer that enables hundreds of fintech partners, including competitors, to integrate and offer their services to our clients,” Foss continued. “In 2020, we launched the Banno Digital Toolkit, which allows fintechs and financial institutions to use the same open API on which the Banno Digital Platform was built to create, bundle and differentiate their own digital products and experiences.”
So as Foss looks forward, he is “optimistic” that 2022 will be a pivotal year for fintechs and financial institutions valuing “connection” over competition. “While our ‘IT wish list’ is already in progress, we expect to celebrate important milestones in the New Year,” he said.
Wishing for a Digital-First Approach
To NCR Corporation’s President Douglas Brown, an important distinction should be made when discussing” digital-first” strategies, which dovetails in to his wish for 2022.
“Digital-first doesn’t mean digital only, but rather digital everywhere,” Brown said.
The Atlanta-based technology company provides software and hardware, professional services to financial institutions and other industries.
“My top wish (and expectation) is that credit unions will more widely adopt a digital-first approach next year. This means facilitating more connected member journeys across all touchpoints, including branches, ATMs and digital banking platforms,” Brown continued. “The credit unions that leverage more simplified, flexible architecture to power and unify once separate experiences will be able to increase efficiencies, innovate more quickly and strengthen member loyalty.”
While Brown said that there is always “a hesitation associated with change,” the “biggest risk” is standing still.
“Those that embrace the shift to digital-first will be able to facilitate more compelling and competitive experiences while quickly delivering new products and services,” Brown said. “We predict that in 2022, more credit unions will implement modern infrastructure to more effectively compete.”
Wishing to Put Members First
Building off the credit union motto of “people helping people,” Signal Intent’s CEO and Co-Founder Matthew Covi’s top wish for 2022 is “more investment in digital experiences” that place members first.
“Members no longer want to be pushed products and services, they want experiences that add value to their everyday life and improve their financial health,” Covi said. “I believe this will require significant investment in a variety of new technologies, including open banking integrations and more robust data.”
Known for its next-generation calculators, the New York-based company, with 20 credit union clients, delivers modern, digital tools that help banks, credit unions, mortgage lenders and insurance companies.
In Covi’s estimation, his wish of credit unions improving digitization efforts in 2022 has a good likeliness of coming true.
“In recent years, leaps have been made to adjust and deliver new technologies to meet members’ evolving needs,” he said. “Additionally, the National Credit Union Administration (NCUA) has made steps towards improving the regulatory environment around digitalization so that member satisfaction and experiences are not hindered.”
As is the case with all wishes, challenges exist. “Disruptive fintechs,” Covi said are “setting the bar high” for members’ experience expectations.
“They have more resources and less regulatory requirements so they can innovate faster than credit unions. To overcome this challenge, credit unions can partner with fintechs,” Covi continued. “Rather than spending precious and limited internal resources, institutions can tap a fintech to build out a digital solution and capture consumer data. This will enable credit unions to deliver on their mission of providing exceptional member service.”
Wishing for a Better Member Experience
As Bankjoy’s CEO Michael Duncan looks toward 2022, his wish is that credit unions accelerate their respective journey toward digital transformation. There is no better time to do it, he said noting that beyond banking, digital adoption rates are on the rise.
“Post pandemic, consumers have drastically changed many aspects of their lives, from how they work, to how they shop, and how they bank,” Duncan said. “But for true digital transformation, credit unions must be obsessed with the member experience.”
The Detroit-based company provides digital banking solutions, including mobile banking, online banking, online account opening, loan origination and conversational AI.
Today and looking ahead, is “all about” personalization, Duncan offered. “This increased interest in digital and personalization is not surprising, but financial institutions must keep pace with demand while also ensuring that their offerings are modern and seamless,” he added. “To deliver an outstanding, personalized experience that retains and attracts members, credit unions must fully leverage and optimize conversational AI.”
Credit union members who actively interact with retail brands via digital channels will increasingly expect the same experience from their banking interactions, Duncan said.
“This could be an issue for many financial institutions who continue to lag behind. However, credit unions have a longstanding history of providing superior service and are taking a more proactive approach to innovation,” he continued. “We’re seeing consistent trends, as more credit unions look to deliver a seamless digital experience, including conversational AI.”
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