Credit unions are under more pressure today than ever before, juggling issues such as tighter regulatory scrutiny, the need to operate more efficiently, and the desire to offer more compelling products and services — all while trying to grow their business in an increasingly competitive market.
Other issues cooperatives currently face include:
Corporations and small business owners disenchanted with large banking chains and cookie-cutter business services.
An unprecedented specialization in lending, leaving most credit unions with large segments of checking-only members that they can’t serve profitably.
A digitization of currency and electronification of delivery channels that has reduced the barriers of geography, eroded opportunities for relationship banking, and mitigated some benefits of being a local, community-oriented institution.
A growing portion of U.S. adults who don’t know — or care — why they should save, borrow, and transact with an insured, secure, heavily-regulated financial institution.
These developments make it more important than ever to partner with an industry leader who will deliver solutions, not just software. Below are four areas of focus that credit unions need to pay special attention to before making the final decision on a new core provider.
#1 Business On The Brain
As credit unions grow their business member segment, they face a growing need for more sophisticated lending products such as commercial construction loans, multiple participations, and commercial real estate loans with varying payment schedules and prepayment penalties.
Credit unions should not compromise on these offerings, so it is important to choose a partner with roots in the commercial banking industry — one that can deliver not only unique credit union functionality, but also a wide breadth of business services. The right core solution will allow credit unions to offer everything from account analysis, cash management, and sweeps, to complex commercial real estate transactions.
In addition to demanding more complex and sophisticated lending products, business members are also looking for an easy way to manage relationships. These individuals want to be able to manage their business accounts just as easily as they do their personal accounts, and for this reason, business eBanking is an important part of any solution set.
#2 A Focus On Relationships
Customer Relationship Management (CRM) solutions can be a valuable tool for credit unions, but these systems also require significant care and feeding. Therefore, an ideal solution will allow you to gather the demographics of your members and even provide a real-time targeted list of product recommendations based upon similar individuals in those demographics, all with minimal overhead.
Credit unions will also achieve a higher level of integration if these products are embedded into a state-of-the-art user-interface such as HTML5.
#3 Members Are Mobile, So You Should Be Too
In order for credit unions to remain relevant in today’s market, their solutions must be widespread, readily accessible, and less disruptive than those of the competition.
The traditional means of serving membership from behind a desk or teller line is already giving way to a new standard of interaction, where associates visit members at their place of business or meet them at the local coffee shop.
For this reason, tablet technology is a socially acceptable and desirable tool for many financial activities. These devices are easy for employees to learn and handle, and they offer significant advantages in terms of effectively bundling in new tools and capabilities. Whether the focus is on a new membership drive at a local festival, account opening for new business clients, or cashing checks on location following a natural disaster, an innovative tablet-based solution will help you be in the right place at the right time.
Members also need solutions that allow them to interact with their accounts without ever talking to a member service representative.People today are more electronically connected than ever before, so eChannel offerings are a significant differentiator in the marketplace. A credit union that can say to its members, “You can do business with us 24/7,” is a credit union with a growing membership base.
eChannels are also the great equalizer, allowing credit unions to offer the same services to members that large regional banks offer to their customers. Members want and need the ability to go to the store at 10 P.M. and pay for their groceries with a debit card, then go home and pay their bills. If an ACH transaction is posted to their account, they want to be notified of that event by an eAlert. And if they happen to find a check in the mail from Grandma, they won’t want to drive all the way down to the branch to deposit it, which means that check remote deposit capture is another must have capability.
#4 Risk, Regulations, And Reporting. Oh My!
OFAC checks, identification verification, address analysis, NACHA updates, shared branch consolidation, NCUA 5300 reporting — the current list of governance obligations and risk mitigation requirements is enough to send any credit union decision maker into a tailspin.
And the upkeep of tracking so many regulatory deadlines and gathering report data from so many sub-systems can actually take employees’ focus off of efficiency and member service. To prevent this, credit unions should look for core solutions that help take the guesswork and legwork out of these activities.
For example, what answer would you give if your CEO asks “How many members do we have between the age of 25 to 35, with an average checking balance of $5000, and a car loan that will mature in the next 90 days?” A robust and easy to use Business Intelligence (BI) system is a must have for this type of query request, as it will allow you to mine your data and make business decisions based on current information.
Partnering with an industry leader in the credit union space will provide the peace of mind that all of these requirements are handled and automated effectively.
Credit unions need a trusted solution provider. FIS serves 75% of the credit union market, with the financial strength to deliver innovative solutions today as well as into the future. If you are looking for an on-premise solution, an outsourced solution, or combination of both, FIS Real Time Solutions stands behind a solid reputation of unparalleled products and services.
For more information about how FIS Real Time Solutions can deliver substantial value to your credit union, please contact Keith Nolan at 727.227.5783 or firstname.lastname@example.org.
Lenn Freeman is a product manager for FIS Real Time Solutions. She manages the product strategy for many of the desktop initiatives within MISER. This includes MISER DeskTop and MISERStudio (tablet-access to MISER), MISER Business Intelligence (BI), Cohesion, Administrator, SmartCOLLECTOR, and SmartWRITER. Lenn joined FIS in 1995 and has worked in several areas of the company including sales, education, vendor management, and development.
About FIS: FIS (NYSE: FIS) is the world’s largest global provider dedicated to banking and payments technologies. With a long history deeply rooted in the financial services sector, FIS serves more than 14,000 institutions in over 100 countries. First in financial technology, FIS tops the annual FinTech 100 list. Visit us at www.fisglobal.com.