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Hi-Tech Services Could Fall Flat Without Proper Planning and Support
Tuesday, June 23, 2015 6:25 AM

By: Jan Southern, Senior Consultant

Not that long ago, preferred financial services for most credit union members included convenient lobby hours and ATM locations, no waiting in the teller lines, and favorable interest rates on savings accounts and loans. How quickly things changed!

Institutions must make technology and innovation part of the strategy to be successful.

According to CUNA’s 2014-2015 Environment Scan (E-Scan), mobile payments and mobile banking are two top trends credit unions should consider as strategic growth initiatives. Mobile payments, which are growing by 68 percent annually, are expected to reach $214 billion this year, and mobile banking is now the dominate channel for consumer engagement.

To address these trends, financial institutions are feeling increased pressure to offer virtual banking services that allow consumers to complete myriad transactions 24 hours a day from anywhere in the world.

According to CUNA’s 2014 Technology Spending Survey, about 50 percent of responding credit unions increased their annual tech budget over the previous year. Of that 50 percent, 22 percent indicated the increase will be six percent or more. But jumping on the technology bandwagon without the proper planning, preparation, and support can result in substantial implementation costs for services that may not integrate with existing protocols and fail to meet member needs and expectations.

To avoid any unnecessary roadblocks to rolling out a successful technology program, consider the following guidelines:

  1. Assess what you currently have and how it compares with competitive services.

Evaluate your operations, branch configuration, and service delivery systems to obtain real-time data regarding your business volume, traffic patterns, and the type of transactions handled on a daily basis, as well as staff utilization and expertise. The results, along with an analysis of your net operating costs, will help to determine the profitability of your existing structure, as well as what new technologies might be the most beneficial for reaching your member service and performance goals.

Then, take a look at what mobile and digital-based products your competition is offering and determine if you want to stay in line with other financial services providers or be a leader in your market.

  1. Verify what products and services your members prefer.

To avoid unnecessary spending on mobile or digital products that don’t meet member service expectations, evaluate how much technology you anticipate needing to meet current and future needs. This information can be gathered from your front-line staff, as well as by asking members what services they believe would provide greater convenience 24/7, such as mobile apps, intelligent ATMs, and digital loan applications. This includes identifying members who do not currently use digital services but who might be interested if they knew more about them.

While your goal is to potentially upgrade your technology footprint, keep in mind that even though a growing number of your members may be interested in the latest mobile and digital-based products, some older and established members are less familiar with—and less comfortable using—these services. However, this would be a good opportunity to gauge their interest in personal or universal banker services. In any case, don’t lose sight of the importance of maintaining good person-to-person branch services in areas where this demographic accesses your credit union.

  1. Establish a budget that will sustain technology implementation and on-going support.

Just as risk management and compliance initiatives are important to running a successful institution, technology and branch automation should be priorities when it comes to developing the annual budget. In addition to determining what it will cost to implement new technology, don’t forget to include the cost of employee training and member communications materials. Also, make sure you factor in the savings that can be expected, such as more efficient work environments and the reduction of redundant services, along with potential new business and revenue generation that can result from offering automated banking services.

  1. Build a well-thought-out, long-term plan.

More than likely, you won’t need to totally scrap your current delivery systems to build an effective virtual banking program. There may be existing services within current product offerings that can be improved with automation, such as upgrading your teller systems or updating your ATM machines to accept cash and checks, or services you have the capability to provide but haven’t yet implemented. If this is the case, make sure existing protocols are capable of providing long-term support or plan to install more robust systems to avoid any gaps in member services. (Often, implementation is as simple as reviewing the settings in systems in which you already have an investment.) 

Plan to initiate a thorough training program for staff since they will be the driving force for communicating with members about the new service offerings. And by all means, make sure you have robust security systems in place to protect member information from hackers and identity thieves.

Don’t be left behind on the hi-tech highway.

With the right foundation, a forward-thinking budget, and a supportive infrastructure in place, moving to more automation can keep your credit union competitive. If you don’t have the expertise in-house to undertake the process, a performance enhancement expert can help you to determine what it will take to implement the most appropriate digital and mobile products to provide better service and remain competitive in your market.

About JMFA

JMFA, an endorsed business partner of Credit Union Resources, is a leading provider of profitability and performance-improvement consulting. For more than 35 years, JMFA has been recognized as one of the most trusted names in the industry for earnings enhancement and expense control programs, training and development, and recruitment services, as well as product, service, pricing and technology-improvement consulting. JMFA is proud to be a preferred provider among many industry groups. To learn more about JMFA, please visit www.JMFA.com or call (800) 809-2307.