By Ron Daly, President/CEO
Virtual StrongBox, Inc.

Members have no complaints about the credit union’s tech offerings, so it’s all good, right?

Wrong, says one expert.

“It isn’t wise to mistake radio silence for member satisfaction,” said Ron Daly, president and CEO of Virtual Strongbox, who added that it is essential to get out ahead of any potential issues before members start walking out the door due to dissatisfaction over the CU’s digital service delivery.

Daly underscored the urgency of sound technology decisions, pointing to digital banking milestones that show the shift toward mobile is now happening at an ever increasing pace, leading to an “explosion” of mobile banking needs:

  • 1994 –Stanford FCU is the first FI to offer a viable Internet banking service

  • 2001 – 19 million U.S. households use online banking

  • 2005 – The FFIEC provides guidance for all FIs to beef up security and authenticate remote banking

  • 2007 – Apple’s iPhone changes smartphones—and banking—forever with swipes and taps

  • 2009 – Online banking grows to 54 million U.S. households

  • 2015 – 90 million U.S. adults bank via smartphones

Do Anything With Digital

“With consumer technology moving at unprecedented speed and mobile set to overtake online, people can do virtually anything on a digital device—get pizza delivery, order a cab, download a book, take an exam or test their glucose level,” said Daly. “So, it’s reasonable that your members want a similar credit union experience, which begs the question: How’s your credit union really doing in satisfying its members?”

Daly said that if the CU’s processes and technology are much the same as they were 10 years, five years or even sometimes one year ago, the answer to the question would be “not well.”

“With your management team, consider these questions: Can our members apply for an auto loan and get approval—start to finish—in any e-channel they want?,” said Daly. “Does that include submitting paycheck stubs and signing documents? In our mortgage process, do we still incur courier charges to meet TILA-RESPA Integrated Disclosure deadlines? Do we offer secure e-sign capabilities and can needed documents be safely exchanged and stored online?”

Daly reminded that today’s consumers are motivated by convenience.

“If your member is watching an important playoff game, there’s no reason to drive to the store for diapers and dog food when Amazon will deliver them tomorrow with just a few clicks,” said Daly. “Members want it to be just that easy to do their banking.”

Cost Is Roadblock

Yet the cost of making major system changes, possibly a new core system, to keep up with digital banking is a roadblock to change, Daly acknowledged.

“I’ve heard a number of credit union execs say it costs too much to invest in new technology and their current systems work OK, noting that they don’t hear too many complaints,” said Daly. “But the fact is, most legacy systems were designed for physical branches, not for online or digital banking.”

But instead of letting members walk out the door, Daly said many CUs are finding they can save the cost of new core systems by connecting their current technology to cloud technology, which he said is easy on the budget and doesn’t require a lengthy time horizon.

“In turn, you can connect your legacy technology to the same consumer technology—smartphones, tablets and smart watches—used by your members and your employees,” said Daly. “Not only is this less costly, but it can improve back-office efficiency and greatly enhance members’ credit union experience.”

Daly acknowledged that a common fear among all financial institutions is that it isn’t safe to transition to the cloud.

“This is a valid concern because most online documents are acted on and stored in the public cloud, where there is minimal security and people’s information is commingled. And it can be especially alarming if there’s a chance your members’ personally identifiable information might be compromised,” he said.

“At Virtual StrongBox, we’ve bridged the gap between the convenience today’s members demand and the ultra-high security that high-risk organizations, like credit unions, need,” continued Daly. “Client credit unions are benefiting from our application interfaces (API), which allow them to use their legacy technology to their best advantage, while creating workflow efficiencies and, importantly, increasing member engagement. Also, our secure file-exchange service enables credit unions to shorten loan processing time to comply with ‘Know Your Customer’ regulations, as well as to deliver receipts and notifications,” he said.

Fast-Moving Members

Daly said it’s time all credit unions face the fact people don’t want to spend a lot of time thinking about their banking activities.

“With a strong service and technology partner, your credit union can delight its members with familiar functionality and shorter sessions on their banking app or online program,” said Daly. “But those that are slow to adapt to a customer-first strategy may find themselves left behind. As Will Rogers once said, ‘Even if you are on the right track, you’ll get run over if you just sit there.’”