4 Credit Union Trends in the Digital World


Certainly, digital banking is among the most important credit union trends. During the pandemic, customers rushed in record numbers to put digital banking to the test. They proved that people of every generation are willing to make payments, transfer money and manage their accounts online. Digital banking is clearly here to stay. But what does that mean for credit unions and their customers? 

Credit union technology may have advanced. But one thing hasn’t changed. People still want quick and easy access to their accounts along with the legendary credit union service they’ve come to expect. 

Due to Covid-19, financial institutions of every size were forced to evolve more quickly than planned. Now that the dust has settled, credit unions are continuing to find better ways to serve their members and help them manage their financial lives. This means investing in technologies. Beyond the technology, however, for credit unions, it’s always been about member satisfaction. Technology can only make it better. 

Here are the trends that credit unions are starting to leverage to create the next-generation customer experience.

1. Artificial Intelligence and Machine Learning

In the past, the customer experience was driven by face-to-face interactions. Today, that’s changed. Credit unions now need to create and deepen customer relationships in a different way. Credit unions have a tremendous amount of invaluable data about their members. Through the use of artificial intelligence and machine learning, credit unions can use this data to create a connection and generate trust. 

AI identifies patterns of behavior and uses these patterns to send alerts, for example, to remind a member to pay a bill or transfer funds when the account balance is low. AI, however, can be even more proactive. For example, in addition to telling a member that they are paying too much for a particular bill, AI can take action to reduce the bill. 

“We Want Amazon”

According to BCG’s 2020 Retail Banking Survey, 37 percent of respondents want their banks to be more like Amazon. Twenty-nine percent want banking to resemble a personal shopper experience. This speaks volumes about the level of customization customers want. Customers in every industry have come to expect a highly personalized experience online. This is great for the many credit unions that take pride in the strong relationships they form with their members. It’s what differentiates credit unions from big banks now and how they will continue to attract and retain members in the future.

AI holds tremendous promise for credit unions in terms of the way they do business. However, despite the hype, AI is not growing as quickly as some other technologies for credit unions. This is mainly because credit unions don’t have the internal resources to develop. Expect to see AI integrated into more third-party applications in the future. 

2. Cloud Computing

Half of all credit unions are either using cloud computing already or are in the process of shifting key systems. That number is expected to increase. However, some credit unions are reluctant to go to the cloud. This reluctance is fueled by misconceptions about the best way to achieve cloud migration. One of the more prevalent myths is that institutions must do all or nothing. This isn’t necessarily true. It may be possible to establish a hybrid environment. In fact, many of the popular hosted applications already in use, such as Office 365 and Dropbox, are in the public cloud. 

The cloud offers many benefits, including scalability and agility. Using the cloud, credit unions can start with what they need and scale accordingly. As new services are required, the cloud offers flexibility that will dramatically reduce the time to market. In addition, the cloud offers high availability through redundant operations.

Of course, any cloud migration strategy must have in place the proper security measures to avoid data breaches. Credit unions should partner with a reputable cloud provider and leverage the provider’s existing controls. 

3. Partnering with Tech Companies

Increasingly, credit unions are starting to partner with fintechs for extra support during their digital transition. Fintech partnerships allow credit unions to develop lean and agile operating models that facilitate the delivery of the excellent service their clients expect. Similarly, other advanced technology firms like Instnt are helping credit unions onboard customers digitally. Leveraging these tools allows credit unions to implement tested solutions in a fraction of the time it would take for in-house development.

4. Digital Onboarding

The customer onboarding process is the first opportunity the credit union has to get information about the new member and learn more about them. Members want a frictionless onboarding experience. This means one that is simple, fast, and efficient. As the first step in establishing a customer relationship, it’s the most important. The credit union must gather quite a bit of information, yet the process shouldn’t feel onerous for the customer. Digital onboarding facilitates the process, helping to reduce operating costs while fulfilling the credit unions’ regulatory and compliance obligations. 

Customers expect that they can complete the entire onboarding process online without ever having to go to the branch. If the process is slow or frustrating, customers lose confidence in the credit union and are likely to leave. In fact, credit unions may lose up to 40 percent of potential members during the onboarding process. And the cost of acquiring a new credit union member via a traditionally manual process is between $400 and $700. Digital onboarding could increase credit union membership and significantly reduce the cost of acquisition. 

Instnt AcceptTM: The Onboarding Solution for Credit Unions

Credit unions shouldn’t delay leveraging some of the most important credit union trends. When you partner with Instnt, you’ll bring more good customers while mitigating the risk of fraud.

Instnt simplifies the ever-changing regulations around KYC and AML, virtually eliminating compliance worries with up to $100 million in annual fraud protection. With Instnt, credit unions can grow twice as fast. The solution features an intuitive frictionless user interface that potential members appreciate. Through artificial intelligence, Instnt deploys patent-pending predictive analytics, allowing you to leverage the latest credit union technology trends — without a team of IT experts, your institution probably doesn’t have. 

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About the Author

Instnt's fraud loss indemnification technology provides coverage of up to $100M for fraud losses stemming from synthetic, third-party, and first-party fraud. With Instnt's comprehensive fraud loss protection, businesses can confidently extend their services to a wider customer base, enabling them to embrace more opportunities and enhance revenue streams while maintaining a secure, fraud-free environment.