Here’s the thing: credit unions must prioritize digital convenience and utility. It’s starting to get embarrassing.
In our weekly newsletter, we shared a short PR blurb about how Sound Credit Union recently completed a Zelle® integration. Sound Credit Union is well over $1b in assets, which raised several questions:
- Are other leading credit unions also late to the peer-to-peer (P2P) payments game?
- Is P2P capability on the 2021 roadmap for smaller credit unions?
- How is this even newsworthy?
Well, we know the answer to the last question. Difficult cores, cantankerous online banking providers, and integration woes make P2P technology a real pain. But convenient utilities like Zelle® are increasingly necessary for credit unions…
Unless you like losing market share to fintechs and big banks!
The Reality of P2P Payments
Instant P2P payments have been around for well over a decade. PayPal started the trend, Venmo popularized it, and Zelle® brought financial institutions into the mix. And the adoption rate of P2P payments is very high. Generally, people pay each other with P2P apps unless they work in a cash-heavy industry.
Which means that credit unions shouldn’t worry about whether their members would use P2P payments. They will. They already are using them in the form of PayPal and Venmo.
So, if you want to provide your members with services that they will use, already use, and actively want, then P2P payments are a sure bet. Plus, you’ll compete with these payments fintechs that slowly but surely erode your market share.
Providing More Convenience and Utility
Ultimately, P2P payments are in a class of nice-to-have digital features that are verging on must-haves. Other examples that are moving or have moved into the must-have class include mobile banking, free credit reports, and digital onboarding.
We can guarantee you that at the CU 2.0 office, nobody would consider joining an institution that didn’t offer those things. And not only are we not alone, but we’re mostly in the 30–50 age range—that is, not digital natives.
But there’s more! Not only are the above capabilities considered “standard banking utilities” these days, but they also provide convenience. (For reference, convenience is the biggest driver of member loyalty—NOT satisfaction!)
If you can make your members’ lives easier, they’ll stick around. Here’s a short list of some of the functions we’ve been suggesting. Links lead to other blogs we’ve written and some examples of these products in the credit union industry:
- Secure digital ID
- Fraud detection and prevention
- The ability to cancel cards and manage payments
- Transparency on loans and mortgages
- Digital account opening
The above are moving into must-have territory. Mobile banking is already firmly there. Do you want to wait for more people to choose competitors for their technology, or do you want to get this ball rolling while every other business is also pursuing digital transformation?
The chance to get ahead is closing. Soon, credit unions will have only the option to keep up—or worse, catch up.
If It’s Zelle® You Want…
Maybe your credit union already has a plan for most of the convenient utilities listed above. But maybe those plans are complicated—or pushed back—because of core compatibility or cumbersome integrations with your online banking provider.
We’re working on a way around that at the moment, and it’s with help from ModusBox. ModusBox helped Sound Credit Union launch Zelle®, and their goal is to accelerate the deployment of leading fintech solutions by eliminating vendor dependencies created by core and online banking providers.
It shouldn’t be newsworthy that a credit union integrated Zelle®. It should be standard. But hey, at least there’s an easy way to handle difficult integrations out there…
CU 2.0 spends the majority of our time looking through new technology and fintechs entering the credit union space. We come across a lot of interesting solutions, and we’re always happy to share what we learn.
In addition to blogs, we provide free, informal calls each quarter to discuss technologies, companies, and strategies that caught our eye. The calls are individualized, informal, and usually take about 30 minutes (plus a minute or two to lie about golf scores), and this service is available exclusively to C-level decision makers.
Please simply contact us if this interests you—or if you’d like to learn more.