Irrelevance beckons. And it will swallow many credit unions whole.
That is the message delivered by Andre Iervolino, a longtime credit union senior staffer who wrote a provocative piece in The Financial Brand entitled “10 Factors That Will Determine Banks’ Future Relevance.”
Reading is article will rock you because, frankly, he is not optimistic about the future of many credit unions.
A core reason is that, often, they just don’t get that technology is rewriting the game book. What mattered 25 years ago does not count today.
In this podcast we explore the key takeaways of the article and the first is that the nature of a primary financial institution has changed and, said Iervolino, “Community financial institutions no longer compete only against the large banks within their marketplace, but also with big tech (Apple, Amazon, Google Checking, PayPal), fintechs, and neobank/mobile banks such as Chime, SoFi and Ally.”
He added: “On average, financial services customers have between five and eight relationships spread across multiple institutions, many of them not traditional banking providers.”
How do you compete against that complexity?
His second takeaway is remapping the future of the branch – think small footprint, cashless, staffed by Apple type geniuses and, yes, he tells how you will hire them. Hint: it involves paying a lot of money.
Next he throws the FICO score under the bus and proposes that credit unions adopt what he calls a Financial Health Score.
Along the way Iervolino offers key survival advice: Act like a startup.
Prepare to be challenged.
Listen Here
Want to listen to more of the Credit Union 2.0 podcast series? Click here to view the series.
Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com
