Call it a sea change – a massive alteration of the US financial services landscape. Everything seems different today and it is because of the pandemic.
What do you need to be thinking abut now to survive tomorrow?
An interview I did with Cornerstone consulting firm’s Brad Smith for a CUInsight article left me wanting more from Smith and here it is, a one-on-one podcast where we hear what smart credit unions are doing today.
Like what? Like recognizing that the mainstage role of the branch finally is over, probably forever. Smith is not saying he thinks branches are toast – he doesn’t – but he thinks their role is necessarily changing as many of us have gotten accustomed to not needing the branch and many of us also are simply fearful of places like branches.
Much financial services has shifted to digital and there it will stay.
“The challenge for credit unions now is learning to sell through the digital channel,” said Smith – and many institutions are playing catch up. There’s no time to delay.
An unexpected problem, said Smith, is that the economy’s collapse has necessitated taking a new look at the FICO scores that used to enable confident and instant credit decisioning. But that 800 score of May may be today’s 700 score and falling due to late pays, job loss, and worse.
How can an institution provide the fast decisioning consumers now expect – but do it safely? Smith has thoughts.
Another big winner today: MRDC, said Smith. Even those who had scorned it are diving in.
One more big winner: video chat. We use it at work and we are now ready to use it in financial services. “Video conferencing will be another net winner,” said Smith.
An area where credit unions need to hop to it: credit card rewards programs need restructuring. The big players – Amex, Chase, Capital One – already are on the move. Credit unions need to think fast and hard about this. But not many are, Smith admitted.
A last pandemic triggered push: a huge drive for cost savings and efficiencies. Many credit unions are looking to trim costs on commodity tech – think core systems – and redirect monies into strategic tech – such as true digital account opening.
Big changes are in motion. Smith offers a road map in this podcast. Take notes.
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