By W.B. King
Originally published by Finopotamus – Fintech News for Hungry CUs
From words of encouragement by keynote speaker and NBA legend Earvin “Magic” Johnson to discussions on human-centric brands, digital natives, fraud protection and technology investment opportunities, the 2021 PSCU Virtual Member Forum provided actionable insights.
Touting the philosophy of “winning or learning a lesson,” Johnson related a story dating back to the Los Angeles Lakers 1984 championship loss against the Boston Celtics.
“For the first time I didn’t perform well and I hurt the Lakers. It showed me that I wasn’t as good as I thought I was. I had to see my rival led by Larry Bird with champagne over his head and the championship ring on and that made me so mad,” Johnson reflected with a disarming smile.
“I practiced all summer to get better,” added Johnson who is the CEO of Magic Johnson Entertainment, an investment conglomerate that owns stakes in the Los Angeles Dodgers and WNBA’s Los Angeles Sparks, among other organizations.
“This is what every credit union can take from this [my experience]—a competitor can make you better. We all have competitors in our market and they have made every credit union listening to this conversation better—just like you made them better,” said Johnson. “Larry Bird made me a better basketball player and a better man. I owe a lot to him. And we played the Celtics again in 1985 and we beat them.”
PSCU EVP and Chief Experience Officer Dean Young (left) and CEO of Magic Johnson Enterprises Earvin Johnson.
The three-day event, which took place from April 20 to April 22, welcomed more than 2,200 attendees, up from 2,000 last year.
“Let’s hope this is the last time we will all be coming together virtually for this annual event,” said PSCU EVP and Chief Experience Officer, Dean Young. The St. Petersburg, Fla. –based PSCU partners with credit unions to grow and meet evolving member demands. The payments-focused CUSO supports more than 1,500 credit unions, representing more than 5.4 billion transactions annually.
“Although our world of events and meetings has changed over the past year, the connections and renewed commitment we have made to serve our owners and our movement is very real,” said Dean. “We are thrilled to bring you actionable insight, strategies and thought leadership to position your credit union for growth and extraordinary member engagement in this rapidly evolving payments landscape.”
Credit Unions Fast-Tracking New Technologies
During the “Prioritizing Digital Innovations for the Future” session hosted by PSCU’s Vice President of Digital Experience, Cindy McGinness, findings from “The Credit Union Innovation Study” were discussed. The 2020 report was a collaboration between PSCU and the Boston, Mass. -based PYMNTS.
“This is year three of the study. We take a 360 degree look at innovation in the credit union sector,” said PYMNTS’ CEO Karen Webster who work closely with innovators in the payments, financial services, mobile, B2B, digital media and technology sectors.
“We want to take the temperature of members, the executives who are running credit unions and fintechs that are both collaborators and competitors just to get a sense of where innovation priorities are and to see how all the contributors in the credit union sector see and evaluate success,” said Webster.
The study surveyed 5,000 U.S. –based consumers, 101 credit union executives and 50 fintech executives. Due to COVID-19, Webster said the study showed demonstrative changes in the industry, which are presenting new opportunities for innovation and growth.
“While not surprising, we discovered that branches are not as important as they once were to credit union members. I think it’s fascinating because in studies one (2018) and two (2019) that was considered very much an expectation of the credit union experience,” said Webster. “In 2020, we found that 57% of credit union members say that branches are important and that’s down significantly. In 2019, we saw that two-thirds of credit union members said that branches are important—certainly COVID played a huge role in that.”
One big “takeaway” from the study, Webster explained, is that “digital habits” are here to stay. And this isn’t just for retail shopping and restaurant experiences, she said, but as part of the total credit union member banking experience.
Among other findings from the report was that credit unions have “stepped up” the pace of adopting and implementing innovative technologies, she noted. In 2020, for example, a majority of credit union executives said they are “leading” rather than “lagging” the competition.
“Fifty percent more credit union executives said that they launched products and services before their competition then they did in 2019, and 46% of credit unions said they were fast-followers after observing trends,” noted Webster. “I think this is a real positive and shows that credit union executives have really embraced their inner innovator to create the kind of culture within the organization to deliver the focus and products that members want and need.”
More Touch-Free Payments on Tap
PSCU’s McGinness questioned Webster on changing member demographics. She asked if digital natives and digital-only users, for example, are influencing executives on which technologies to implement.
“The innovation expectation is a conundrum — it’s really a gap,” responded Webster. “It’s interesting to see how credit union members and executives view innovation differently, and more importantly the role of innovation in acquiring and retaining credit union members.”
Webster explained that many of the credit union executives surveyed marked digital wallets and contactless cards as “innovative,” but noted that members “expect it” as part of their banking experience.
“We have seen 48% percent of credit union members saying that their interest in contactless payments has increased since the pandemic,” said Webster. “With contactless cards there are three times as many credit union members that want to use contactless cards as use them today.”
Referring to the study, Webster noted that 59% of Gen Z and 54% of millennials want to use contactless cards, but don’t necessarily have the ability to access it today.
“We [PSCU] have actually seen a tremendous increase in contactless usage over the last year,” McGinness said in support of the study’s findings. “Basically there has been a doubling in transaction volumes on both credit and debit cards. So the interest is there and once they have it, they are definitely using it.”
Another digital trend that is gaining interest among credit union members is the use of QR codes, explained Webster.
“Perhaps they have read about it or seen friends and family members engage with it,” said Webster. “This touch-less trend has become quite a driver for how credit union members want to engage at the physical point of sale.”