SAN DIEGO–A new forecast for what 2019 holds includes three strategic areas of focus that all share a common theme.
The three areas of focus in the look-ahead from Symitar are Brand Strategy, Competitive Technology and Efficiency in Security & Compliance.
“These trends carry a common theme: local institutions fighting back with a personal touch and tech advantages,” Symitar said. “The pace of change in the financial industry is unprecedented…Regional and community institutions of all sizes are returning to their first principles and translating their personal service to the digital channel. This, combined with improvements in user experience via partnerships with core partners and fintechs, is ushering in a new era of strength and vitality for neighborhood financial institutions. Credit unions are building their reputations around engaging members with personal service, where and when they want to bank.”
According to Symitar, here is how credit unions will differentiate themselves and compete in 2019:
Brand Strategy
Symitar predicted that even as community institutions become more acquisitive to capture a larger market, the industry will see more multi-branding initiatives in 2019, as “merged credit unions work to keep local legacies alive and as digital brands evolve.”
“Creating a successful user experience will require a comprehensive digital platform supported by personal service,” the company said. “This is more than a bot; it’s a real person (perhaps in the branch or on an instant message service), ready to help at the limits of self-service”
With making digital personal a top priority, data warehouses and use cases for predictive analytics will also grow, the company said. In turn, CUs will generate better member insights and support profitability through usage, activation and attrition modeling and cross-sell/lifecycle modeling.
“Credit unions will brand more of their own loyalty and reward programs to retain and engage cardholders and checking account members who are being courted by non-bank competitors for cards and deposits,” according to Symitar.
Competitive Technology
Real-time payments will continue to make progress in 2019, especially as models emerge to help expedite the onboarding of more credit unions to achieve the desired network effect, the Symitar forecast states. The company added that regional and community financial institutions will find value in real-time payments’ ability to better serve small businesses, creating distinct solutions that enhance the user experience.
Among other predictions:
- Industry technology leaders will continue to embrace APIs and open banking concepts in order to help local institutions manage vendor integrations with ease and keep up with quickly evolving demands.
- Voice banking will begin to gain traction as voice-enabled skills offer more transactional options, giving users more reason to adopt the services. This is intimately tied to the increasing use of text/messenger bots.
- True AI use cases may become clearer in 2019, and implementations of augmented intelligence and robotic process automation will be a practical, short-term reality. “The progress will be used to invoke new workflow improvements and equip credit unions with pertinent member information – all helping to provide personal service when self-service presents restrictions,” Symitar said.
- To retain deposits and profitability, credit unions will look to technologies that differentiate their payment experience as well as help extend the life of traditional payment methods, according to Symitar. This includes offering bill pay with card-funded transactions and self-service card security controls, and implementing strategies around contactless cards and tokenization, to name a few.
- Small business services will extend beyond the traditional deposit and loan offerings in 2019, and commercial relationships will become more comprehensive and personal. Credit unions will recognize business owners for their entire financial relationship, treating them to more sophisticated, tailored offerings, Symitar added.
Efficiency in Security & Compliance
AI and machine learning have proven effective in the fight against payment fraud, and should gain use cases in 2019, Symitar observed, adding that AI-infused fraud mitigation systems will successfully stop more payment fraud and help compliance departments reduce false positives.
Moreover, account takeover, money laundering, synthetic identification, voice phishing and money mule scheming have become more sophisticated, rendering single-point fraud systems outdated, according to Symitar. As a result, the company said security and network services will merge for more comprehensive protection.
Other Predictions
- Advancements in biometric authentication and end-point protection will further strengthen security measures in banking.
- As the CECL deadline draws nearer, forward-looking credit unions will commit to a model that will benefit their vision and overall lending strategy, rather than skirting the regulation without gain, Symitar said.
“Local financial institutions remain best suited to make a real difference in people’s lives,” said Symitar CEO Ted Bilke. “Symitar is committed to enabling them to be the primary, trusted source for financial services in their communities. 2019 will be a year of significant progress in modern banking, a time when personal and digital advantages combine to give credit unions a strong competitive edge. Even while outside influences challenge the role and relevance of traditional banking, expect credit unions to find their footing and defend ground with a return to personal service.”