MALVERN, Penn.–In 2018 and beyond credit unions prepare for a shift from “omni-channel” service delivery to “opti-channel,” says one banking software provider.
Temenos predicts that change will occur in the next five years, with financial services providers employing an “opti-channel” approach to tailor the financial services experience for the specific individual, transaction type and more.
“This type of personalized experience will serve as a key differentiator for organizations in all consumer-facing verticals—none more so than financial services,” said Kris Frantzen, product manager, lifecycle management suite, Temenos. “We will continue to focus on functionality and integrations that support a streamlined, personalized, data-driven online and mobile experience, through our own configurable solution and the open application programming interface (API) foundational to our origination and account servicing solutions.”
Frantzen said, as part of this shift, credit union functions, such as branch originators, underwriters, and even collectors, traditionally stationed in “cube farms” will move away from those desks.
“The mobilization of those users opens up new member engagement possibilities and meets the needs of an evolving workforce,” he said. “We are focused on positioning our online and mobile capabilities for the credit union staff as well as the direct-to-consumer channels. This will also be bolstered by a personalized, multi-browser, multi-device workspace utilizing contemporary design features.”
Expanding Tools
Frantzen said that Temenos, too, is focused on leveraging and expanding its tools that support the data analytics efforts of credit unions.
“This includes support for easy access to the data around originations and account servicing processes, and optimized rule and automated workflow functionality to put the analytics to practical use—in account selection, decisioning, cross-selling, and other areas. We are also looking within this timeline at the application of machine learning, to drive self-optimizing processes,” he said.
Today, Temenos clients are focused on delivering an optimal experience for their existing or prospective members, across all interactions, said Frantzen.
Kris Frantzen
“This will entail continued improvement in both the member digital experience and efficiency in the CU's operations supporting the member experience,” Frantzen said. “Of course, regulatory requirements will always be top-of-mind for credit unions. So, updates such as HMDA revisions will be a focus as well.”
Frantzen said that focus is not greatly unchanged from 2017.
“However, we do see an increasing number of CUs evaluating their technology and processes to ensure they're future-ready," he said. “The pace of change in technology, competition and consumer expectations is at an all-time high, and credit unions realize they must be increasingly agile to meet the demands that are coming around the corner. More and more are putting plans in action to ensure they have a foundation to remain competitive moving forward.”
The evolution of technology and consumer expectations also presents opportunity for credit unions to serve as disruptors in the market, added Frantzen.
“To capitalize on these opportunities, speed-to-market is paramount,” he said. “So credit unions are scrutinizing their people, processes, systems, and technology vendors to eliminate any friction points that can slow delivery on new initiatives. This could include leveraging resources from vendor partners or ensuring they are employing open systems that enable new development by credit union IT staff.”
Frantzen said more CUs are leveraging data analytics to better understand, market to and support consumers and members.
“Those among our customer base that have been successful have focused on practical initiatives to use the results of their analytics efforts,” he said. “This includes queueing accounts for collections efforts using an algorithm developed from member attributes and payment history, or refining credit policy to increase automated loan approvals.”
Younger Consumers
Frantzen noted that the younger consumers CUs covet that are entering the market for financial products not only bring a completely different set of experiences and expectations—they lack an understanding of credit unions.
“CUs are battling a challenge of awareness of their value,” Frantzen concluded. “Additionally, they are faced with growing competition. Traditional competitors, such as other CUs and banks, are themselves reinventing their offerings and member experience. Fintech firms, on their own and in collaboration with their traditional competitors like larger banks, are also flooding into the market with the threat of eroding a CU's existing or prospective membership.”