BROOKFIELD, Wis.—Heading into 2016, new lending solutions and enhancements to grow the loan portfolio are attracting the lion’s share of CU IT dollars, reports Fiserv.
It’s a focus, too, that may come at a price to smaller credit unions, as those lending IT expenditures reduce what CUs with limited resources can spend on improving the member experience via all CU channels, especially mobile.
“From a business perspective I think we are seeing credit unions across every asset segment focus on growing the loan portfolio,” said Mark Sievewright, president of Credit Union Solutions for Fiserv. “I interact with credit unions every day of the week, and growing the loan portfolio is far and away job no. 1 from a business perspective.”
Fiserv surveyed 300 CU clients recently for their technology investment priorities. The survey shows that across all asset segments, 80% of credit unions ranked driving additional lending as no. 1 or no. 2.
Sievewright pointed out that credit unions enjoyed another quarter when they outperformed banks in the rate of loan growth, emphasizing the level of CU lending interest. But with small credit unions’ correspondingly smaller budgets, the choice to spend more in lending is likely coming at a price.
Price To Pay?
“If there is a price to pay, it will be in not being able to sustain or provide the level of experience members will get elsewhere,” said Sievewright.
Fiserv found that among its credit union clients the company is seeing lower mobile adoption rates from the lower asset categories due to limited resources. Sievewright explained that is why Fiserv has begun offering a small CU mobile solution that is more affordable. “We are seeing great reception to this.”
As national mobile adoption studies show FIs are coming on board quickly, Fiserv is seeing the same rapid pace from its clients.
“Within our 2,400 credit union clients we do core processing for, 1,440 do online banking with us, and now 700 are now live on the our mobile banking platform,” said Sievewright. “The point is that mobile is one of the most adopted technologies we have ever seen.”
CUs with the IT budgets to afford it are also focusing on not becoming irrelevant.
Mark Sievewright
“Credit unions get the fact improving the member experience and 24/7 access are now table stakes,” said Sievewright. “That means not only mobile, but Apple Pay, P2P . . .”
Credit unions are also having to spend more on controlling risk and fraud—in part because examiners are expecting greater accountability and similar protections across all credit unions, no matter the asset size.
Non-Interest Income
A final area of focus for IT spending, and then the priorities begin to fade, said Sievewright, is protecting and growing non-interest income.
While data analytics spending did not make one of the top IT focus areas this year, Sievewright expects that will soon change.
“Twenty years ago CRM was the next great thing. We are now to the place technologically where we can take data and apply analytic technology to that data and give credit unions far better insights about their members and member relationships than ever before,” said Sievewright. “And the punchline is we ain’t seen nothing yet.”