How Credit Unions Can Utilize Technology to Empower Themselves

The landscape of financial services is rapidly evolving, and credit unions face the dual challenge of staying competitive while maintaining their member-centric ethos. To thrive in this dynamic environment, credit unions must embrace technological advancements that not only streamline operations but also enhance member experiences.

According to IBISWorld, in 2023, the US credit union industry boasted a revenue market size of $126.2 billion. From 2018 to 2023, the industry's market size in the US has shown a steady average annual growth rate of 7.0 percent. As the credit union industry continues to grow, it must adopt modern technologies to ensure operational efficiency.

By leveraging innovative solutions, credit unions can empower themselves to better serve their members while staying true to their cooperative values. Here are a few key ways credit unions can utilize technology to propel themselves forward.

Digital Banking Platforms

Providing members with seamless online and mobile banking experiences is a must in today's digital age. Credit unions can invest in robust digital banking platforms that offer features like mobile check deposit, bill pay, peer-to-peer payments, and real-time account access.

As reported by Mozrt, the majority of credit unions are actively engaged in digital transformation efforts. However, these financial institutions are yet to fully embrace digitization, mostly due to a lack of finances, resources, and skilled manpower. Credit unions must realize that without such digitization, it will become impossible for them to continue serving their clients efficiently.

By offering convenient and secure digital banking options, credit unions can attract tech-savvy members and compete more effectively with larger financial institutions.

Data Analytics

Data is a valuable asset that credit unions can leverage to gain insights into member behavior, preferences, and needs. By harnessing the power of data analytics tools, credit unions can analyze transaction patterns, identify trends, and personalize member interactions.

Data analytics can also help credit unions catch loan defaulters. Loan defaulters represent a significant risk to credit unions. These customers have failed to meet their repayment obligations, signaling financial distress or unwillingness to honor their debts.

As reported by Money.com, credit card and auto loan delinquency in the US is on the rise. Under such circumstances, credit unions must make the most of advanced data analytics to track these defaulters. If necessary, they can work with debt collectors who use skip or batch skip tracing techniques. Skip tracing services involve the use of advanced databases, public records, and investigative methods to locate individuals who have become difficult to find.

According to Debtor Inspector, skip and batch skip tracing allow agencies to leverage technology and investigative skills to track down elusive debtors. Credit unions simply need to provide these service providers with the necessary data, and they will do the rest. 

Artificial Intelligence and Chatbots

Artificial intelligence (AI) and chatbot technologies offer credit unions the opportunity to enhance customer service and streamline operations. Chatbots can provide instant support to members, answering frequently asked questions, assisting with account inquiries, and even guiding members through financial planning processes.

By implementing AI-powered solutions, credit unions can improve efficiency, reduce costs, and deliver more personalized experiences to their members.

Digital Lending Platforms

Streamlining the lending process is key to enhancing member satisfaction and driving loan growth. Digital lending platforms enable credit unions to offer online loan applications, instant approvals, and electronic signatures. This helps make the borrowing experience faster and more convenient for members.

As the lending process gets digitized, credit unions can reduce paperwork, expedite funding, and compete more effectively with online lenders.

Frequently Asked Questions (FAQs)

How does a credit union support the local community?

Credit unions support the local community by providing accessible financial services and investing in local businesses and initiatives through loans and grants. Additionally, they often engage in community events and charitable activities to foster economic development and social well-being.

What is the biggest benefit of using a credit union?

The primary advantage of using a credit union is often lower fees and better interest rates on loans and savings accounts compared to banks. Also, credit unions typically prioritize personalized customer service and community-focused initiatives, fostering a sense of belonging and trust among members.

What do most credit unions specialize in?

Most credit unions specialize in providing financial services like savings accounts, checking accounts, loans (including mortgages, auto loans, and personal loans), and credit cards. They often emphasize member-centric approaches, offering competitive rates and tailored solutions to meet individual member needs.