Traditionally large banking corporations have had the upper hand in the financial industry. They have the capital needed to invest in new technologies that keep them at the forefront of the industry. This puts small banks and credit unions at a serious disadvantage because, often times, these smaller institutions do not have the financial resources at their disposal to adopt cutting-edge technologies. However, the development of FinTech (financial technology) is levelling the playing field for credit unions by affording the opportunity for smaller institutions to provide world-class service at an affordable price point. Let’s take a look at how credit unions are adopting innovative financial technologies in order to become more agile.
What is FinTech?
FinTech is short for financial technology. It refers to digital financial services that are designed to be alternatives to traditional banking methods. Examples of FinTech include:
● Mobile payments
● Digital banking
● Crowdfunding platforms
The goal of credit unions is to get their brand identity to their customers at the exact moment that they can benefit from it most. Let’s take a look at three credit unions that are taking advantage of FinTech to grow and scale their organization.
Rainbow Saver is based in Lowestoft, UK, and has teamed up with two FinTech apps: The Change Account and Payment Cloud Technologies in order to provide a new way of managing transactional accounts that are designed to simplify consumers’ finances. The Change Account is a new type of transactional account that works with a prepaid debit card, sort, code, and account number. It also features a number of budgeting tools to help consumers stay on track with their spending. Payment Cloud Technologies, on the other hand, is a digital banking and payment solution that is geared towards businesses.
The chair of Rainbow Saver, Sally Chicken says that they have ended up with a better product thanks to the adoption of FinTech solutions. They now have over 600 members using the card, provide mobile and online banking, and have over 75% of their loan applications come from mobile devices.
West Community Credit Union
West Community Credit Union adopted two FinTech Solutions: Plinqt and Nest Ready. Plinqt is a mobile savings app that is known for being elegant and robust in its capabilities. Nest Ready is designed to streamline the mortgage and home buying process. West Community Credit Union says that they have experienced growth and retention as a result of adopting these new technologies. They have been able to reach their millennial audience with Plinqt and strengthened their home mortgage services with Nest Ready.
California Coast Credit Union
This San Diego based credit union is following in line with what many UK credit unions already have underway. They are utilising big data and leveraging data analytics to make their products and messages get in front of the right consumers at the right time. They are using this FinTech to aid in new customer acquisition, member retention, and even fraud prevention.
Apps such as Larky, use GPS to send relevant offers to credit union members in a timely fashion. For instance, if a member walks by a clothing store, they may get an offer on their phone providing a discount on a purchase from the store if they use their credit union debit or credit card.
FinTech is Providing Credit Unions with Never Before Seen Opportunities
The bottom line is that credit unions have to ditch traditional methods of banking if they want to grow and scale. They must look into alternative financial technologies. FinTech is helping credit unions build their brands at a rate never before seen.