As credit unions slowly tackle the emerging mobile question, one thing has become certain: members both young and old are requiring ever increasing access to financial products and services to fit their hectic lifestyles.
The challenge then is how to invest in technology that is substantive and enduring as opposed to fad based and short lived. One need only to look at the tech trends of the last 10 years to realize that social media has become as commonplace as AM radio was back in its day. But is this a trend that will last?
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In the early days of the PC, Moore’s law stated that the computing power of the microprocessor would double every 18 months. That law has stayed true up until the emergence of mobile phones and tablets. Now the question becomes one of how much processing power do you really need when weighed in against battery life and usability of mobile apps.
Subsequently, the question smart credit unions are asking what is the primary benefit going to be for our members if we offer mobile and social media services and invest in the infrastructure to do so knowing that the current trend for it may be only a few years before another technology disruption occurs.
If I were to look out into my own crystal ball, I see one trend emerging that I think could become very disruptive to all financial institutions. That trend is growth of mobile wallets or mobile electronic payments.
Companies like Google are already finding niches in grocery stores with their Google Wallet. Other tech companies such as PayPal are also beginning to offer customers the ability to exchange funds via their smartphones.
Could there also be fundamental changes in how currency and commerce are transacted in the near future? I think the obvious answer is yes. So the bigger question is if people are willing to bypass the traditional brick-and-mortar branches and opt for mobile services because it fits their lifestyle, are we also looking at fundamental shifts away from people-to-people relationships that have always been the principal characteristic behind the credit union philosophy? Will it shift more toward impersonal but convenient and quick technology options?
My answer to both questions is, again, yes.
So back to the original inquiry of how are credit unions going to address a very fluid mobile movement and all the constant evolving that goes along with it.
Simply put, they are going to have to put infrastructure components in place that can handle 24-7 demand, as well as the underlying application components to allow for near real-time decision making capabilities.
At the core of this issue, there remains a constant of the collection, analysis and assimilation of data that will drive these decision criteria. Credit unions are going to have to learn to use their data more effectively, reaching out to members to enable and empower them to transact their business 24-7. But how does one go about that task?
Core data processing systems have been promoting marketing customer information file solutions for years. Companies like Mint, Geezeo, and Money Desktop, among others, have been addressing the personal financial management market by assimilating members’ financial data and then making recommendations based on financial trends tied to members’ profiles.
With proximity systems currently being developed by the phone companies, interest levels based on how long one lingers at a shop window or the amount time spent at a mall or grocery store, will also start providing additional demographic profiles that can be used for targeting specific services and goods.
The bottom line is that forward thinking credit unions will realize building their own internal business processes and automating them is going to be one of the keys to staying on top of the exponential technology growth that smart data will drive and will keep members onboard.
One of the best sources of some key demographic data can potentially lie in a credit union’s document management system. Unfortunately, most credit unions are using very simple imaging systems to store documents and do not take advantage of immense gold mine of demographic data that can be mined with a true electronic content management system.
Most elite electronic document management systems also integrate workflow components that allow criteria based data decisions to be built on top of not only the current ECM system, but extend the capability to other components as well, giving credit unions the ability to build business process models that will allow unattended decisions to be made on an around the clock basis without the need to staff for such things.
If a credit union can define and refine their current business processes and break them down into a series of steps that can be replicated, these business process management solutions can then begin to automate a lot of the decision criteria necessary to stay on top the technology juggernaut by giving them an agile way to address trend changes quickly and easily without requiring a complete forklift upgrade on the back end infrastructure and application components every time something new comes along.
Mobile banking, mobile payment exchanges and mobile lending still require some kind of decision criteria to drive those processes. If credit unions will recognize that implementing the proper backend technology solutions, these BPM solutions can help address part of that equation by insuring the ability to change and respond quickly and economically when new disruptions occur.
Scott Cowan is vice president of sales and marketing at Millennial Vision Inc.
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