NCR's purchase of Digital Insight could bring credit unions a further ability to integrate financial transactions, according to an analyst for the Aite Group.
NCR purchased the online banking provider to roughly 1,000 financial institutions, 330 of which are credit unions, for $1.65 billion earlier this week.
David Albertazzi, senior analyst for Boston-based Aite, stressed that the purchase only provided NCR with an opportunity for integration and no guarantee of success, but he added that the arrangement could allow credit unions partnered with NCR to take on some abiding problems facing U.S. financial institutions.
For example, a credit union using NCR software to run its mobile banking, online banking and ATMs could enable members to effectively use the ATM to send funds to other people who aren't credit union members.
“A member might be able to go onto their online banking site or use a mobile application on their phone to prearrange for money to be disbursed from an ATM to a person who has a given token or code,” Albertazzi said. “They might even be able to prearrange for the denominations to be disbursed, depending on the limits of the ATM.”
Such an arrangement could allow credit unions to offer an effective solution to the issue of real-time person to person fund transfers across different financial institutions, Albertazzi said.
NCR's purchase of DI could also allow credit unions, if they so chose, to move to having one provider for a number of different transaction platforms and types instead of using multiple providers which carry a heavier regulatory burden, Albertazzi pointed out.
But he added that this might be a two-edged sword for NCR.
Larger credit unions or banks might want to have online banking or mobile banking solutions which are more customized, and such customization has not been seen as a DI strength. This could lead them away from having one firm provide ATM, online banking and mobile banking software while smaller financial institutions might opt for having NCR provide multiple solutions, he said, and NCR could find it challenging to serve such a diverse customer base.