Technology, Neuroscience and Delivery Channels
I hate cash.
It's filthy and it stinks. Do you know where those bills and coins in your wallet have been? How many people who handled them didn't wash their hands after using the bathroom or passed along cold germs?
My hat is off to tellers who work the front lines. I can barely count the contents of my own wallet without gagging. They deserve hazard pay, in my opinion.
Cash is also expensive and inefficient. I remember learning for the first time how much it costs to hire an armored truck service to refill an ATM. Until then, I had always assumed access fees were about profits, not covering costs. What an eye opener.
But plenty of folks in my parents’ generation prefer cash. My parents have come a long way over the past 10 years with debit cards, but most born before 1945 prefer the payment methods they used as young adults.
Cards are next on my undesirable list. My wallet is always stretched to the breaking point thanks to two debit cards, two credit cards, a health insurance ID, my driver's license, a flex benefits card, an HSA debit card, a AAA card and waaaaay too many frequent buyer cards from supermarkets, restaurants and clothing stores.
If all of those cards were replaced with mobile apps, which I would prefer, I would risk exposing it all if my phone were stolen. But my phone has a security code. My wallet opens right up with no struggle at all. In fact, thanks to all those cards, I struggle to keep it closed.
A credit union CEO friend, a baby boomer on the cusp of retirement, told me, “They’ll have to pry my credit cards out of my cold, dead hands.”
Her single-sponsor is an international engineering firm, and for a relatively small credit union, she provides her members with cutting-edge technology. But personally, she has zero interest in mobile payments. I think that's pretty common for boomers. Like the cash usage of the Silent Generation, cards are what she used as a young adult, and that's where she’ll stay.
I had a similar conversation once with NCUA Chairman Debbie Matz.
“Who in the world would use online banking when mobile banking is so much better,” I ranted. “What's wrong with people who cling to such outdated, inconvenient technology?”
“I like online banking,” she replied. “I think it's very convenient.”
Well played, Anderson.
When I became a parent, I read as much as I could about brain development. One thing I learned is that the habits you develop in your teen and young adult years – good and bad – stick with you throughout your life.
That means if you weren't required or allowed to get a job in high school, or didn't work while attending college, you didn't develop critical multitasking skills. You may never catch up to the skills of those who worked their way through school, because you missed your development window of opportunity.
That neuroscience may explain why credit unions are faced with providing such a wide window of access methods to members, as each generation prefers their legacy technology.
My CEO friend laughs at me when I lecture her about the need for credit unions to embrace new technology.
“For years, I’ve been told checks were history,” she said. “But I still process them, and that won't change overnight. Same goes for cards.”
So while the slow pace of technological adoption might drive me crazy, I’m fighting millions of years of brain evolution.
Still, knowing generational proclivities for different access channels, there's no way credit unions are going to attract Gen X and Y with boomer technology like cards and online banking.
Not only do credit unions miss the mark with young members when they’re not up to snuff on technology, they fail to attract good employees, too. One of our sister publications reported from an HR conference that 70% of job seekers use mobile devices to search for positions. However, even among companies that consider themselves to be talent-centric, only 34% use mobile channels for recruiting.
While it's difficult to provide access channels that make multiple generations happy, that kind of technology mismatch is inexcusable.
Organizations that capture that gap will thrive.
Others will go the way of checks, and eventually, cards.
They may not be dead yet, but the future isn't very promising, either.
Heather Anderson is executive editor of CU Times. She can be reached at 202-370-4822 or firstname.lastname@example.org.