Credit Unions Can Ride Disruption Wave
In a rapidly expanding financial services marketplace characterized, credit unions have a good chance to capitalize on a growing wave of service disruptors, provided they can clearly differentiate their value proposition.
That advice came from a Tuesday panel discussion at World Council’s World Credit Union Conference in Gold Coast, Australia. Dubbed "Catching the Disruption Wave: Three Big Ideas for Serving a Radically Changing Marketplace," the panel brought together three primary disruptors from Australia, Canada and the United States to provide outside perspectives on credit unions' futures.
Panelists included Alan Shields, co-founder and managing director of RFi Intelligence, Australia; Alex Sion, president of Moven, USA; and Amy ter Haar, CEO of Flow, Inc., Canada. Effie Zahos, editor of the Australian edition of Money Magazine, moderated the panel.
"This is an existential moment for credit unions – to redefine your basic product and core value proposition," said Sion, who asked the audience to reconsider his app-centric business as a potential partner, rather than a disruptor. "Credit unions must ask themselves what family and community mean in this digital era. The future of the model is to maintain the community aspect, but disrupt the physical distribution model."
To some panelists, the best practice model could be achieved through shared platforms among different credit unions, and potentially nontraditional market entrants.
"We need to get connected if we want to [financially] include everyone, everywhere,” ter Haar said, noting credit unions' mission to provide nondiscriminatory financial access to all. “It's not us versus the banks. It's lateral and peer-to-peer. We are stronger together."
Disruptors' impact on small credit unions also warranted discussion from the group, as did the need for gaining member trust to use mobile products. Credit unions are better positioned than banks to gain member trust because trust is inherent in the model, Sion said.
All panelists agreed that credit unions' strength lies in their localized community service and identities, but that they must make themselves relevant to a new generation of people with expanded communities made possible through technology. The physicality inherent in managing small communities is inappropriate and cost prohibitive in this era, Sion said.
"Credit unions will have to juice up their value proposition, combine to survive, or transform how they distribute products to customers," Sion said. "It would be a sad world if credit unions don't win. We'll lose that community and authenticity."