The financial facts of life loomed large this year in the tech world, from both a member-facing and back-office perspective, according to Scott Butler, president of Credit Union Solutions at Fiserv Inc. in Brookfield, Wis.

"As we all know, credit unions have been hit so hard with assessments from the share insurance fund and the corporate stabilization, so hard that it has effectively wiped out half the industry's income this year," Butler said.

"All this has our credit union clients holding onto their wallets a little tighter but still looking for ways to reduce costs and really drive efficiencies," he said. One way they're doing that is outsourcing more than ever, he said, noting that at his organization, for instance, new service bureau contracts for core processing are outpacing in-house signings by four to one.

The search for efficiency in 2010 also often included integrating member service delivery channels while introducing new ones. Butler noted the rapid adoption of his company's ZashPay P2P solution-more than 200 credit union sign ups in less than a year-while announcements of new deploys of RDC, including mobile, flowed like wine for vendors of that service.

Integrating those services efficiently was both a business and deployment consideration in the past year, as some big players bought small operations that were front-runners in new channels. That included Jack Henry & Associates' takeover of bill pay pioneer iPay Technologies earlier this year and Harland Financial Services' December acquisition of account opening and funding specialist uMonitor.

In addition to cashing in, "there were a lot of areas where pure-play technology vendors were really innovating," added Roy at CUNA Mutual, "and there's more on the way." He noted for instance the rapid adoption of iPads and the "truly unprecedented release of new devices, nearly a dozen tablets alone, that we can expect to see in the next few months."

All these ways of connecting credit union members to their accounts-and credit union employees to their networks-also create a new wave of concern about an old problem-IT security and compliance.

One big credit union got a head start on what could someday be standard fare on the compliance menu-chip-enabled credit and debit cards. The $3.2 billion United Nations FCU rolled out Visa cards carrying that security measure to about 7,000 members in 2010, a move that puts the CU's international membership more in line with standard card practices, for instance, in Europe.

"Regular card volume there had been declining for some time so it was time for us to do it, although it did involve some interaction with Visa and [security vendor] Gemalto," said Prasad Surapaneni, chief information officer at UNFCU. "We're getting ready for PCI reviews right now, and we'll be putting encryption in place on our cards next year, so we're really getting ready."

Surapaneni's other challenges in 2010 included working on mobile banking, a task made more difficult by domestic vendors' inexperience with international numbers, he said, and rolling Windows 7 at his credit union's 500 work stations at offices in New York, Switzerland, Italy, Austria and Kenya. "It'll be an interesting year," he said.

"These are interesting times," added Roy at CUNA Mutual. "All these great new technologies create great opportunity but they also create challenges that can be bad if left unchecked," he said.

That kind of bad is what keeps people like Tom Oscherwitz busy. He's the chief privacy officer at credit and identity risk management specialist ID Analytics in San Diego, Calif.. He said that, in addition to all the well-reported cyber attacks and thefts, one new concern he saw developing this year was concern about the potential "friction" created by fraud prevention efforts.

"We're hearing concern about how barriers being used to prevent fraud also can create friction, create barriers to service," Oscherwitz said. "We're being asked to really grease the wheels to streamline verification for good customers."

Balancing the back-office necessities of third-party integration, security and compliance with the front-facing member experience also became a top-shelf concern for big shops in 2010.

"Integration has been our bread and butter, especially as it relates to the core applications, and we're now really working to find ways to increase our speed to market with new products and services," said Pat Valentino, senior vice president of real-time solutions at global integrated solutions provider FIS in Jacksonville, Fla.

"A challenge continues to be balancing the backroom versus member experience," she said. "I think that credit unions historically feel the need to own the product in order to control it but having all that ownership inside the credit union walls can make it more difficult to get a product to market quickly and improve the member experience. But we're seeing a shift in that, and more of our credit union customers are now embracing the fact that they don't have to own it to control it."

The new way of thinking also often means "out with the old and in with the new," added Ron Daly, founder and CEO of DigitalMailer in Herndon, Va., which began in 2000 as an e-statement provider to credit unions and now has 184 customers using its e-mail, e-statement and e-marketing solutions.

"We saw credit unions replacing old stuff with new stuff in 2010, upgrading their technology and gearing up for financial services 2.0, which includes moving toward social media 2.0," Daly said.

He said the proliferation of smart phones and up next, tablets, is just beginning to be truly felt by credit unions.

"I see in 2011 a new focus on strategy as credit unions try to figure out how to use all those different channels for connecting with Gen Y and younger, whether it's Facebook or online, through the iPhone or iPad or whatever," he said.

"The question that will have to be answered is how to bridge the old world to the new, and how to communicate with all these new consumers," Daly said. "Credit unions are already starting to do a lot of work in those areas."

And while 2010 was better than 2009, 2011 should see continued improvement, said Jay Johnson, executive vice president at Callahan & Associates in Washington, D.C. "We just got our third-quarter numbers, and they indicate a continued improvement in the fundamentals. Net interest margins are up, provisional expenses are down, earnings generation is getting stronger. Credit unions in general have a financial profile that remains very solid, and, amazingly, it just keeps improving, even with assessments and everything else."

Johnson said Callahan surveys and extensive interaction with the credit union industry showed "the whole environment of efficiency is still important and a focus for a lot of credit unions, and that's where their investments are going. Home banking continued to be the No. 1 area in 2010, because that's an area where credit unions think they can continue to get the most self-service channel benefits."

And, bottom line, he said, "credit unions are again saying, 'Yeah, we can put our resources toward technology again because we know it's critical for our operations and for how we interact with members.'

"And because credit unions don't worry that much about quarterly earnings, they're going to be making these investments with an eye toward building and maintaining these long-term relationships."