The Members Group, in a wide-ranging webinar, offered up aprovocative view of a banking future that in lots of wayschallenges every idea credit union executives hold.

“Financial institutions do not have a God-given right to controlpayments,” said TMGexecutive Brian Day, who led the webinar on Thursday. “Alternative paymentproviders want this market.”

He pointed to Google, possibly Apple, certainly PayPal as aggressively on the hunt for thickening slices of thepayments pie. To compete in a complex payments marketplace, saidDay, “credit unions need to look at creating new value for membersand merchants.”

Above all, said Day, credit unions need a compelling mobilebanking and mobile payments strategy. “Mobile is the key technologyfor future growth,” said Day. He highlighted data that shows mobilebanking is of high importance to Gen Y and, without that youngerdemographic, credit unions literally have no future. “As anindustry, credit unions are not doing a great job attracting ayounger demographic.”

“Gen Y is adopting smartphone technology. Nearly two-thirdsregularly access the Internet with a mobile phone. Many valuemobile banking more than online banking,” said Day.

Another challenge ahead for credit unions, said Day, is thathistoric revenue streams are dwindling. “Loan demand is decreasing.There was the pressure on debit interchange fees. There may beattacks on credit interchange. And there's a challenging regulatoryenvironment,” he said.

And then there is the revolution that is transforming paymentsfrom something that happens with a plastic card to something thathappens with a mobile phone. “We are going through an intenseperiod of innovation in payments,” said Day, adding that whatshapes the revolution are three Ps: “Presence, preference,payments,” all of which can revolve around a smartphone that knows who the consumer is, where he or she is,and how they want to pay for this transaction now.

Plentiful opportunities exist for credit unions amid thisrapidly changing environment, stressed Day, but he stressed thatinstitutions need a mobile wallet strategy, an alternatives paymentstrategy, and “they need to think beyond the swipe.”

Day acknowledged that for credit unions that have prizedthemselves on their person-to-person skills with members it iswrenching to conceive of a world where at least some members wantnever to set foot in a branch. But, said Day, that doesn't meanthere isn't relationship – “build digital relationships.”

Do that and embrace mobile banking, he suggested, and creditunions will have a bright future.