Ted Bilke, president of core provider Symitar, a division of the Monett, Mo.-based Jack Henry & Associates, offered several 2017 trends and predictions that could impact credit unions directly or indirectly.

1. Growth Strategy

Geographic expansion will continue. “Larger credit unions will reach into more expansive regional territories, especially if the NCUA allows credit unions to expand their charters.”
M&A consolidation will continue its steady pace for credit unions below $50 million in assets.
The small business market will grow among credit unions, with more institutions seeking to grow and diversify their portfolios through member business lending and deposits.

2. Channel Strategy

The digital channel will continue its rapid evolution with further advances in user experience, adaptability, functionality, and channel integration. “The channel will help credit unions break into new geographic regions.”
The buy button, an easy way for members to discover and purchase products in real time, is in high demand. “More members and businesses will prefer to open accounts digitally, pushing credit unions to offer more efficient onboarding options.”
Chatbots offer promising enhanced artificial intelligence and natural language capabilities. This makes the solutions more applicable to a variety of financial services in 2017 such as collections, customer service, payments, and savings or personal financial management solutions.

3. Lending

Current Expected Credit Loss compliance changes will expedite the issue of data integration. The need to integrate data from disparate support systems with core processing systems will have added benefits for credit unions well beyond 2017.

4. Blockchain

Cross-border payments based on blockchain/distributed ledger technology will gain momentum in 2017 with multiple implementations taking place across the globe. Other promising use cases include identity management/authentication, micropayments, and smart contract functionality.

5. Open Systems

APIs will enable more targeted offerings that rely on existing core infrastructures and growing partnerships with fintech leaders. “The core systems that focus on ease of integration with third parties and a better user experience stand to gain the most traction. Anticipate analytic offerings to provide new and valued services.”
New models of shareware will foster more collaboration between credit unions and their fintech partners, and promote efficiency in new technology advances.

6. Risk and security

New authentication tools will begin to replace the standard, stagnant password.” Credit unions are adopting layered security with multiple, and convenient biometric authentication tools.” Expect to see services such as MasterCard Identity Check, payments via photos, gain traction as part of a layered security approach.
Cyber resilience strategies will become a more formal demand from federal examination agencies as they increase expectations for credit unions to mitigate reputational damage and financial losses caused by cyberattacks.
Cloud adoption will continue to grow among credit unions as a way to provide better security, flexibility, scalability, and business resiliency. Cloud services will begin to offer more control than traditional outsourcing models.

Instant Insights /

Credit Union Strategy & Risk Trends to Watch in 2017

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