No matter the size of your credit union or where it’s located—its future is dependent on how well it adapts to the disruptive technology that is changing our industry by leaps and bounds each year.
Credit unions and their national systems in countries around the globe recognized the importance of adapting to this disruption last decade—allowing them to offer online and mobile services that drove an increase in membership.
That helped the world credit union system reach its Vision 2020 goal of increasing global credit union membership to 260 million people a full two years early. But for that growth to continue, credit union systems everywhere need to digitize key aspects of operations and service channels. This is Challenge 2025: the digitization of the global credit union system.
What is digitization?
Digitization includes automation of internal processes, access to core services by online and mobile channels, and connection to local payments ecosystems.
Why is this so important? Young adults communicate, shop, read the news and even apply for jobs on their mobile devices. They want to be able to access their financial services the same way. To attract more young members, credit unions need to be able to offer them that ability.
Where the expense of digitization challenges individual credit unions or small credit union systems, credit unions have the advantage of being able to pool their resources and cooperate in building shared platforms to provide consolidated back office processing and payment channels. This reduces the costs of responding to member demand for convenience in service—expanding a wider network of points of services and negotiating with vendors as a larger group.
Digitization allows credit unions to analyze member behavior and use of services to receive feedback for product design and service improvement. Data tracking and analytics allow us to identify member preferences, risks and needs in ways that allow us to offer the best solutions to help them save costs and to achieve their goals. This builds cooperative trust. Rather than selling them things they may not need or that might seem intrusive, we can remain their trusted institutions.
Digital data management helps credit unions identify risks as well. With digitization comes increased risk to consumer data protection and cybersecurity. This places greater responsibility on credit unions for the protection of their members and increases cost.
But again, one of the advantages of operating in the credit union sector is our ability and willingness to share resources and platforms that allow us to invest in technological systems needed for scaling up solutions, extending networks and managing these risks in the digital age. Shared platforms and strategic alliances allow us to connect to digital systems through a country’s digital ecosystem to provide the member with greater convenience, less friction and seamless access. It is about making life easier.
Doing our part
World Council of Credit Unions is using its conferences, communications, projects and technical papers—as well as its engagement, training and education programs to promote and support the digitization of the international credit union network.
We’ve even built a Digital Transformation Lab where credit unions and technology experts can exchange lessons learned and best practices in digitization.
To achieve our goal of full digitization by 2025, we must include those people in some of the world’s hardest-to-reach areas. The challenges of providing them with digital financial inclusion are great. But even there—among the poor, the refugees, the economically excluded—most are like the rest of us in one key respect: they have a smart phone. It shows how connected we all are by technology today and how digitization is one of our most powerful tools for achieving financial inclusion for all going forward.
President and CEO
World Council of Credit Unions