Connectivity Technology will Create Credit Union Opportunities in 2024
With the introduction of the Credit Union Amendment Bill, will 2024 be the year when the credit unions challenge the banking sector?
Demand for credit union services in Ireland is surging. Always a popular alternative to traditional banks, credit unions now account for 40% of all personal lending in the market. Mortgage and small business lending is growing too – by 20% and 25% respectively.
Recent years have seen technology transforming the financial services industry. In order to compete with new FinTech-based market entrants, as well as traditional financial institutions, credit unions (CUs) realise winning marketshare means investing in advanced communication and connectivity technologies.
The Credit Union Amendment Bill
The Credit Union Amendment Bill, signed into law by the President Michael D. Higgins in December 2023 will provide a solid foundation for the continued growth and success of credit unions. At a time when the mainstream banking market is shrinking due to the exit of institutions such as Ulster Bank and KBC, customers will now be able to look to credit unions to handle all their personal banking.
At the core of the bill will be the ability for credit unions to collaborate and co-lend. This means that CUs can pool their resources and invest in back-office functions and other infrastructure. Credit unions will be able to compete more effectively in the credit card market and two million credit union members will have potential access to a current account with Google Pay, Fitbit and Apple Pay functionality.
For the sector, this will mean significant opportunities, but, to make it all happen, robust, reliable connectivity solutions, such as SD-WAN and cloud computing services will be key. Business as usual with legacy technology simply won’t be sustainable.
Customers expect more
The nature and form of customer service is changing for CUs as consumers increasingly demand access to products and services online, in real time. Customers now expect choice, ease of access, fast decision-making and consistent, excellent service across multiple channels.
As a result, in 2024, credit unions will look at new ways of how they can use technology to improve experiences for their members. They must review their tech stacks and the channels they use – omnichannel is now the norm. CX and advanced contact centre solutions will help deliver the service and the operational functionality that CUs need to compete strongly in the financial services market.
Cloud-based services designed for innovation
Credit unions have tended to lag behind other financial service providers in adoption of cloud-based platforms. However, that is now changing as CUs launch innovative new customer-centric services.
By helping credit unions move away from legacy infrastructure, cloud migration removes the need for in-house platforms, physical services and on-site IT personnel. With cloud computing, CUs can be faster and more responsive when responding to customer needs. It can also help reduce costs.
And at a time when digital banking is the norm, cloud-based data management can help centralise and structure data for improved collaboration between sites. It’s also scalable, allowing credit unions to use ever-expanding data sources to extract insights for decision-making and personalising the customer experience.
Credit union compliance and cybersecurity
The financial sector is one of the most heavily regulated industries and credit unions must put systems in place to stay compliant. Moreover, cyberthreats are on the rise and fewer sectors are more susceptible than financial services. The latest connectivity technologies come with solutions that can mitigate the risk of attacks, including ransomware, phishing and distributed denial-of-service (DDoS).
Resilience and security will remain key challenges in 2024, but with the right connectivity solution in place, should one CU branch go down, others will remain unaffected. With the number and complexity of digital transactions increasing, partnering with an experienced connectivity solutions provider means improved measures for compliance, disaster recovery and scalability – integrated from the outset.
Connectivity: the key to credit union success in 2024
With much infrastructure reaching the end of its life and new legislation opening up new opportunities for CUs, now is the ideal time for credit union leaders to review their infrastructure and look for connectivity partners with solutions that can maximise marketshare and growth.
An uncertain economic outlook, increased expectations from customers, and the introduction of innovative new services and products will have a significant impact on Irish credit unions this year. Institutions must keep pace with technology in order to provide customers with the service they demand, mitigate cyber threats and expand membership in new markets.
Partner with DigitalWell to futureproof your credit union’s technology and make the most of the exciting opportunities coming in 2024. Talk to an expert today about how our connectivity and cloud solutions can help your credit union succeed.
