United Solutions Chief Information Office, Sajed Khan, discusses the technology gap between larger credit uninos and smaller credit unions. Check out the article at CUToday.info!
One expert is concerned that the gap is widening between the “haves”—those CUs that are growing and advancing thanks to technology, and the “have-nots”—those that are falling behind.
“With every passing year, the gap between the leaders and laggards of the credit union industry is increasing significantly in terms of usage of technology,” said Sajed Khan, senior VP and CIO of United Solutions. “The large CUs are keeping themselves well up-to-date with the trends of information technology support.”
Khan said that credit unions should only expect the pace of technology advancement within financial services to accelerate, as well as consumers’ reliance on tech to access their FI. He outlined some key trends to watch for this year, noting first how the rapid rise of mobile banking is boosting credit union membership.
“With an increasing number of people using technology to reach their credit union, an exponential increase in membership growth is expected,” Kahn said. “The younger generations are becoming sophisticated in publishing apps with Google Play and the Apple Store, and we’ve seen an influx of IT companies launching dedicated mobile apps and software programs for different CUs. These apps and software programs provide easy access for consumers to reach the credit union. With the simplicity of one-click access, not only have we seen membership growth rise, but feasibility of services and speed of delivery, as well.”
CU Industry Website Visits Up
Kahn said data shows that the number of people visiting credit union websites has increased by up 19% since the emergence of dedicated mobile apps.
But it won’t be just consumer demand requiring credit unions to further leverage technology. Kahn is seeing credit unions this year making much bigger investments in technology, and in partnerships with technology companies, to address the growing compliance burden.
“Did you know bank and credit union executives are planning to invest 30.9% more in technology to ensure compliance? And 63% of these executives cited regulatory risks as a top concern?” he said. “We have seen a growing demand for technology companies to partner with credit unions to address this issue. CUSOs are determined to find solutions to these challenges—to make sure that CUs meet compliance requirements.”
Kahn noted that KPMG research shows that at the end of 2015 33% of CU executives were planning to partner with IT support companies to help them cope with compliance.
Kahn recognized how new NCUA data security standards and credit unions’ own concern for their members’ data is stepping up network security expenses.
“Handling the problem on your own is impossible for any FI to deal with,” said Kahn. “With the danger of identity theft and fraud increasing globally, United Solutions has invested heavily in various security perimeter devices to protect the intellectual property of our clients.”
Hard To Go It Alone
Kahn added that it is getting difficult for credit unions on their own to keep pace with the rapid rise of mobile banking.
“Research shows that by the year 2018, about 150 million adults in the United States will be frequently using some type of technology for financial purposes,” Kahn said. “By the end of 2014, 60% of credit unions were providing services through mobile networks. This percentage is expected to rise to 88% by the end of 2016. The convenience of having information at your fingertips will drive more consumers to more on-line use. By partnering with a CUSO, credit unions can focus more on their core business, rather than technology advancements and R&D.”
Over 97% of financial services CEOs say innovation is a key priority for growth, explained Kahn.
“With the increasing sets of challenges that the CUs have to face, collaboration with a CUSO can provide manageable solutions to these challenges,” he said.
