Competition is getting tougher in the lending industry, and credit unions aren’t insulated from such difficulties. Rising interest rates and inflation have made consumers wary of spending more than they make, and this affects members of a credit union. Technology trends in 2023 look set to expand customers’ digital experiences within the lending market. Credit unions are now competing not only with established banks and captive lenders but also with lenders with only an online presence. These newcomers to the lending sector have embraced technology to attract customers, so credit unions will have to counter by embracing technology themselves.
As a result, collaboration between financial technology (fintech) companies and credit unions has increased. Technology can create loan opportunities and generate new income streams for credit unions, who can harness customer data to both improve services and the efficiency of their operations. For a credit union, technology trends are all about tapping into their already existing relationships with their members to personalize service.
The future has arrived, and digital transformation has become one of the most persistent credit union technology trends. 2023 looks to continue utilizing advanced analytics, artificial intelligence (AI), mobile banking, and other technologies while partnering with third-party fintech providers. It’s this partnership between fintechs and credit unions that will enhance their members’ experience with greater personalization based on data provided by members to their credit union. Technology trends are diversifying, and the delivery of lending products tailored to credit union members’ needs is set to become the ideal for credit unions now and into the future.
A Look at 7 Financial Technology Trends for Credit Unions in 2023
In 2023, an uncertain economy, higher expectations for personalized services, and the evolving role of technology in the lending sector have complicated lending for many credit unions. As the cornerstone of the credit union, technology trends must support their members on a more personalized basis, lest they seek loans elsewhere. But economic challenges are often opportunities in disguise.
With a greater focus on leveraging data, credit unions can improve efficiency while expanding the services available to their members. Key to this year’s credit union technology trends is the maturation of analytics technology, where insights are being used increasingly to promote action. There will be challenges for credit unions as they seek to integrate new capabilities into legacy systems, but there’s no shortage of partners willing to help in this regard. The challenge is just finding the right partner to implement these technologies.
For a quick reference, we have identified these 7 trends popular now and will be into the future.
|Employing Member Data Effectively||Credit unions will increasingly leverage member data to personalize products and services, identify risk, and drive growth.|
|Mobile Applications||Credit unions will continue to invest in mobile apps to meet member demand for on-the-go account access and transactions.|
|Virtual Assistants||Credit unions will adopt virtual assistants to provide 24/7 customer service, improve member engagement, and reduce costs.|
|All-Digital Transactions||Credit unions will offer fully digital account opening, loan origination, and other transactional services.|
|Personalized Digital Experience||Credit unions will provide tailored digital experiences that anticipate and meet the individual needs of each member.|
|More Self-Service Tools||Credit unions will introduce more self-service tools, including online chatbots, knowledge bases, and interactive guides.|
|Collaboration||Credit unions will partner with fintechs, other credit unions, and community organizations to enhance their offerings.|
We will discuss each in more depth below.
- Employing Member Data Effectively
Putting data into action will be one of this year’s most critical credit union technology trends. 2023 will continue to require that credit unions focus on their members’ data, but it will go beyond the usual general analysis. Instead, data can now be leveraged to improve financial wellness to support credit union members through a potential economic downturn. This might involve automated budgeting tools, providing basic financial advice via AI chatbots, and identifying concerning consumer behaviors that can affect a member’s ability to make their monthly loan payments. Additionally, credit unions should utilize member data to further augment the organization’s efficiency.
- Mobile Applications
For a credit union, technology trends like mobile applications for smartphones, tablets, and other mobile devices were once considered a sort of supplementary benefit to members that supported in-person services at the branch. Yet for many members, especially since the COVID pandemic, mobile options have become a “must-have” service. To prevent member attrition and to keep customer satisfaction levels high, credit unions need to adopt mobile services that are both helpful and easy to use. This may even involve empowering members by providing customer service staff with tools like interactive tablets that allow access to customer data to assist members with any issues. The good news is that there are already reliable, third-party partners that can provide tried and tested mobile services.
- Virtual Assistants
Like mobile apps, virtual assistants within branches look like they could be one of the central credit union technology trends. 2023 will bring virtual assistants with capabilities that make them able to perform tasks once done by humans. Credit union branches will remain critical elements of their business model, but along with human employees, customers will have access to virtual assistants who will be able to resolve ever more complex issues.
- All-Digital Transactions
What if a member could apply for loans, manage their accounts and engage in other financial transactions, all without visiting the branch of their local credit union? Technology trends point towards this becoming an increasingly common reality, and the COVID pandemic already proved that digital transactions are the future. Investing in such technology will only strengthen credit unions’ competitive advantages over other lenders. Digital tools have already largely replaced manual processes with online loan applications, e-contracts, e-signatures, and other digital transformations.
- Personalized Digital Experience
Whether via e-mail, online chats, social media, or other digital avenues, all loan customers want a more personalized digital experience. Credit unions should look at those digital tools that really matter to their members, delivering services that use data analytics to provide personalized insights, improve efficiency and even offer real-time advice. Offering services that are oriented towards a credit union’s members gives them a competitive edge over other lenders, as their generally personalized approach to doing business does as well.
- More Self-Service Tools
Along with digital transformation come self-service tools, which is one of the constantly evolving credit union technology trends. 2023 looks to continue this, with some credit unions even introducing digital tools that let their members shop for vehicles through preferred dealer networks. Other credit unions allow members to go to a dealership with documents that show they’ve already been approved for an auto loan. These sorts of services make credit unions more than just lenders but also valuable partners to their members. Moreover, if these self-service tools are easy to use, this gives an even bigger advantage to a credit union as technology trends towards simplicity.
Even though some credit unions still prefer in-person service, there’s a growing need for the flexibility that mobile and digital solutions bring to the table. Being essentially local, credit unions often don’t see themselves as lenders who need to offer cutting-edge technological services. They rather count on their personal relationships with their members. But credit union members are just like any other consumer. By looking at where credit union technology trends, they can adopt the services most useful to their members. To do so, however, doesn’t require a huge investment but rather a productive, collaborative relationship with a fintech company that can scale the technology for a credit union’s members’ needs.
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