The Future of Digital Banking: Trends Credit Unions Can’t Ignore
With 57 million mobile banking users in the U.S., credit unions cannot ignore the importance of digital banking if they wish to scale and attract and retain members. With millennials constituting the largest portion of the U.S. labor force and being more technologically experienced than older generations, digital banking services are expected to grow as rapidly as technology advances. To mitigate the risk of becoming irrelevant to this new wave of potential customers, here are some of the top digital banking trends in technology and member engagement that all credit unions should consider.
Adopting the Cloud for Personalized Banking
Ninety percent of respondents to a survey conducted by Epsilon indicated that in relationships between consumers and brands personalization is appealing. Lumin Digital uses cloud-native technology to deliver a customized banking experience enabled by member data and predictive analytics. The technology allows you to tailor guidance on saving money, provide spending insights and customize actionable alerts based on the user’s unique needs and behaviors. The technology is designed to anticipate members’ needs. It’s the kind of personal connection one might expect from visiting a branch but receive without having to go anywhere.
According to the Pew Research Center, almost three in 10 Americans have stopped using cash for their typical weekly spending. The younger generation may also be responsible for this shift, as an Accenture survey found that 68 percent of Gen Z consumers are interested in instant person-to-person payments — more than any other age group. Credit unions must be strategic about answering this demand by offering solutions like mobile payments without the need of a credit or debit card. Last year, Bank of America reported that in under nine months, clients sent and received a total of 163 million transactions through Zelle, an increase from 157 million transactions the previous year. This indicates person-to-person payments are here to stay and form a digital trend not to be ignored by credit unions.
AI and Machine Learning
Within six months of launching Erica, a natural language/artificial intelligence-based chatbot, approximately 45 percent of Bank of America’s customers were using it. This impressive adoption rate has propelled a trend of AI-powered chatbot solutions across multiple banking organizations, reducing costs and accommodating increasingly tech-savvy consumers. Designed to replace phone, email and face-to-face conversations, chatbots provide fast service and transactional support for straightforward tasks such as balance inquiries, bank account details and questions about loans. More advanced chatbots with access to consumer data provide credit scores, set and manage budgets and generate new accounts, resulting in more engagement and trust between financial institutions and consumers. AI chatbots save consumers time and reduce costs for institutions. According to a Juniper report, chatbots will be responsible for over $8 billion in annual cost savings by 2022.
Because banks and credit unions handle high amounts of commercial and consumer data every day, they are naturally targets for hackers. With security being the top factor consumers consider when choosing a financial institution, enhanced cybersecurity is a trend that will continue to evolve as tech evolves. AI makes an appearance again in this area, as it is being used to detect and prevent fraud by monitoring customer behavior and profiling customers individually across their locations and devices. Based on the monitored behavior, the software is capable of providing actionable intelligence with recommended decisions —combining security and personalization for digital experience that prioritizes safety better than ever before.
Lumin Digital uses cloud-native technology to quickly detect suspicious behavior through data analytics and threat intelligence along with strong encryption to keep data safely stored. And with automated delivery pipelines, real-time responses keep evolving digital threats at bay so consumers can rest assured their information is safe and secure at all times.
Learn more about the digital banking solutions pioneered for credit unions at Lumin Digital today.