MADISON (12/23/10)--Information technology budgets are rising at credit unions, and member-facing technologies already capture a large part of the money spent, which makes it essential to spend wisely, says a new report from the Filene Research Institute. “The Future of Member-Facing Technologies in Credit Unions” advised credit unions to focus their attention in three areas:
* Financial advice and guidance--Personal financial management (PFM) tools like Mint.com and the constellation of similar services are more than juiced-up budgeting tools; they allow members an accessible and intuitive way to see their money, said the report. But more important for credit unions, they can help members make good decisions, they can provide excellent cross-promotion value for the credit union, and they can save on staff time. * Social networking integration--Social media have become popular at credit unions, but they are not always effective at driving business results. That will change as credit unions zero in on applications that actually encourage desired behavior among members and potential members. * Purely mobile apps--Perhaps the most important of all emerging technology areas, mobile apps offer features already in demand by consumers.
What are the implications for credit unions? Even the best technology doesn’t create an edge in a strategic vacuum, said Filene. Report author Ron Shevlin, a senior analyst at Aite Group, proposed three scenarios based on the seminal 1997 book The Discipline of Market Leaders
, by Michael Treacy and Fred Wiersema. The report said credit unions should prioritize very different technologies depending on which of the following strategies most closely matches their own:
* Operational excellence--Processes are optimized and streamlined to minimize cost and provide hassle-free service. This strategy demands purely mobile apps and cost-saving social media. * Product (or service) leadership--A focus on the core processes of invention, product or service development, and market exploitation. This strategy emphasizes connective social media and cutting edge mobile apps. * Customer intimacy--An obsession with the core processes of solution and relationship management. This strategy prizes streamlined ways to offer remote and detailed financial guidance.
Credit unions, Shevlin argues, can leverage any of the three strategies for a focus on member advocacy. But they can’t wait five years to decide on which option to choose, because credit union members are online at this moment, searching websites and app stores for services that meet their needs.