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What Credit Unions Can Learn About Digital Transformation From Top Banks

Today’s lending platforms present the biggest opportunity for banking change since the introduction of the ATM.

Technology is transforming lending writ large whether you’re a bank, credit union, or brokerage. People expect intuitive, guided experiences, whether they’re on Amazon or applying for a mortgage. Your member experience is no different.

Some lenders have embraced digital lending platforms (DLPs) to evolve alongside their customers’ expectations, but plenty of credit unions are looking to see how the nation’s largest lenders are adopting the new processes, tools, and technology that drive top-line growth. As a technology partner to more than 170 U.S. lenders, we’ve seen firsthand how banks are deploying robust tech at scale and seeing promising results from the start. There’s plenty that credit unions should pay attention to and learn from.

What’s A Digital Lending Platform?

DLPs simplify the complexity of lending by providing a unified approach to managing customer acquisition across mortgages, consumer loans, and new accounts. This makes it easy for consumers to apply for loans through any channel and simple for you to offer your members additional products tailored to their specific needs.

Why Invest Now?

Banks are rapidly investing in digital transformation to create a competitive advantage, address legacy inadequacies, and protect themselves from disruption. DLPs have the potential to revolutionize how consumers engage with banks and credit unions on a scale not seen since the introduction of the ATM.

Key motivations for banks to invest in DLPs include:

  • Protecting the business from emerging threats
    Over the past few years, thousands of fintech companies have emerged, most of which compete with banks and credit unions for customers and market share. In 2018 alone, fintech companies raised over $39 billion from venture capitalists, including more than 50 investments that were each $100 million or more. DLPs help banks protect their customer bases by harnessing the skills of Silicon Valley’s best engineers without any new hiring.
  • Tapping into growth opportunities before competitors
    The proportion of digitally literate and digitally native consumers increases daily. Engaging digital experiences are key to winning their business and driving positive word of mouth. Digital transformation can also enable financial institutions to pursue other key growth opportunities, including attracting more deposits and tapping into the record amounts of equity in today’s homes.
  • Getting ahead of the next recession
    We are experiencing the longest period of economic expansion and the lowest unemployment rate in decades. Leading lenders are investing in technology now to thrive during the next downturn while others are struggling.

To Deployment And Beyond

When selecting a DLP, credit unions should consider the overall success of their project, which relies on a combination of technology, people, process, and ongoing support. Look for providers that address this full spectrum of needs and want to establish a relationship focused on your long-term success.

When the time comes to bring users into the system, define a clear plan that includes starting with early adopters before rolling out to the broader organization. Early adopters can help fine-tune the deployment and serve as evangelists for rallying teams around a new set of tools.

Want to learn more about digital lending platforms? Get our guide for credit unions.

This article is sponsored by a recognized solutions provider in the credit union industry. Callahan & Associates does not endorse vendors or the solutions they offer, and the views and opinions offered here might not reflect those of Callahan. If you are interested in contributing an article on CreditUnions.com, please contact the Callahan team at ads@creditunions.com or 1-800-446-7453.
October 7, 2019

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