The biggest digital banking trends we've seen so far in 2017

Digital banking continues to change the way people manage their finances, and it is increasing in capability and adoption. Digital banking platforms are no longer an emerging trend in the financial industry – they’re becoming the norm for conducting transactions. They are, however, becoming increasingly sophisticated and accessible.

Here are the biggest trends we’ve seen in the digital banking space this year:

Cutting-edge data analytics. Credit unions are using member data in powerful ways that benefit both the credit union and member. By leveraging existing data, credit unions can analyze member behavior and tailor the products and services they recommend, which deepens relationships and increases revenue. Analysis of “big data” is becoming more advanced, allowing for personalization that members desire from their credit unions. 

Digital payments and mobile wallet. According to the Pew Research Center, 77% of Americans own a smartphone. Although branches are still important in building member relationships, the reality is that customers expect to be able to complete their banking transactions online. Mobile wallet is also increasing in popularity. People expect to be able to make payments with the click of a button, not with a credit card or check. Demand for these services will only increase.

Streamlined digital banking experience. A consistent, easily accessible digital banking expense is a must. According to the 2017 Digital Banking Report, improving the digital banking experience is a top priority for financial institutions. Customers expect to conduct transactions seamlessly across devices anytime, anywhere from an intuitive platform. They also expect access to help should they need it, in real time (e.g., a chatbot). 

Gamification. Many financial institutions are implementing game-like activities to incentivize their members toward certain behavior, as well as educate them on financial literacy. Relationship pricing (or loyalty programs) use gamification to inspire loyalty (think: points toward a reward like a lower loan rate for adding on additional services at the credit union). It can also be used to encourage behavior like depositing into a savings account or making a loan payment on time.

Prevalence of open systems. Legacy systems are being phased out to make way for open architecture systems that can be updated more easily and efficiently. Open systems allow for new software to be applied at a quicker rate, which is essential considering the rapid pace at which new technologies are developed. Open systems continue to replace outdated models. Customers want to be able to manage all of their finances from one interface – adaptability and integration with third party software are key.

When thinking about adopting new technology at your credit union, consider implementing these measures – they create a better experience for your members, and in turn inspire loyalty and engagement. Staying ahead of digital banking trends will help you outdo the competition and attract and retain the membership you want.

David McCullough

Senior Solutions Manager

EPL, Inc.

Legacy vs. Open-Architecture Core Systems – When is it time to Migrate?

Financial institutions often operate from software systems that have been in place for many years. While the “old” technology may still work, legacy systems that aren’t compatible with changing technologies can cause big headaches for those that must work in them every day, as well as their customers and vendors. If you’re operating on a closed system, you might consider upgrading if:

1. Your software can’t keep up with new technologies. Legacy systems simply aren’t designed to be compatible with new technologies. Considering the pace at which innovation occurs in the tech sector, this is a big problem. If your system is closed to future development, you will be stuck behind the curve of innovation. An open-architecture system allows you to connect with current technologies and be prepared for inevitable future developments.
2. Upgrades are cumbersome and time-consuming. Updates on legacy systems are often time-consuming because a “small” change to one component affects many other aspects of the system. You can’t apply a simple patch and move on – everything must be reworked. Open systems are adaptable and can be modified incrementally over time with quicker updates.
3. Costs of maintaining your legacy system are too high. Upgrading and maintaining a legacy system is typically more expensive than adding capabilities to an open platform. Adding on new technology to a legacy system creates a disjointed patchwork of components that become more complex and therefore more difficult to operate over time.
4. You are experiencing cybersecurity vulnerabilities. Hackers and other malicious actors are constantly looking for new ways to exploit systems and steal valuable company information. Legacy systems cannot address these threats in the same way that an open, flexible systems can. Because changes take longer to apply to legacy systems, company data can be exposed for a longer period of time.
5. Your software can’t evolve with your business. Software that is customizable to changing company needs is critical to ensure efficient work. An open core allows you to be more flexible with your technology and update it as the business landscape changes. You must be able to meet your customers and vendors where they are in the digital realm.

An open-architecture system allows for seamless integration of the latest technologies. Your credit union needs the capability to add on future technologies and products to stay relevant and engaged with your members. Legacy systems are a thing of the past – it’s time to be out with the old and in with the new.

Rhiannon Stone

COO

EPL, Inc.