By Brad Powell

How do I give my members the experience they want, on the devices they want to use, both now and in the future? That's a question we hear a lot. Terence Roche wrote a blog post for GonzoBanker recently that addressed that question:

Do We Need Better System Integration or Fewer Systems to Integrate?

You should read the post ─ Mr. Roche offers some great insight. And, at the risk of oversimplifying, his answer boils down to "less is more." Taking a cue from other industries and the mass adoption of mobile devices, he writes that wherever possible, banks and credit unions should move to a single system and single interface, so there are fewer interfaces and less integration.

I agree with much of his piece. And I'd like to describe a slightly different alternative to his "single-system" proposal; one that I believe will prepare a financial institution for the future. In the future, credit union members will likely have a new set of expectations, based on the technologies they'll be using at that time. Those technologies might be smart watches, or breakthrough features in mobile apps, or some device that simply doesn't exist yet.


I'll try to explain with three hypothetical cases:

Case 1: Consumer Loan Origination

A credit union that decides to apply a single-system strategy to consumer loans would purchase a system that does everything it needs it to do today, starting with all the traditional back-office functions, such as routing, approvals, credit reporting and compliance.

And it would feature a seamless front end, as well. All customer service agents would use the system, as would members, it would be directly tied online and it would be easy to maintain.

But what happens when the next iPhone comes out, with a new payment or communication feature? How hard will it be to integrate those features and capabilities into the single unified system?

Case 2: Automotive Loans

You can imagine a single-system auto loan solution that works much like the consumer loan case above. Everything is tied together. Members can view rates and apply for a loan with a smartphone app they fire up as they wait for the salesman to come back from the inevitable visit with his or her manager.

But in in two years (or possibly even sooner), Apple Watches might change the way people expect to receive financial information. They'll want to see loan rates with a glance to their wrist and maybe even apply for the loan with the smartwatch, as well. Perhaps the credit union will want to offer them a special one-time deal?

To account for the Apple Watch, will the credit union have to overhaul its single-system solution?

Case 3: Personal Loans

By now, you probably get the idea. A credit union might want to offer personal loans via mobile to customers shopping for furniture at a department store ─ giving them an alternative to store credit.

That would work well with a single system now, but what if Google Glass finally takes off and consumers begin to use it on shopping trips like this?

In all three cases, I'm asking "What happens when people want to change the way they interact with your institution?" It's an important question to ask, because while we're not sure how members' interactions with their credit union will change over time, we know they will change.

We know because we are doing things on our mobile devices today that we never could have imagined 10 years ago. And we know new devices and new features for these devices will keep coming out, and consumers will keep adopting many of them.

As they adopt new devices and features, consumers' habits and expectations change.

And we can anticipate that at these changes will create new concerns for credit unions using a single-system solution in the future. Those credit unions need to ask themselves questions like:

● Will our single, all-tied-together system be able to adapt as consumers' devices and expectations rapidly change?

● Will our system be able to accommodate those changes, or will customers and members start to feel it's out of date and too hard to use?

● If the system needs modifications, will our vendor be able to handle all the challenges, updates and shifts that are required to keep up?

● If the vendor can't make the necessary modifications quickly enough, is a competitor going to come in and take advantage of that? How much money will that disadvantage cost us?

The alternative we suggest makes it easier to answer these questions. I'd label it simply, "One System, Multiple Doors."

The idea is fairly simple. Returning to the consumer loan origination case above, the credit union would start with a rock-solid back-office system, one that does all the things it needs, such as routing, approvals, credit reporting and compliance.

But to make sure the consumer loan system integrates well with other systems, the "doors" (built with a technique called service oriented architecture, or SOA) come into play.

For customer service agents who need to enter applications for customers, there would be one "door" to the back-end system.

If the credit union wants online members to have a similar experience to the customer service agent's, simply use the same door. But if they feel their members need a unique experience online, that's fine ─ open another door just for them. There would be two different user experiences, but the institution is running it all with the same back-end system.

What about mobile? It would operate the same way. If the credit union feels its mobile members can use the same door that customer service agents or online members use, let them use the same door. But if the decision is to offer mobile users something unique and more tailored to the small-screen experience, open another door and create that experience for them.

And when the next product or device – a Google Glass or Apple Watch app, or a secret product currently in development at Apple or Samsung ─ comes along, you don't need a massive overhaul. The pattern will be the same: If it works with an existing door to your back-end system, use it. If not, open a new door.

When it comes to giving your members what they demand, opening a few doors is more effective than forcing everything into a single system.

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Compliance and Your Credit Union

• Face an daunting burden of regulatory requests?
• Struggle to manage the multiple experts inside and outside your organization who must respond to exam requests?
• Use email for regulatory communication -- possibly opening yourself to legal discovery?
• Receive the same request more than once but provide a different answer each time?

If these challenges sound familiar, Axiaware's new credit union compliance software product, Redboard, could help.