By Brad Powell
I’ve spent some time this past year writing about the rise of mobile banking services and what it means for credit unions and banks. Whether it’s Apple Pay, opportunities with auto loans or the emergent alternative lending industry, it’s apparent that financial institutions will be spending more time devising mobile solutions in 2016 and beyond.
It’s an area that changes quickly. So I try to keep up with the news.
Today’s post rounds up three articles I read over the last several days that contained insights about the state of mobile banking at the end of 2015. I encourage you to click through and give them a read, and let me know what you think on Twitter, or in a LinkedIn Group such as Credit Union Insight, Credit Union Times or Bank Innovation. I will definitely respond!
By Brad Powell
There are 83 million millennials in the United States.
That, of course, is why so many businesses are courting these 15- to 33-year-olds. And why so many blog posts are written about them.
I have been thinking about millennials as potential credit union members a bit lately (I’m hardly the only one). Perhaps it’s because, in a survey Axiaware recently conducted for credit union decision-makers, we asked respondents to rate the importance and urgency of adding millennials as members. (Read about the survey results here.)
In the meantime, I wanted to share three tips published recently on attracting millennials that I thought made a lot of sense:
By Brad Powell
Welcome to the third in our series on alternative lending. Previous installments have covered the basics of alternative lending and the ways traditional lenders are responding. This post looks at the areas where the most opportunity seems to lie for banks and credit unions who want to compete in this space.
If you were to ask Larry Summers, the former U.S. Secretary of the Treasury, where the greatest opportunities rest in alterntive lending, his answer would likely be two words long: Small business. Summers has gone so far as to predict that eventually, alternative lenders could capture 70 percent of the small business lending market.
"This is a challenging time for the American economy," Summers was quoted as saying in Inc. "The conventional financial sector has, in important respects, let all of its main constituents down over the last generation, and technology-based businesses have the opportunity to transform finance over the next generation."
By Brad Powell
In a blog post last month, I broke down the three reasons that the line of business and IT departments at many credit unions can't get on the same page. Those reasons can be summed up as:
- The vastly differing level of detail each side offers and expects when discussing a project;
- The different ways the two organizations define the desired results of a given project; and
- A difference in the language each side uses when talking about technology.
Given that these differences exist, the next logical question is "How can a credit union solve them?"
What follows are my suggestions on fixing each element of the disconnect between the line of business and IT:
By Brad Powell
I recently wrote a post looking at the relatively new phenomenon of alternative lending. Today's post looks at how banks are responding as alternative lenders start to see success.
In a recent survey, just seven percent of banks said they felt alternative lenders posed the greatest threat to their business. But that doesn't mean some traditional lenders aren't responding.
The responses banks and credit unions have come up with fall into two broad categories: competing with alternative lenders head-on, and investing in them.
And some traditional lenders are doing nothing. So far.
By Brad PowellAre you paying attention to all the media coverage devoted to alternative lending?
It's tempting to dismiss, I'll admit. The media seems to identify an "Uber for [fill-in-the-blank]" every week, in nearly every industry. "Alternative lending" sounds as much like a buzzword as an actual factor in the financial industry.
But alternative lending is more than a buzzword. Much more. It may account for a small segment of the U.S. lending market today, but its growth is worth noting – and it offers many lessons to banks and credit unions.
What follows is the first of what I expect will be four posts on alternative lending. This post covers the basics: What exactly do people mean when they talk about alternative lending?
By Brad Powell
When I speak with line of business leaders at credit unions, it's not uncommon to hear them say things like, "My IT shop is really hard to work with."
And when I speak with the IT department at credit unions, I often hear them say, "You know, the line of business doesn't really understand the complexities of what we have to do."
Sometimes, I share this observation with people I meet from other industries. They almost always shake their head and say, "I know, that's how it is at our company as well."
So it's clear to me that credit unions are not alone when it comes to the perceived misalignment between the line of business and IT organizations.
The good news is that the root of the problem can be explained easily, broken down into three simple parts:
By Brad Powell
Banks and credit unions often ask me if they can achieve the results they need by modernizing their existing system, or will they need to throw out the old one and bring in something entirely new. So I found this article in the OnApproach blog interesting because it compared legacy systems to dinosaurs.
The piece said "legacy systems are a hindrance" for credit unions, and "keeping these dinosaurs alive is a huge resource drain."
I would propose that you can understand legacy systems better with a different analogy – instead of comparing them to prehistoric life forms, let's compare them to airplanes.
By Brad Powell"We're sensing a really deep, pent-up demand for automobiles. ... Auto loans are really a place where we can have our strongest impacts."
- Ahmed Campbell, vice president of credit operations at Municipal Credit Union
I wasn't surprised to read that quote in a story from earlier this year on lending projections by David Morrison of the Credit Union Times. It makes sense for two reasons:1) Opportunities for credit unions to handle automotive loans have been growing in recent months, and experts expect that trend to continue.When you consider that most automobiles are purchased when the member or consumer is not at home or at the credit union itself, embracing mobile devices becomes an essential component for success.
2) Consumers are becoming more and more comfortable using mobile devices for lending transactions. The credit unions who embrace mobile technology soon will capture more than their fair share of the market opportunity.
By Brad PowellIn a recent blog post, I listed five things a bank or credit union must do before adopting electronic signatures.
But knowing those five things is not enough. Avoiding common mistakes other financial institutions make is just as important – if not more so.
As I said in the last post, there are compelling cases to be made for moving to e-signatures. But it’s also more complicated than some would have banks and credit unions believe.
My advice is simple: Make sure you know what you’re getting into. Pay attention to the details and make the move for the right reasons. And make sure you don’t commit these costly errors:
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