For this year’s annual Finopotamus “Holiday Tech Wish List,” we sat down with forward-looking fintech and credit union executives who shared their tech hopes and forecasted market realities for 2024. Due to a significant number of intriguing responses, this year’s Wish List will be presented in five installments.
Part Three includes insights from State Employees Credit Union, EarnUp, Bankjoy, Baker Hill, Mahalo Banking, Rapid Finance and Agent IQ.
Wishing to Deliver More Seamless Experiences to Membership
When Lee Chalk, director of digital services at State Employees Credit Union, was considering wishes he said "delivering enhancements that help improve our members’ experiences in 2024 and beyond" topped the list.
"Meeting our members’ financial needs in the critical life moments is key, whether that is applying for a credit card or auto loan, meeting a servicing need quickly and effectively, or discussing financial planning needs," he told Finopotamus. "Too often, that experience can be disjointed or ineffective as members move across different systems, or between digital or in-person channels. We would like to improve every step of our members’ experiences with us."
The $50.5 billion Raleigh, N.C. -based credit union serves more than 2,695,700 members at 275 branch locations and supports 7, 568 employees, 710 of which are tech-facing.
As Chalk looks to 2024, he said the credit union will "continue to improve our members’ experiences, so that we can rival, and even beat, some of the best servicing experiences they receive from other financial services providers, and even in other industries."
Wishing for Financial Wellness Tools, Member Engagement and Deposit Growth Strategies
In 2024, financial wellness tools, member engagement, and deposit growth strategies in “a microeconomic environment” will continue to “dominate discussions” for financial institutions (FIs), especially credit unions, EarnUp Vice President of Product and Operations Brad Woodcox told Finopotamus.
“As we move into a new year, credit unions must identify ways to better engage with members. One surefire way to do so is to offer financial wellness products that solve members’ top concerns,” he said. “Currently, some 70% of Americans are stressed about their personal finances and uncertain about whether they can get it under control. They want tools that help them better manage their spending, and automate strategies, like bi-weekly mortgage payments which accelerates loan payoff and saves money in interest.”
The San Francisco -based EarnUp offers a platform that automates loan debt repayment. Over the last 10 years, the company has helped over three million consumers to pay off mortgage, auto, student and personal loan debts.
From budgeting apps, loan repayment programs, rewards-based savings, and educational resources, Woodcox said “practically every financial institution is racing to offer the latest cutting-edge financial wellness tools to help increase engagement and grow deposits.” This approach, he added, is shaping consumers’ expectations.
“In response, organizations are building financial tools and competition is increasing. However, they’re missing the mark,” he said, offering an example. “Intuit’s plan for reimagining Mint as part of Intuit Credit Karma has not been met with much enthusiasm from users. After all, Mint serves as a budgeting tool and Credit Karma is a dubious replacement that has different incentives. Ultimately, it provides sponsored recommendations that encourage debt versus support financial stability.”
With consumers seeking proactive financial wellness help form FIs, he said credit unions are well-positioned to fill that need.
“Credit unions can continue to lead with a member-first approach, which drives both their mission and their long-term stability,” he noted. “To do so, credit unions must continue to seek out ways to better support their members. To maintain this commitment amongst competitive threats, they’ll need to explore new approaches.”
Wishing to Optimize Deposit Growth Strategies
Since many industry experts believe competition for deposits will remains “fierce” in 2024, Bankjoy’s Senior Vice President of Marketing and Sales Shaw Taylor wishes that credit unions optimize their deposit growth strategies.
“Inflation seems to be cooling and the Federal Reserve has paused on additional interest rate hikes, for now at least,” Taylor told Finopotamus. “If the economic outlook remains positive, credit unions should expect demand for loans to rebound, which means shoring up deposits will be a top priority for credit unions.”
The Detroit-based Bankjoy, which has more than 70 credit union clients, delivers modern banking technology, including mobile banking, online banking, and a banking application program interfaces to FIs.
Citing financial data published in a Bank Administration Institution report, Taylor shared that “cumulative checking deposit account growth fell from a recent high of 7.4% in September 2022 to -2% in September 2023. The story looks similar for small businesses, as total small business deposit growth dipped to -1.2% this fall.”
As a result of these finding, he said credit unions should fine-tune their approach to deposit growth strategies so they can prepare for pent-up loan demand in the coming year.
“While interest rates remain relatively high, deposit funding levels and managing the cost of funds are top-of-mind for credit union leaders, as they strive to attract depositors without cannibalizing their existing deposit base or other deposit products,” he continued. “Another huge factor in deposit growth hinges on an institution’s account-opening channels, so credit unions should strategize their IT investments around onboarding new members and opening new accounts.”
As he considers 2024 market conditions, Taylor hopes credit unions “continue to gain traction in their communities by offering elevated member experiences from day one, after their account is opened.”
To achieve this goal, he suggested that if credit unions align with the “right onboarding technology, coupled with strategically planned growth campaigns,” they can gain a “competitive edge that’s tough to beat.”
Wishing for Elevated Member Experiences
When asked his wish for 2024, Baker Hill Senior Vice President Bryan Peckinpaugh said he wants credit unions to remain “alert when it comes to their credit portfolios” and continue “to serve the needs of borrowers in their communities, especially for member businesses and even larger commercial enterprises.”
The Carmel, Ind.-based company, which has 55 credit union clients, offers loan origination, risk management and analytics solutions to FIs.
“Historically, credit unions have focused primarily on consumer or retail banking needs but today, many credit unions have matured their business models and are taking on new challenges, such as commercial lending,” Peckinpaugh told Finopotamus. “Regarding IT investments, I hope that credit unions are equipped with the tools they need to get ahead of portfolio risk, which requires a strong foundation of data analytics. By collecting and analyzing a wide range of data points, credit unions can gain valuable insights into member behavior, market trends, and credit risk.”
Noting the bank failures that occurred in March 2023, he believes that risk management is top-of-mind for many lending executives.
“Finding ways to get ahead of risk and prevent deterioration in the portfolio is critical for today’s institutions to succeed,” he offered. “When credit unions can get a clear view of what’s happening in their commercial loan portfolios, they can strategize what changes need to be made to prevent losses and even identify new opportunities for growth.”
As he looks to 2024, he said his hope for the credit union industry is that advancements in technology spur more opportunities for growth and elevated member experiences.
“Digital tools can optimize several operational processes and help fuel deeper engagement with members for institutions of all sizes, and given the economic uncertainties of the last year, I hope that more credit unions adapt their operations to what is possible with technology,” he continued. “Demand for loans could rebound later in 2024, so the credit unions that use this period of slower growth to optimize their operational processes with technology, especially their lending operations, will be positioned for growth once the economy rebounds.”
Wishing to Fortify Defenses Against Cyber Security
Mahalo Banking Chief Operating Officer Denny Howell said ensuring “a robust cybersecurity posture” is not just a wish for 2024, but a necessity.
“From promoting strong passwords and multi-factor authentication to ensuring secure configurations for network devices, strengthening the foundational aspects of cybersecurity remains paramount,” he told Finopotamus. “Equally crucial is the adoption of advanced threat detection technologies, leveraging artificial intelligence and machine learning for proactive threat identification.”
The Troy, Mich.-based credit union service organization (CUSO) provides online and mobile banking solutions for credit unions.
Cybersecurity, Howell noted, is not just about technology, but more so is an overarching effort that requires a human touch.
“Building a resilient workforce through comprehensive cybersecurity training programs and cultivating a culture of awareness and responsibility are integral components,” he said. “Simultaneously, collaboration within the industry is pivotal. Encouraging the sharing of threat intelligence, forging partnerships with cybersecurity organizations, and active participation in information-sharing platforms will be key to staying ahead of cyber threats.”
As he looks to the coming year, Howell hopes there are continued efforts to “foster greater financial inclusion, address banking inequalities, and better serve the financial needs of members regardless of any conditions.”
If this shift occurs, he added, it would ultimately contribute to a more robust growth in membership within the industry. “Achieving this growth involves extending products and tools to your members with various conditions and neurodiversity to ensure they have accessible ways to engage with your offerings.”
Noting that 15 to 20% of the world’s population lives with a neurodiverse (i.e., differences in the way people’s brains work) condition, he said this demographic is largely without representation.
“By prioritizing services to accommodate diverse member needs, credit unions stand to unlock significant opportunities for attracting more members and connecting with neurodiverse individuals, offering them impactful banking experiences,” he said. “We expect this progressive approach will be critical for the credit union industry well into the foreseeable future.”
Wishing to Expand Lending Programs
Rapid Finance’s Product Manager Preethi Janardhanan wishes to empower credit unions to expand their lending programs and better serve the small businesses in their communities.
“Traditionally, credit unions have always been invested in the quality of their member experience, but with the digital demand and market opportunity that small businesses present, credit unions need to transform their member experience and workflows,” Janardhanan told Finopotamus. The Bethesda, Md.-based fintech provides lending-as-a-service (LaaS) solutions to FIs.
“With LaaS technology, credit unions can expand their lending programs with a streamlined and digital-first origination experience,” she noted.
Since credit unions have the ability to support portfolio monitoring and leverage existing member data, Janardhanan said these FIs can provide an “enhanced and seamless member experience,” while “driving a healthy portfolio, ultimately contributing to job creation and economic growth in their local communities.”
As more automated lending platforms are onboarded, small businesses owners will turn to FIs that provide faster approvals and access to funding through other sources, Janardhanan noted.
“Many of these borrowers are already credit union members, highlighting a missed opportunity. In this competitive market, it will be important for credit unions to leverage automation and rules-driven origination to provide quick decisions and drive member delight,” she continued. “Credit unions need to be able to understand their member database better to monitor performance, provide a seamless experience and drive member retention. Leveraging technology that enables them to do this in an optimal manner will be a key goal for credit unions in the coming year.”
So as Janardhanan considers the 2024 market, she is hopeful that credit unions recognize the overlap between their existing members and the small business owners.
“Many small business owners would prefer to partner with their existing credit union for business banking services,” she said. “Rather than simply cede this market opportunity to competitor banks and fintechs, my hope is that credit unions will see that they are well positioned to play an even more important role in supporting the financial health of the communities that they serve.”
Wishing for Increased Ubiquity of Open Banking
Agent IQ’s Founder and CEO Slaven Bilac wishes for “increased ubiquity of open banking.” This, he said, would allow both “credit unions and their valuable members to use their data to receive better service through actionable insights.”
The Austin, Texas-based fintech, which serves four credit union clients, provides digital customer engagement solutions designed to make financial services more personal.
“While open banking is getting a lot of attention, the progress has been slow,” he told Finopotamus. “The challenge is that organizations, in particular, tend to concentrate on mitigating (real and imaginary) risks, instead of focusing on the value they could provide to their members through new, beneficial products and services.”
As he looks forward, he added: “My main hope for 2024 is that because many credit unions are experiencing pressure due to increased interest rates and reduced liquidity, open banking can help credit unions return to a more steady state of delivering member-focused financial service.”
