The future of payments: 5 trends to watch for the credit union industry

first_img 225SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Neil Mumm Neil Mum is the currently Visa’s Head of Strategy, North America. Neil has over 15 years of experience in retail banking and payments, and has been with Visa since … Web: Details 1. Physical cards are here to stay… for nowAs U.S. spending shifts online and mobile payments proliferates, there may be concern among credit unions about the future of physical cards. However, physical cards will remain a central part of the payments experience. There are numerous reasons including the complexity of the POS infrastructure and challenges presented when creating a seamless experience regardless of the form the member prefers. However, in areas where contactless cards frequently use the response is overwhelmingly positive. We don’t know when the tipping point will come in terms of mobile payments, so for the coming years, it will be critical to providing your members frictionless ways to pay, whether that be with a card, mobile device or a computer.2. Security must continue to be top priorityWith EMV well underway, there have been significant reductions in counterfeit fraud at POS, and these reductions will continue as the rollout is completed. As the POS channel is further secured, credit unions should proactively address their weaknesses in security. Living in a digital world means that fraud is expected to shift to online channels, by employing solutions like tokenization your credit union can reduce the risk presented by fraudsters. Credit unions must take advantage of advancements in machine learning, artificial intelligence, and biometrics to improve their ability to combat these emerging threats. To reduce fraud, credit unions should also help put their members in control and provide their members with tools to control activity on their account and to monitor spend in real-time (e.g., text alerts).3. A digital payments roadmap cannot be staticAlthough a high percentage of purchases are still made using a card at a physical POS, almost all growth is coming from the online and mobile channels. All consumer segments are increasingly shopping online. When it comes to mobile millennials, in part due to their higher degree of comfort with mobile devices, are the earliest adopters. But usage is quickly expanding to other segments there as well. Being able to participate in digital wallets and establishing strong top-of-wallet strategies will be key. Given the dynamic nature of the space, it will be critical for credit unions to continually reevaluate their approach to ensure they have the right capabilities.4. Member service must also go digitalCredit unions have long been successful by providing unparalleled service to their consumers. As consumer preferences are changing, it is critical to expand service options accordingly. Online, and increasingly with mobile, banking has become the most vital touchpoint in a financial institution’s relationship with its members.As such, credit unions must have in place an online and mobile banking approach to manage their accounts through the channels they want to use. For example:61% of users noted online banking capabilities as a reason for staying at a current financial institution (compared to 37% for low cost or fees)Consumer expectations of what they can do through their mobile banking continue to increase.Consumers have quickly adopted text alerts for card purchases – which improves spend tracking, fraud identification, and provides a frequent source of member engagement 5. Invest in the next generation of credit union talentIn this rapidly evolving digital world, credit union leaders need to be thinking about long-term growth and success in their own organizations and their future leaders. They must take steps to attract the next generation of leaders within credit unions. Many industries are grappling with changing demographics, and credit unions are no exception. Credit unions face challenges with engaging, retaining and recruiting top young talent. New talent is essential to the success of the credit union movement. Young talent and millennials contribute energy, creativity and leadership to the businesses.  An example of work being done to attract this talent is Visa’s initiative with Filene – one of the most credible industry think tanks help find ways through networking opportunities and access to credit union senior leaders to support and attract young professionals into the industry, then to improve retention through mentorship programs. To ensure the future success of the credit union industry, investments in talent will be critical to ensuring new products and services are relevant to a new generation of members.last_img

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