2020 forecast: CUs to double down on data analytics
Credit unions are likely to increase their usage of data analytics in the year ahead as cloud adoption accelerates amid a need to streamline digital banking services and increase security.
That’s according to a 2020 forecast from Member Driven Technologies, a credit union service organization based in Farmington Hills, Mich.
“Credit unions have realized that to remain relevant in today’s complex financial services environment, they must take advantage of the vast amount of data they have available to them and more effectively mine and analyze the information to better meet members’ specific needs,” MDT CEO Larry Nichols said in a press release. “Next year, more credit unions will find ways to merge data analytics and predictive analytics to establish a strategic differentiator and enhance the overall member experience.”
The emergence of fintechs and other new players is also likely to increase the industry's interest in open banking efforts in 2020, and Nichols said CUs are likely to “place an increased importance on APIs and open integration to ensure they can deliver a superior member experience.”
Nichols suggested that while CU leaders have become more open to the cloud in recent years, a similar shift has also taken place at the executive level.
“While traditional [chief information officers] were more likely to want to be in control of their credit union’s infrastructure on-site, modern CIOs are more familiar and comfortable with the cloud, creating a new mindset regarding initiatives,” said Nichols. He added, “Credit union resources that were historically spent maintaining hardware and software [are] now being spent on more growth and member service-focused activities, as well as IT wish lists and innovation. This shift will only continue as emerging talent enters the CIO role.”
As data becomes ever more important, however, credit unions are also recognizing that modern fraud-prevention requires constant vigilance. Nichols noted that fraud-detection developments such as geolocation and real-time alerts have accelerated the need to protect members, and individual institutions “are focusing on making sure their defense measures concurrently evolve” along with new threats.
Nichols also offered a weather forecast of sorts for the new year – and it’s likely to impact credit unions in all parts of the country.
“With today’s unpredictable weather patterns, credit unions are also placing a greater emphasis on the development of robust disaster avoidance and recovery strategies to ensure members can securely access their finances during times of trouble,” he said.