Over the last decade, credit unions have increasingly focused on how they can strategically embrace digital transformation. As technological advances have continued to move us all forward at lightspeed, changing how we live, connect with each other and do business, we’ve come to the point in the transformation journey where we must ask ourselves if our industry is still evolving to a new digital reality or has it arrived at one?
Mark Sievewright, Founder & CEO, Sievewright & Associates, makes the case in his Emerging Digital Economy keynote at SherpaFUSE 2020 that we have indeed arrived, and, in fact, we are now experiencing the digitalization of our industry. Digitalization, as he explains it, is “a widespread and fundamental change due to the use of digital technologies to change a business model and provide new revenue and value-producing opportunities, becoming a digital business.”
Emerging Digital Economy,
Mark Sievewright
To provide context around digitalization, he offers these five macro trends fueling it:
- The accelerated consolidation and drive for scale. The financial services industry favors scale economics, and industry consolidation is accelerating. If trends continue, we can predict 2,900 credit unions in the U.S. by 2030, down from the more than 5,000 we have today. The same is expected in the banking industry.
- Unprecedented advances in technology and innovation. If you think the pace of technological advances are fast now, just wait. We are entering a phase of intense development and technological adoption that will impact how financial services operate.
- Changes in consumer attitudes and expectations. Members and consumers are “obsessed” with exceptional member services that deliver on convenience, ease of use, speed, empathy and personalization. This framework is now well-known, and it requires us to get our data in order so we can better engage with members and market to prospective ones (especially through the use of emerging technologies).
- New waves of competition from large-scale incumbents and new entrants. Competition is intense and it’s not just coming from fintechs. The Big Banks have adopted “high touch, high tech” strategies that have boosted their consumer satisfaction scores beyond that of credit unions. Credit unions need to leverage and collaborate with fintechs to compete.
- Demographic changes and the rise of digital natives. A massive demographic change is underway. More than half of the U.S. population is made up of Millennials and Generation Z (those born after 2000), and in five years more than 75 percent of our workforce will be made up of these two generations. As our population goes through this shift, it will only further change how financial services are delivered, as well as how our credit unions grow and manage our talent.
While these macro trends are inherently changing our industry, Sievewright claims credit unions can use their people, processes, data, and technology to reimagine and reinvent how they deliver financial services differently. To learn how credit unions can transform their organizations and business processes, what emerging technologies will further transform financial services, and the strategic imperative framework that credit unions need to adopt to compete in today’s digitalized industry, watch Sievewright’s full encore keynote presentation.