Credit unions must accelerate their adoption of technology platforms that provide end-user experiences comparable to those offered by Big Tech, as consumers of all generations now expect personalized, fast and frictionless digital experiences.
That’s according to a new report from Alkami, a Plano, Texas-based provider of digital banking solutions for U.S. banks and credit unions. The report, “Digital Banking Market Pulse: Big Tech’s Influence on Digital Banking,” was based on a June 2021 survey of 795 consumers, who represented customers and members of a range of institutions, including credit unions. credit, and 150 regional and community financial institutions.
Alkami found that, regardless of age, consumers want digital banking experiences that rival those offered by big tech companies such as Amazon, Google and Apple, and 40% of respondents said they believed that the “bank” of the future would identify itself primarily as a technology company. . Community financial institutions such as credit unions will be challenged to provide Big Tech experiences themselves, given that they require major investments and a multitude of workers, so they must collaborate with regional peers that they previously viewed as competitors and technology companies to improve their digital banking experience. ante – as long as employees are willing and able to keep pace with Big Tech, advises the report.
“Consumers today expect the advanced digital experience that Big Tech delivers, and that expectation extends to all digital aspects of their lives, including everyday banking,” said Allison Cerra, chief marketing officer. from Alkami. “To keep pace and stay competitive, FIs must recognize what customers and members want most, and leverage modern digital banking platforms to achieve those goals.”
One area where consumers’ digital banking preferences differ by generation is the use of AI in apps, with 38% of Gen Zers (aged 18-24) saying they prefer AI/machine learning recommendations because they are not as likely to be biased. or pushing unwanted products, compared to 25% of baby boomers surveyed. However, no generation is completely disabled by a lack of privacy or ping notifications – 73% of respondents said they would prefer an app that understands their needs and priorities and shares relevant information over an app that respects privacy and don’t push offers.
The report also found that 41% of financial institution respondents cited the changing technology landscape as their biggest risk, 26% of consumer respondents would consider switching from their primary financial institution to a large tech company overall, and 44% of consumer respondents % of consumer respondents would be open to change if the technology company offered services similar to those offered by their financial institution. Additionally, 79% of respondents said they would consider opening a checking or savings account with a Big Tech company, fintech or neobank. However, only 21% of respondents from financial institutions said they saw big tech companies as competitors.
“Although Big Tech companies are the least likely to be viewed as a competitor by regional and community banks and credit unions today, perhaps FIs are missing the pervasive influence of these companies on preferences. consumers in general. Even if competition is not overtly direct from these Goliaths, the indirect threat they pose by raising consumer expectations over time is perhaps more insidious,” the report warns.