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Q&A with experts: What’s next for the credit union sector? EMANUEL ANDJELIC is chair and co-founder of Squirrel, a fintech that has designed an app to help people create and stick to a budget. He was a keynote speaker at last year’s annual conference of the Association of British Credit Unions. After graduating from Cambridge University in 2002, Mr Andjelic has been involved in several IT projects and has taken on the role of investor, entrepreneur and mentor in several startups. WHAT ARE UK CREDIT UNIONS ALREADY DOING DIGITALLY AND WHERE COULD THEY IMPROVE? Open banking regulations don’t currently cover credit union accounts, so the risk is that these accounts will become less attractive if they can’t take advantage of the wave of cool new products and services that regular bank customers will be able to take advantage of. CAN TECHNOLOGY HELP LIFT A REGULATORY BURDEN FOR CREDIT UNIONS? WHAT ARE THE KEY DIGITAL TRENDS THAT COULD CAUSE DISRUPTION FOR CREDIT UNIONS? Open banking and Payment Service Directive (PSD2) regulations will be a game changer for banking technology. Banks are being forced to open up APIs (Application Programming Interface) which means that customers will be able to allow innovative tech companies access to their data. These companies are already busy building products and services that create enhanced customer experiences in everything from payments to budgeting. “RegTech” is fast becoming the latest buzz word in the financial technology seen, with lots of products and services springing up that aim to make everything from Anti Money Laundering (AML) to Know Your Customer (KYC) checks quicker, cheaper and more secure. DOES SCALE MATTER WHEN CREDIT UNIONS ARE CONSIDERING WHETHER TO ADOPT NEW TECH PLATFORMS? The beauty of most new Fintech innovations is that they don’t tend to discriminate against the size of an organisation. The newest players with the most innovative technologies are keen to gain market share and will welcome the smallest of organisations. 30 | MARCH <strong>2018</strong>
BOBBY GOULD is client services director for CMutual. He has worked with the company serving credit unions in a number of roles since 2001. He is currently studying at University of Ulster & Boston College, working towards an MSc in executive leadership. He has facilitated strategic planning sessions with a variety of credit union boards across the UK. CMutual is the pre-eminent insurance specialist for credit unions, providing protection products and services, as well as sharing knowledge and insight from across the credit union world. WHAT ARE THE KEY DIGITAL TRENDS THAT COULD CAUSE DISRUPTION FOR CREDIT UNIONS? Mobile, mobile, mobile! By 2025, it’s estimated that 75% of the workforce will be millennials – that is, people born after around 1980. They have had internet access their whole life. For many, their first mobile phone was a smartphone. The challenge for credit unions (and businesses in general) is that keeping up with the competition isn’t good enough; the real challenge is keeping up with the customer. Credit union members are no longer comparing their experience with RBS, Lloyds or Barclays anymore, they’re comparing it with Amazon, Apple and Google. Amazon accounted for upwards of 50% of all online sales in the US, and over 40% of their sales are made from a mobile device. Therefore, a key digital challenge for credit unions is how to serve members in an “always on and available” mobile-friendly world. Among other things, this means looking at the automation of payments, transactions, applications, recruitment. WHAT ARE UK CREDIT UNIONS ALREADY DOING DIGITALLY AND WHERE COULD THEY IMPROVE? Many credit unions now have websites and allow members to check balances online. Electronic payments and transfers are also the norm for many credit unions in the UK. Some have implemented electronic loan and membership applications. To embrace technology, it can be helpful to think about its variety of uses, and then prioritise. Member interaction – using technology to improve how the member can contact their credit union, and be contacted 24/7/365. Marketing – using social media for marketing, awareness and advocacy. Educate and excite – using technology to reach out to members and explain the Credit Union Difference, provide information and education. Automate – using technology to reduce or eradicate manual processes where possible, to improve convenience and access. increase transparency and perhaps renovate the relationship between credit unions and regulators. Where it is different from using existing tools (like online reporting) is that it seeks to use new technologies like cloud computing, APIs and data analytics to solve regulatory and compliance requirements more effectively and efficiently. DOES SCALE MATTER WHEN CREDIT UNIONS ARE CONSIDERING WHETHER TO ADOPT NEW TECH PLATFORMS? Scale does matter – implementing a “digital mindset” requires changes to the systems and controls that a credit union utilises to deliver effective governance. Cost, of course, is also a big factor; however where credit unions can identify common objectives or requirements then collaboration can enable smaller credit unions to benefit from new technologies. TECHNOLOGY CAN POSE NEW CHALLENGES RELATED TO SECURITY. HOW CAN THESE BE ADDRESSED? The forthcoming introduction of the General Data Protection Regulation in May this year places a new emphasis on how companies protect personal information. Technology is part of the solution to security, as well as part of the problem. Understanding where data is stored, why we have it, who has access to it, and how we ensure the security around it is suitable, is increasingly important. One step that credit unions can take is to become Cyber-Essentials certified. This is a government-backed initiative that helps businesses measure their cyber-resilience and take steps to improve it. CAN TECHNOLOGY HELP LIFT A REGULATORY BURDEN FOR CREDIT UNIONS? After FinTech comes RegTech! If Fintech focuses technology on the member, Regtech is the application of technology to decrease costs, MARCH <strong>2018</strong> | 31
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March 2018

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