Article updated 11/30/21, then 10/27/22, because Google Plex came, then didn’t appear, then was gone. But meanwhile, other companies are still building tomorrow’s financial service platforms today, like Apple and their Apple Card. Did you know it’s Goldman Sachs’ largest consumer banking product?

Are dark days ahead for credit unions? I hope not. Changing my name will be a real pain.

You’ve heard the rumblings. “Credit unions don’t adopt modern technology, so Millennials will abandon them.” “Traditional financial institutions are the analog film of our time.”

Just as computers did not herald the end of paper, mobile and other technologies will not doom the bank.

There is another possibility, however, and the term originates as a descriptor of the telecom industry as content providers (Netflix, YouTube, etc.) grew in leaps and bounds. They did not want to be stuck delivering only the signal, but to get a piece of the action.

To be an active participant, instead of…A Dumb Pipe.

Where’s Your Member?

I am a member of a credit union (duh), but I’ll be honest: I use their app solely for deposits. All my other financial management, from account balances to budgeting, is managed elsewhere.

I use a platform called Mint, though there are others delivering a similar service. In one place, I can see (but not change) my entire financial life and how trends, budgets, and savings coexist.

Do I want to know how much I’ve dedicated towards taxes this year? Easy. What is my total debt to income ratio? Done. Compared to the six-month period prior? Still not a challenge.

Mint is owned by a little company called Intuit. I bet you’ve heard of them. TurboTax? Yep. QuickBooks? Them too. Even Credit Karma. And now, MailChimp. Their goal is to create a “global technology platform” to foster “complete financial confidence”.

In other words, they’re building the user interfaces that people actually use. While your systems are only connected through APIs in the background. Which isn’t great for your brand recognition. It makes your institution a dumb bank.

That’s a Mighty Fine Safe You’ve Got There

Imagine a future where all your members want from you is a place to hold their money, a big safe. All member-facing products and services are managed by other companies.

Not only do you rarely become front stage for your members (unless something goes wrong), you have few opportunities to discuss the programs which support the institution. Guess someone else will reap the profits of your debit cards.

Or, at minimum, you’re getting all those “free” interchange revenues, but none will ever consider you for a loan. Mostly because they don’t even know they’re a member.

Too bad Google Plex never happened. After Ron Shevlin posted about it, I shared my thoughts that Google simply ditches products because it’s what they do. That comment is one of the top-rated in his expansive thread.

It’s also that the division lost most of their team, had no direction, and was destined to fail.

Too bad, as it could have addressed some of my concerns (Each word is a separate link! I’ve mentioned it a LOT.) with your costs being borne by those least able to pay.

Opportunities in the Challenges

But all is not darkness ahead! This is an important topic, so to ensure I’m covering it sufficiently, the discussion is separated into three parts. Next post, we look at new technologies and strategies in the financial services industry.

We will work together to figure out how you can become a leader through partnerships and smart growth, because “dumb” and “credit unions” should not be uttered in the same sentence.

The final discussion addresses the challenges of adopting new tech and avoiding alienation of your comfortable members; is there a way to be future-ready while preserving your core?  That’s a question for another post.

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