By: Alec Hollis & Michael Oravetz | CU Business
As financial technology continues to evolve, the need for credit unions to remain competitive grows by the day. While the unknown is potentially frightening, adoption of financial technology solutions can be a successful way to enhance member experience and improve business.
Financial technology, or FinTech, is nothing new to depository institutions. While the buzzword “FinTech” may have recently become popular, financial technology has been on the minds of depositories for over 50 years. In fact, a 1962 Federal Reserve bulletin details the growing popularity of computer-aided automation and related 3rd party services at commercial banks. At the time, almost half of all banks surveyed reported planned or existing electronic accounting systems, in contrast to traditional, more laborious processes. “The more things change, the more they stay the same” the saying goes; today is no different as institutions seek to replace traditional processes with more customer-friendly, efficient ones. The EFMA, or European Financial Management Association, estimates there are nearly 12,000 FinTech companies worldwide comprising 18 segments of the financial industry. Until recently, smaller community banks and credit unions have been left out of the party, as many FinTech companies focused on large and regional banking partnerships.