DENVER — It's time to start thinking of Google and T-Mobile as competitors.
According to a recent study from Accenture, 72% of consumers ages 18-34 would bank with such institutions if they offered financial services.
"It's not only that they can, they will," emphasized Jim Kern, head of sales at Infosys' Finacle Banking Division in North America, speaking to a standing-room-only crowd Monday at the joint CUNA's America's Credit Union Conference/World Council of CUs conference here. "It's another awakening call to say if we want to capture those members 18 to 34, which are the ones we really need then we really need to put those services out there to compete with those institutions or non-institutions that are out there."
Kern told the international audience that the CU community as a whole needs to become more agile, innovative and flexible, while continuing "to stress the value-based partnership that have been the cornerstone of the credit union business model historically."
That disruption from new competitors has changed the competitive landscape for CUs, said Kern, noting that 10 years ago the competition was mostly from traditional opposition — big banks and community banks. Those competitors are still there, but new players keep getting into the mix.
"Walmart has been trying to have banking services for a number of years, but Walmart is not the one you have to worry about — it's the Apples and Googles and T-Mobiles of the world," he said. "These are all industries and business that want to get into banking services, and they're doing it in a way that is disrupting the way business has occurred from a banking standpoint. The competitiveness from the non-traditionals is something you guys have to worry about more than the bank down the street or the credit union down the street or Bank of America."
Effective business models for the next decade, according to Kern, will be built around the dual strategy of "renew and new," meaning renewing the core business, but innovating with new ideas along the way.
"You're infusing new life into existing lines of business while innovating into new ones," he said. "It's really a multi-pronged approach — the ability to say 'We've got some new services, traditional technologies we've been delivering, but we also have to look at where we're going to go together.'"
And he had a stark reminder for an industry that continues to shrink: the organizations that don't innovate will be the ones that get left behind and merged out of existence.
