ORLANDO-At Credit Union Journal's Grow Show last week, industry experts on payments and mobile laid it on the line to CU execs, telling attendees to get moving in the mobile space if they haven't already, and to base their plans on analysis of their memberships.
"Know how your members are behaving, and which ones are the most profitable," said Caroline Willard, EVP, markets and strategy at CO-OP Financial Services, based in Rancho Cucamonga, Calif. "Credit unions have the data, and the amount and detail is overwhelming. But a common problem is that they may not have the tools to mine the information."
Willard emphasized that when mapping a mobile strategy, the CU should know the number of products per member, and how much members are spending and at which merchants. "You need to get granular-down to demographics and transactions. That will tell you a lot about ... their mobile needs."
What Do Members Look Like?
Brian Scott, VP at The Members Group, Des Moines, Iowa, stressed understanding where the CU's bread is buttered, making sure that a mobile solution first caters to that segment of the membership. "Get to know the top 80% of the membership that is producing your income-who they are, what they look like."
Bill Lehman, VP of portfolio consulting at CSCU, Clearwater, Fla., reminded that outside of examining the CU's member data, credit unions should survey to know what the membership wants. "Ask them about the mobile products and services they like and use."
Mike Kelly, CEO at PSCU, St. Petersburg, Fla., urged credit unions to dream big and then take action on one idea. "Get your ideas going, and then get them off the white board. Implement one - it can be small, but try one. You don't have to go portfolio wide.
If the effort goes well, go to version two. If not, kill the project and move on to another idea."
Meanwhile, Kelly said if he had his way there would be a total ban on discussions about the "future of mobile payments" because mobile's future is taking shape right now.
Once-In-A-Lifetime Disruption
Kelly told attendees that a massive shift is taking place in how people are behaving, transacting their financial business and looking at their credit unions.
"The money-center banks are stumbling," he said. "Consumers realize bigger is not better, niche and community is good, and that the co-operative financial business model wins. We are in the midst of a once-in-a-generation level disruption-mobility is absolutely the future and that future is here and now."
Kelly termed mobile a "super channel" and predicted eventually mobile payments will surpass plastic-in two years being a strong complement and possibly replacing plastic in 10 years.
Although it is possible mobile payments may leapfrog EMV, betting on that idea may put a CU at the back of a long line and possibly at the bottom of members' wallets, according to the same panel of payments experts.
The Members Group's Scott said that for CUs with large contingents of members who travel or live overseas, investing in EMV now could be a good idea. Otherwise, he reminded that EMV is an effort being driven by the two big payments networks.
CO-OP's Willard said her company is not certain that the fraud savings from EMV outweigh the cost of the chip cards now. "So we recommend that you wait. Plus, merchants [converting POS terminals to EMV capable] are not there yet."
Kelly cautioned that credit unions have to weigh their own situation and memberships, and to realize that if their financial institutions wait too long to get moving with EMV, the lines to create long-term relationships with processors could get long. "The 2015 liability shifts are right around the corner. Contemplate issuing EMV cards naturally, as cards expire."
