PHOENIX-It's not so much about "Big Data" as it is about "CU Data," and it's the latter that has credit unions better positioned than many to win when it comes to mobile. The problem: many CUs don't know what they have.
That was the message from Lee Wetherington, director of strategic insight at Jack Henry & Associates/ProfitStars, Valdosta, Ga. Wetherington told attendees at the CUNA CFO Council conference here that CUs are well-positioned to help members make real-time decisions about their money, which plays right into mobile. The key, he said, is data.
"There is a lot of talk about Big Data and the targeted ads Google does," he said. "Google does so to try to approximate what credit unions already have. Google fantasizes about having the data credit unions have about their members."
But the future-which Wetherington defined as the next three to five years-is not tied to Big Data, it is tied to CU data. Big Data is unstructured, he noted, whereas CU data is "where the value is."
"Transaction data already tells a credit union what other financial institutions its members use, what financial products and services they use, how much they pay to use financial services, where they shop, how often and what they buy."
Say Hello To The 'DeBanked'
While references are often made to the slow death of checking, Weatherington said the real issue goes beyond the declining number of paper checks to the emergence of the "DeBanked" and the rise of "NeoChecking." He noted these are people who could have a relationship with a credit union or bank but choose not to. Many, for instance, are switching to prepaid debit cards as a way of avoiding monthly account fees on checking accounts, ATM fees and other expenses.
"The checking account as we once knew it is not as compelling as it once was," he said.
The new world of checking accounts includes versions that focus on personal financial management, or PFM. Wetherington said these accounts blend prepaid, debit and credit functionality. More importantly-they have mobile-first design. This is important, he noted, because by 2017, 77% of adults will own smart phones (penetration passed 50% in 2012).
"Mobile banking is riding smart phone adoption," he said. "As soon as people get smart phones they have higher expectations and then expect a downloadable application.
For the 40-plus crowd that dislikes thumb typing, coming soon is the ability to say simple phrases such as, "what is my balance," "pay my power bill" or "buy 500 shares of Apple." This is not the distant future, he said, as in the next two months USAA Bank will launch "Nina," powered by Dragon dictation software, allowing fully voice-enabled banking.
What's Coming? Look Here
To see more examples of burgeoning technology, Wetherington recommended www.envisioningtech.com.
The good news for credit unions? Wetherington said 11% of the banked population is planning to switch financial institutions in the next 12 months, including 25% of Citibank and 21% of Bank of America customers. The bad news? Wetherington said to capture this crowd credit unions need to be technologically prepared.
"Bank Transfer Day was only partially successful because people could not get away from big banks that offered online and mobile banking. In many cases, they left a big bank...only to go to another big bank. If people think credit unions are not on par with their bank, they will not consider switching to a credit union."
