By Edward Chuang, Executive Vice President, Chief Information Officer, Logix Federal Credit Union
Think back ten short years ago. In 2009, USAA was first on the scene to introduce mobile check deposit. Consumers raved and said it was “like magic.” Today, that magic is a basic expectation for every financial institution. Financial institutions of all sizes are working to keep pace with ever-evolving consumer demand.
Once consumers have access to convenient, time-saving technology – regardless of which industry introduced it – that offering becomes the new floor for all industries and companies. So, for instance, when a retail giant makes a process or transaction easier, consumers get accustomed to that experience and expect it in all of their mobile apps. The way money and commerce are moving, it’s obvious that it’s all digital. For many years, transactions on digital banking channels have eclipsed transaction counts in all other channels combined. Without investing in digital, there is a very real risk of financial institutions being left behind, or worse, becoming extinct.
Until now, it has been the big banks driving innovation. They’ve been able to invest enough money and personnel at digital banking that they’ve established today’s set of norms expected by consumers. But, big budgets are only half of the innovation equation. Big banks and smaller credit unions alike have been constrained by the other half of the equation – the technology itself.
As technology develops more rapidly, credit unions stand to benefit by using a side door – third-party providers. The enormous strides forward in the use of APIs and middleware allows credit unions to integrate and transform legacy backend systems into flexible and dynamic digital experiences. Credit unions gain immediate access to their third party’s fleet of developers and can begin to compete head-to-head with large banks.
As the CIO of Logix Federal Credit Union, with over $6 billion in assets, 700 employees, and 15 branches in southern California, we have a digital persona today that would have been impossible to deliver only a few years ago. What once took hundreds of people, we can now do with an in-house team a fraction of that size and our third-party provider, Kony, Inc. It is no longer a stretch for regional credit unions to build world-class applications at an enterprise level.
Prior to joining Logix Federal Credit Union, I ran eDelivery Systems for Navy Federal Credit Union. We rebuilt both the online and mobile digital offerings from the ground up. The mobile app became a top ranked mobile app, compared alongside apps from large banks such as Chase. This wouldn’t have been possible without a massive investment of resources, but today’s technology itself is starting to erase the chasm between regional credit unions and the mega banks.
This matters because it means that credit unions can now return to what customers have loved all along – the community aspect and providing value that our members can’t get elsewhere. We can help our members thrive at an enterprise level, whereas it would have been impossible a few years ago.
The credit union philosophy is “People Helping People.” We do that by helping them manage their finances efficiently. Financial stability leads to so many other social impacts, we can’t underestimate the role we play in our communities. Now, with the added boost from third-party providers and their digital innovation, credit unions are poised to become the new leaders in digital banking.