Credit unions have been a cornerstone of the United Kingdom’s economic and social fabric since the 1960s, proving their effectiveness as community-driven financial institutions. These not-for-profit financial cooperatives, owned and controlled by their members, offer savings, loans, and other services, often at better rates and terms than traditional banks. They prioritize community involvement and financial literacy and serve a diverse clientele.
However, the UK’s credit union landscape is evolving rapidly, driven by changing user expectations, technological advancements, and a growing reliance on digital services. Modern members demand seamless, tech-savvy experiences similar to those offered by large banks, making it crucial for credit unions to embrace technology to remain competitive.
However, embracing digitisation comes with unique challenges for UK credit unions. This article explores some of the challenges of technological advancements and how credit unions can overcome them.
What Challenges Are Credit Unions Facing?
With the banking industry becoming more digitized, more and more customers are demanding technology-led financial services. This growing demand for seamless experiences has made it imperative for credit unions to embrace digitisation without inflating costs. However, this comes with significant challenges like:
- Limited Digital Infrastructure: Most credit unions in the UK rely on outdated systems that lack the ability to integrate newer technologies. This can restrict them from offering seamless digital services to modern members.
- Budget Constraints: Since credit unions focus on uplifting the community instead of profits, they often lack the budget to implement advanced systems.
- Inadequate Resource: Leveraging AI can help credit unions streamline processes and improve customer service. However, many credit unions lack the resources and expertise to implement these solutions effectively.
How can Credit Unions Stay Ahead?
Credit unions play a vital role for several communities across the UK, offering affordable and accessible financial services and promoting economic well-being. To stay ahead in a competitive landscape, it is essential for credit unions to adapt to modern trends and technologies. Some key trends to watch for include:
1. Partnering with FinTechs
The simplest and quickest way for credit unions to accelerate their digitisation efforts is collaborating with FinTech. This can provide access to specialised guidance and cutting-edge solutions, enabling credit unions to streamline processes and meet member demands quickly.
2. Investing in a Digital Infrastructure
Investing in a robust digital infrastructure is a crucial step to going digital. This includes cloud-based technologies, cybersecurity measures, core banking systems, features to enhance customer experience, and more. A well-designed technological infrastructure allows for more streamlined processes, flexibility, and security.
3. Cloud Computing
Cloud computing is slowly becoming integral to every industry, and banking is no exception. By adopting cutting-edge cloud solutions, credit unions can enjoy better scalability and agility. This can make it easier to deploy data-intensive applications, improve customer experience, reduce transaction processing times, and more.
Moreover, with improved security offerings from cloud infrastructure providers, credit unions can better protect sensitive financial and personal information.
4. Artificial Intelligence
AI also presents many exciting opportunities for credit unions to enhance customer experience and optimise operations. It can analyse members’ behavioural data and offer personalised recommendations, making it easier to tailor user experiences and provide round-the-clock service using virtual assistants and AI chatbots.
Moreover, credit union leadership and management can also benefit from the power of AI. It enables leaders to identify and analyse large amounts of data to make informed decisions and create data-driven strategies. This can help strengthen the credit union management and, in turn, improve member experiences.
Credit unions in the UK can also leverage AI tools to enhance employee experiences. They help automate mundane tasks (like data entry or verifying documents), simplify training and development, and improve access to knowledge bases and member data. This minimises the risk of human error and boosts efficiency.
Embracing Innovation with iGCB’s Digital Engagement Platform
While it is essential for credit unions to adopt AI, cloud computing, and other technological advancements in recent times, navigating them can often be daunting. This is where iGCB’s eMACH.ai Digital Engagement Platform (DEP) comes in. At iGCB, we understand the challenges faced by credit unions in the UK, including adapting to new technologies and meeting evolving member expectations. We help credit unions in the UK overcome these challenges with the eMACH.ai DEP , which offers an end-to-end cloud-based digital banking solution.
This solution features pre-integrated fintech partners, providing access to expert solutions to drive growth. eMACH.ai DEP also streamlines the launch of new products, improves operations, and provides the opportunity to connect with younger members. eMACH.ai DEP further allows credit unions to create comprehensive user journeys for different stages of member lifecycle, including acquisition, engagement, or retention, catering to retail, SME, and corporate clientele.
The platform also allows credit unions to create a unique and customised design and experience. By leveraging a no-code UI/UX layer, credit unions can easily adapt existing experiences or develop new ones. Built on the eMACH.ai platform, the DEP domain, engagement, and contextualisation microservices. It gives users complete flexibility and control, allowing credit unions to deliver excellent member experiences and meet the demands of today’s tech-savvy customers.
The End Note
At iGCB, we understand the crucial role credit unions play in the society and offer advanced tools to help them stay ahead of tech evolutions. The digital engagement platform is a powerful tool that equips credit unions with AI-powered and cloud-based technologies for streamlined operations, seamless FinTech partnerships, and a tailored approach to engage younger, tech-savvy audiences.
Reference
https://www.findyourcreditunion.co.uk/about-credit-unions/#:~:text=What%20is%20a%20Credit%20Union,track%20record%20across%20the%20world
https://www.biz2x.com/blog/technological-advancements-transforming-credit-unions/#:~:text=Artificial%20Intelligence%20(AI)%20and%20machine%20learning%20are%20pivotal%20in%20transforming,resources%20to%20more%20strategic%20initiatives
Banks and credit unions need the cloud. Here’s why
https://www.forbes.com/councils/forbestechcouncil/2023/11/29/the-credit-unions-guide-to-generative-ai-five-use-cases/
5 Reasons Credit Unions are Good for Your Community
