18.5 hcul credit unions in 2025 (1) · 2018-05-05 · digital channels are creeping up 14 credit...

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CREDIT UNIONS IN 2025

Hawaii Credit Union League ConventionMay 19, 2018

Cortney Angeley

H ELLO!

Impact Director

Credit Unions in 20252

[email protected]

Filene Research Institute conducts research, tests innovative pilot concepts and offers proven solutions that create meaningful impact for credit unions and drive positive change for credit union members.

Who We Ar eA B O U T F I L E N E

3 Credit Unions in 2025

Our research (THINK)

+ our innovation (DO)

+ our action (CHANGE)

= the secret formula.

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THINK.

How We Wor kA B O U T F I L E N E


Everything we do is ROOTED IN RESEARCH.

Through innovation, we turn RESEARCH INTO IDEAS.

We put IDEAS INTO ACTION through impact.

DO.

CHANGE.

WHEN THINKING ON THE FUTURE…

“We always overestimate the change that will occur in the next two years, and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”

- Bill Gates, Microsoft Guy


Today’s Tr ends Will Shape Tomorrow


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TH E R ISE OF VALU E B AN K IN G


• Millennials


Collaborat ive Consumption


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SH AR ED EC ON OM Y


→ Sharing economy sectors vs. traditional rental sectors

→ Peer-to-peer→ Car sharing and rentals→ Video streaming and DVD

rentals

Te ch-savvy Nat ive s are our Future


“Showrooming”


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Fe w er In -Branch Tr ansactions


8.2 8.48.0

7.57.2

5.2 5.2 4.85.3 5.1

0

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2011 2012 2013 2014 2015

Average monthly branch transaction volume (in thousands)

Cr edit Unions Co mmunity Ban ks

Digital Channels are Cr eeping Up


But the Br anch is not De ad


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W H AT W E’VE LEARN F R OM B U F F ETS


• A couple brief points here, if wanted

If You Build It , The y Will Come


An “Om ni-channel” Expe rience


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AL L O V E R T HE W O RL D


• 24 hours a day

• 7 days a week

• 365 day a year

O M NI - CHANNE L M E M BE R E NG AG E M E NT


→ Extremely strong omni-channel engagement retain 89% of customers

→ Weak omni-channel engagement retain 33% of customers

“Top 10 Customer Experience Trends for 2016” Fonolo, fonolo.com

→ The emotional connection between your customers and your FI (Filene)

What is “Engagement”?


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Eve ntBr ite: Changing Concert Expe riences


2020 Tok yo Olym pic Games


B IG D ATA C H ALLEN GE


Photo by Denys Nevozhai onUnsplash

• A couple brief points here, if wanted

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Google Home is Always “On”


CogniToys


Big Data M ak e s Life Be t terB E A M B R U S H


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C R OW DF UN DING


→ Connects collaborative consumption and leverages big data

→ Finds new ways to connect and serve

→ Contribution: no expectation of a direct benefit – charity donation

→ Reward: nonfinancial reward based on contribution level – T-shirt or coffee mug

→ Pre-purchase: product or service in the future – Indiegogo

→ Equity: ownership stakes if a company is funded

→ Peer-to-Peer Lending: funders receive at least partial repayment

The Big FiveC R O W D FU N D I N G



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Uncove r M embers’ Social Pr ioritiesG E TT I N G S TA R TE D


VIR TU AL R EALITY


“Consumer spending on VR will increase from $108 million in 2014 to $22 billion in 2020.”

- Tractica, July 2015

V ir tual Re ality Appetite


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Sam s ung: Be Fe ar less



What about Internables?


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D R . M IR R OR


→ Microchip with Readings and Recommendations

Gam if icat ion Improves Re sults



Things You Can Do Tomorrow

1. Continue to Watch the Top Trends→ Values Banking→ Collaborative Consumption→ Big Data

2. What Do Your Members Care About Most?

3. Marry the trends and member needs. Work to identify:→ Top opportunity → Top threat→ How will your credit union respond?

→Crowdfunding→Virtual Reality→Gamification

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Le t ’s Talk Credit Unions in 2025


Cr e dit Union Forecast 2025


Five Ke y The mes


REGULATION

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Cons olidation# 1


Cons olidation# 1


CUs -44% Assets +160%

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# 2

→ Whither NCUA?

→ Taxation

→ Rising Leadership Standards

→ Shared Branching Integration

→ Credit Union Consolidation Continues

Re gulat ion in 2025


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Le nding in 2025# 3


• A Big.Darn.Deal

Dis inte rmediat ion# 3 – L E N D I N G


g a ea

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Dis inte rmediat ion# 3 – L E N D I N G

→Consumer Lending: Loan issuances up by $1.5B in 5 years

→Student Lending: Loans outstanding have grown 70% since 2008

→Small Business Lending: Better approval rates than banks or credit unions


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Stude nt Loans# 3 – L E N D I N G


Payday Loans# 3 - L E N D I N G


Payday Loans : What Opt ions ar e Available?# 3 – L E N D I N G

• Not many good ones

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Algor ithmic Bank ing# 3 – L E N D I N G


E-M or tgages# 3 – L E N D I N G


Financial Te chnology in 2025# 4

CG I, “Understanding Financial Consumers In the Digital Era,” 2014, www.cgi.com/sites/default/files/pdf/br_fs_consumersurveyreport_final_july_2014.pdf.

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FinTe ch: The Gr eat Unbundling# 4 – F I N A N C I A L TE C H N O L O G Y

W ALMART LAUNCHE S NE W MONE Y TRANS FE R S E RV I CE W I TH I N THE I R AP P

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- - Express Money Service = shorter line

- - Intends to extend to Bill Pay and Check Cashing


# 4 – F I N A N C I A L TE C H N O L O G Y


Tr ov: On-De mand Pr operty Insurance# 4 – F I N A N C I A L TE C H N O L O G Y

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D OU U GH( Y E S , T HAT ’ S T HE S P E L L I NG )


• Uses Al

• “Financial Control Center of the Future”

• More automated than Mint or Moven




Sm ar tphone Ow nership# 4 – F I N A N C I A L TE C H N O L O G Y

http:// www.pewinternet.org/fact-s heet/ mobile/

64%

74%83% 93%

>$30 ,00 0/yr $30 ,000 -$49,000 $50 ,000 -$74,999 $75 ,000 or more

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→ 21% of Americans with an annual household income of less than $30,000 per year are smartphone-dependent

→ Only 5% of Americans from households earning more than $75,000 per year rely on their smartphones

→ 17% of Americans age 18-29 are smartphone-dependent

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Sm ar tphone De pendency# 4 – F I N A N C I A L TE C H N O L O G Y


http:// www.pewinternet.org/fact-s heet/ mobile/

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ATM Consumer Us age: 2015-17

Source: ATM Marketplace, “ATM Future Trends 2015”, and “ATM Future Trends 2017”


Goodbye ATMs?


ATM Industry Pr edictions# 4 – F I N A N C I A L TE C H N O L O G Y

Source: ATM Marketplace, “ATM Future Trends 2015”, and “ATM Future Trends 2017”

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Paym e nts in 2025# 5

Paym e nts in 2025# 5

→ Changing consumer tastes

→ Regulatory policy

→ Technology improvements

→ Cryptocurrencies


Why Will Cas h Us e De cline?


Globally, a Tw o -Speed System

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Value vs . Volume ( in the US)

The economics of payments is clear, but there is little data about how and why the number and value of consumer payments change over time


A Tw e et on Payment Pr eferences

“a cryptographically assured database in a cloud (or p2p network) that maintains a continuously-growing list of records called blocks, secured from tampering and revision”


Block chain - De f inedTH E R I S E O F B L O C K C HA I N

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Say What?!TH E R I S E O F B L O C K C H A I N

→ A shared database filled with entries that have to be confirmed and encrypted

• A secure Google document• We append one row at a time with new transactions• As each row is added, the previous row cannot be edited

→ “Blocks” = data that is added to each transaction record• Each block is added using a cryptographic signature called a hash


Block chain – in Englis hTH E R I S E O F B L O C K C HA I N

→ Secure: each block is slightly different than the one before

→ Inexpensive: $400 vs. $12.50

→ Efficient: less human intervention, cross-border support


Block chain - Be nefitsTH E R I S E O F B L O C K C HA I N

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• Smartphones will continue to be king

• Measure cash volume vs. value over time

• Compare ATM technology costs with member utilization

• Keep an eye on blockchain


The Road Ahead for CashC A S H

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Re com mendat ionsTH E P A TH FO R W A R D

→ Continue to monitor shifts in auto ownership→ Determine how you can address member lending needs

- Student loans, payday loan alternatives, etc.→ Discuss how your credit union is embracing (or not!) digital media in a way

that makes sense for you and you members→ Consider framing your payments strategy based upon member preferences


T H AN K YO U !

Q U E S T I O N S ?

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filene.org | 608.661.3740

NEED M ORE BRAINFOOD?

Cortney Angeley

[email protected]

18.5 hcul credit unions in 2025 (1) · 2018-05-05 · digital channels are creeping up 14 credit...

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