Benefits of Cryptocurrency for Credit Unions

 

The emergence of cryptocurrency has created a lot of buzz in the banking and financial industries. Its very name evokes ideas of cryptic, mysterious doings. As the world becomes more familiar with the intricacies of these new types of digital currency, it’s important for your credit union to know what the buzz is about.

Cryptocurrency was born on the internet. And its virtually universal accessibility makes it attractive to younger and more digital-forward investors and other interested parties. Recently, new guidance was introduced to help credit unions forge a path in this new landscape. Let’s talk about the benefits of cryptocurrency for credit unions.

Cryptocurrencies for Credit Unions

The National Credit Union Administration (NCUA) has already begun sharing guidance on credit unions and cryptocurrencies. The goal is to create relationships between federally insured credit unions (FICUs) and third-party entities that buy, sell, and hold these digital assets.

A cryptocurrency is a form of digital money with no centralized authority. This means transactions are recorded on a digital ledger automatically. The increased interest in cryptocurrencies has led many banking experts to conclude that credit unions could generate some impressive growth by expanding into these new markets.

Cashless financial services have been the trend for several years now, even before COVID-19 came along. Demand for cryptocurrency access continues to grow as well.

The biggest problem with these new digital currencies is that they are not well regulated yet. When transactions take place, they’re logged into the blockchain – the database that monitors all cryptocurrency transactions. There’s no government regulating these transactions, and anyone who uses the blockchain can view it and the transactions therein.

Many people have been using credit cards to buy cryptocurrencies. But the speculative nature of these markets has caused some banks and credit card companies to deny these transactions.

Benefits and Risks of Offering Crypto Services

More and more businesses are embracing cryptocurrency. You can make Starbucks, Microsoft, Shopify, Home Depot, and Whole Foods purchases with crypto “coins.” The main benefit for those who deal in cryptocurrency is the ability to access and move their money without the use of a third party. They are digital files you can store in digital wallets and use anywhere online with participating merchants.

The regulations issues surrounding the crypto industry continue to be concerning for credit unions and other financial institutions that are more in tune with risk management best practices and compliance.

However, credit unions that wish to stay away from this trend may be missing a big market opportunity. In December 2020, a Cornerstone Advisors survey showed that almost 70% of cryptocurrency owners would use their primary banks for digital investments. However, very few financial institutions are interested in managing these transactions.

21 million adults already own some form of cryptocurrency, and this group offers a huge growth opportunity for credit unions willing to take the leap. This could be a big selling point for future member attraction and retention efforts.

Ways to Get Your CU Involved

There are several options for credit unions wishing to mitigate the risks that come with handling cryptocurrency.

First, you can work with a third-party business. Using mobile apps, you can create transaction opportunities for your credit union members, while running all of these assets (and the associated risk) through a third party.

You can also provide crypto custody services. This falls more onto the record-keeping side of things and includes services like safekeeping, analytics, asset servicing, lending, pricing and valuation, trading, payments and settlements, and collateral.

And positioning your credit union as an early partner for cryptocurrency lovers is a great way to banish the myth that credit unions are technologically challenged.

Offering crypto services is also a great way to reach specific members of the unbanked and underbanked audiences. These individuals love having the option to conduct business without having to create or maintain a bank account.

Cryptocurrency will soon be more regulated. Executives within government and financial compliance agencies, like the SEC, are announcing plans to use legislation and other methods to make cryptocurrency more regulated and mainstream.

Protect Your Members’ Assets from Cash to Crypto

Like many consumers, crypto holders are more likely to partner with financial institutions that offer crypto-specific services. Not sure about jumping into the cryptocurrency game? Credit unions can also offer custodial services, create crypto-forward debit and credit card rewards or interest enhancement, and more.

Credit unions are seen as trustworthy and member-forward. Being among the first institutions (and even beating fintechs to the punch) could be a great way to usher in a new generation of online investors.

As your credit union branches out into new digital territories, compliance becomes even more important. With IMS, you can create safeguards for even the most sensitive of data.

Polaris Sonar, our new SaaS application, applies machine learning to discover, classify, and report on sensitive data without impacting production. You will be able to:

  • automate with machine learning and policies
  • identify sensitive data exposure
  • accelerate compliance with privacy laws

Browse these and more offerings here on our website or contact us today!


How to Embrace the Future of Digital Banking

 

When we talk about the future of banking, a lot of that future is rooted in the digital transformation that will take place in the next several years. Online loan applications, cryptocurrency – these services and more will be the differentiators for success as we move through 2022 and beyond. Here’s how your credit union can embrace the future of digital banking.

What Is Digital Banking?

Digital banking used to mean your members could log into an online account to see their balances and perform funds transfers from one financial account to another. But today, digital banking has expanded so much that your members rarely – if ever – have to visit one of your physical locations to perform any financial activity that will be run through your systems.

It’s not just about convenience, digital banking is about ultra-convenience for your members. Netflix, Amazon, and social media sites use data and other digital tools to make every user’s experience highly personalized – this is becoming a standard to which all B2C businesses are expected to reach in order to maintain member satisfaction.

Embracing Embedded Banking

You don’t have to leave your house to get groceries, prescriptions, Christmas presents, dog food, or to pay your mortgage or car payments anymore – and members like it this way. That one-stop-shop website model is becoming the expectation for your members. Embedded banking may seem like a complex phrase, but it just means that your members are doing their banking without having to visit a bank or credit union website, app, or physical location.

An example of embedded banking is the presence of mortgage applications and services being promoted on real estate sites where your members are browsing available homes in their desired area. Rather than creating financial services that must be accessed separately from the need they are born from, we’ll see more and more companies partnering to allow for end-to-end transactions. You can go to a car dealership and get a loan right then and there through partnerships between the dealership and their chosen financial institution, and savvy consumers will gravitate towards that all-inclusive model because it’s more convenient.

Facial Recognition

One of the fastest-growing authorization tools for financial accounts is biometric access. This includes fingerprints and, most recently, facial recognition. 15% to 20% of US financial institutions are already using facial recognition, coupled with other best practices when it comes to multi-factor authentication, to give members access to their financial information online.

Virtual Branches

The need to “speak to a representative” will never go away. People still like talking to and connecting with real people when they give a business their patronage. Since the start of the pandemic, virtual branches have become increasingly popular as a way to bridge the gap between in-person interaction and the convenience of digital banking solutions.

Virtual branches are digital platforms that simulate the conversation that occurs in a regular branch and rely on diverse communication tools like web, mobile chat, video, co-browsing, and document or screen sharing, according to American Banker.

Infrastructure-as-a-Service: Serve Members While We Cover Your Servers

Your data, servers, and digital banking operations shouldn’t need babysitting. That’s why IMS offers configured resources that meet your unique needs through Infrastructure-as-a-Service. We tailor our program to your specification to ensure our solutions are straightforward, flexible, and pay-as-you-go so you can take advantage of premier cloud services at affordable prices.

Browse these and other offerings here on our website or contact us today!


Why Credit Union Member Retention Will Be Huge Next Year

 

We’ve all heard some variation of the phrase, “It’s 5 times more cost-effective to keep an existing customer than to create a new customer.” And while that sentiment is still true – credit unions spend more money converting a potential member than keeping an existing member satisfied, it’s a little more complex than that. Credit union member retention is only becoming more important as big banks and new fintech companies expand their reach in the financial and banking industry.

So, let’s talk about what credit union member retention is, how it works, and what the future may hold for your CU.

Credit Unions Are Already Ahead of the Game

The first thing to note about member retention is that credit unions are amazing at it. Because credit unions prioritize member services, reward loyalty, and are often active in their respective communities, it’s a lot easier for members to find it beneficial to give CUs their repeated business.

This does get more challenging with the push for digital transformation that we’ve seen in the last few years, though. A lot of credit unions rely on that face-to-face interaction time. It’s much easier to create a genuine relationship when you are interacting in person.

Leveraging Technology Is a Must

When it comes to technology and credit union member retention, this is where CUs are losing ground. Bigger banks and newer fintech companies and apps are gaining their members through the latest and greatest digital solutions. Leveraging technology trends is a skillful way to turn the tables on these newer and bigger businesses. While you’ll never compete with big brands (as is true in most industries, not just banking), you’ll spend less time and money on lead campaigns and generating new members because you can offer comparable digital solutions with that same CU personal touch.

Generational Habits are Vastly Different

If you are creating or assessing your credit union member retention plan for 2022 and beyond, it’s also important to think about the difference in generational habits. Your baby boomer customers are likely still going to place their trust in onsite solutions, face-to-face interactions, and manual financial services.

However, your Millennial and Gen Z members are going to want more digital options that still show a great deal of care and attention to the personal needs of each member. We’ve talked before about the role of personalization in the member experience, and that still holds true whether you are interacting with your customers through teller windows or apps.  

You’ve Got Member Satisfaction Handled, Let Us Handle the Digital Back End

Credit union member retention is your area of expertise – but the digital solutions that power your branches and keep you and your members connected are ours. That’s why IMS offers configured resources that meet your unique needs through Infrastructure-as-a-Service. We tailor our program to your specification to ensure our solutions are straightforward, flexible, and pay-as-you-go so you can take advantage of premier cloud services at affordable prices.

Browse these and other offerings here on our website or contact us today!


Tips for Increasing Member Engagement This Holiday Season

 

Before the end of September, retailers were putting out Christmas decorations. As the debate about when it’s “appropriate” to start shopping and planning for the holiday season rages, it feels worse than normal this year, and there’s a reason for that. Tons of news outlets and retailers are echoing the same sentiment: shop early this year, as the last 18 months have caused supply shortages in many industries. Here are some ways to increase member engagement this holiday season, and you should start doing them right now.

Prepaid Cards

Gift cards and cash are at the top of many people’s lists this year. Financial hardships still abound as we try to combat the global effects of the coronavirus pandemic, from supply shortages to labor shortages and more.

Prepaid cards can also be used to help your members budget for their holiday spending. They can be used in-store and online, and they can mitigate risk for users because they aren’t tied to any specific bank accounts. With more and more online scammers building websites that trick and mislead customers, the holiday season will likely see its fair share of digital fraud and theft.

The convenience and cybersecurity benefits of prepaid cards are undeniable. It’s a great way help your member start their Christmas shopping off right.

Highlight Community Outreach

Giving is a big part of the holiday season, and your credit union should take advantage of that to showcase what your branches are doing to give back to your communities.

Use your social media platforms, onsite displays, and more to bring attention to the work your credit union does to take care of the families and friends in the area. You can do this by highlighting your 2021 efforts or creating new opportunities for community outreach before and during the holidays themselves. Take up specific causes, and make sure you are vocal about them online.

Promote Employee Holiday Cheer

Don’t forget about your staff! The best way to get your members in the holiday spirit is to show the cheer your employees have. 

Take a look at your usual events and ideas. Instead of allowing your staff to dress in their holiday best for one day, you can run a fun “contest” every Friday – invite your staff to get creative with holiday themes using their wardrobes, then post the top picks on social media and have your followers vote on the one with the best “holiday spirit.” That employee could win something small like a free lunch or gift card to a local business.

There are tons of ways to highlight the holidays for more than just a week or two!

Hold Giveaways

Another way to generate member engagement and community outreach is by holding giveaways before and during the different holidays. Bolster community ties by partnering with a different business every week or every holiday. Your members will discover new community gems they weren’t familiar with, and they’ll see that your business is committed to helping bring success to all area businesses. You could offer this to current business-facing credit union members first or create a Business Spotlight program that runs through the holiday season and brings attention to area businesses that do their banking with you.

Offer Holiday-Edition Financial Management Classes

86% of millennials overspend during the holidays – and that sets them back in the new year and beyond. You could help ease these burdens by offering some financial education opportunities that are specifically tailored to learning how to budget for the holidays, shopping tips, or even financial safety tips (how to tell if a retail website is “legit,” and other helpful topics). Member engagement can come from many places, and showing that you care about the financial health of your members – especially during this time of the year when money is flowing in unusual ways – can help them see that your brand is helpful and genuine in its efforts.

Have Yourself a Credit Union Christmas – Without Data Problems

IMS offers data backup and disaster recovery solutions – the holidays are the last time of the year when you want to have data problems. Our backup services are all-inclusive, to help you get back to taking care of your members during what is sure to be an interesting and uniquely challenging holiday season.

Contact IMS for more information.


The Role of Personalization in the Member Experience

 

For more than a year, businesses and citizens have been wading through a world that has all but killed the casual conversation and public gatherings. We are more acutely aware of even the most fleeting of interactions and relationships. And that’s why personalization is becoming more important in everyday communications and transactions.

Credit unions have continued to position themselves as the local, community-first banking option in towns and cities all over the country. To keep that reputation, credit union leaders are conducting studies and implementing new policies to analyze and highlight the crucial role personalization plays in the member experience.

The Importance of Personalization

A recent episode of the CUNA News Podcast, a panel of credit union leaders got together to discuss the importance of personalization in the member experience.

Personalization is a marketing strategy that can help increase customer satisfaction and engagement in businesses of all sizes, but it’s even more important for credit unions. Credit unions are the friendly, community-oriented banking option in many cities and towns. This means the personal touch is even more essential.

By creating a personal atmosphere that is optimized to create feelings of community and trustworthiness, credit unions can increase membership numbers and showcase what a positive presence they bring to the area business landscape.

“Personalization takes a lot of different shapes and forms. It can be empathy, it can be needs-based selling, it can be people helping people…All of those contain a great deal of personalization,” says Paul Robert, CEO of FI Strategies.

How to Personalize Member Interactions

There are so many ways to personalize the experience of your members. This can be spurred by brainstorming activities or having team huddles about the conversations that members seem to be having with credit union employees, to start. And the central question here should be “What are we going to do for our members?”

Can you engage with your members at a higher level? What does that look and sound like? How do we train or guide our employees to start generating more meaningful and helpful conversations with customers?

Many places from restaurants to doctors’ offices even keep notes in their database systems to add a more personal touch – these notes can include anything from their financial questions to the number of children they have, and other small or everyday details that can help your member to be recognizable by your staff.

Personalization Promotes Loyalty

We know, based on a variety of marketing and industry studies, that adding personalization elements to marketing emails is very beneficial.

Email analytic metrics show things like 31-67% decrease in bounce-back rates, affinity and interest segments perform 28-62% better for credit unions.

Adding personalization elements to all interactions, both digital and face-to-face, increases performance and is also more memorable in the minds of your members. Remember to personalize more than just the name in your email subject line. Now more than ever, people want to be seen as individuals and treated as valued customers.

Employee Team Building Also Plays a Part

Creating a community-oriented, personalized atmosphere starts with your credit union team. Fostering collaboration and creativity in your team can open the door for some great brainstorming sessions that could lead to a business-wide approach for personalizing the member experience.

Leave the Backups to Us

Just like you want personalization to be at the forefront of your member experience, IMS wants to tailor its data and security services to better protect your credit union and its data assets.

IMS has virtual private cloud services and solutions like core hosting, virtual desktop, disaster recovery, and more for your credit union. Contact us today for more information.