Fintech Trends Destined To Elevate The Member Experience: Insights from the Jack Henry™ Connect Conference, October 16-19, 2023

After attending the recent Jack Henry™ Connect Conference, I am confident that change will continue to be the norm as we head into 2024. But for credit union leaders without a solid technology plan, this change will be even more pronounced.

Staying abreast of our evolving technology landscape — and its impact on operations and member services is essential. The JH conference outlined crucial strategic priorities for credit unions to consider, as well as new ways you can help members excel.

It’s an exciting time to be a credit union leader, forging new and better ways to serve your members. But how can you harness current fintech trends to enhance your member’s unique banking experience? And how do you align these trends with organizational and member-focused needs?

Jack Henry’s Core Message Was Clear:

It’s not just about adopting new technologies; it’s about understanding, leveraging, and seamlessly integrating these technologies to strengthen member relationships, combat fraud, and navigate the complexities of financial fragmentation. JH Connect reaffirmed Jack Henry’s commitment to credit unions while helping them adapt and thrive in a dynamic landscape. Their philosophy centers on providing the necessary tools and technologies to effectively serve members at critical moments and through the channels of their choice.

Five Conference Takeaways:

1 – Building Stronger Member Relationships

Credit unions are uniquely positioned to foster deeper, more meaningful connections with their members. This includes offering financial products and services and truly understanding and supporting each member’s journey.

Consider these points for building stronger relationships:

• Financial Health: Integral to building trust is focusing on your members’ financial wellness. This involves providing resources and education to all age groups and targeting younger generations to build long-term loyalty.
• Supporting Various Lifecycles: It’s critical to address your members’ diverse needs at differing life stages, whether saving for a first car or home, planning for a family, sending kids to college, or preparing for retirement.

2 – Combatting Fragmentation

Fragmentation addresses the growing concern of an individual’s funds spread across multiple institutions, representing a loss of control and ineffective money management. Additionally, the increase in financial service competitors makes it easier for consumers to share account information with other providers. JH notes that the average consumer has 20-30 financial accounts, while millennial families regularly maintain 30-40 financial relationships. (Jack Henry – Fin Talk)

Credit unions can address this fragmentation through fintech solutions. By leveraging advanced technologies, they can provide tailored financial products and services that align with each segment’s needs, improving engagement and satisfaction. Adopting the right tools — and developing a deeper understanding of each member’s journey — will facilitate more personalized, relevant, and timely financial solutions.

Integration is key: Integrating these technologies represents another leap forward in managing the complexity of the modern financial landscape. By harmonizing disparate financial accounts, services, and platforms, integration brings a coherent and comprehensive view of an individual’s financial life. It also enables credit unions to enhance their member relationships and foster greater loyalty. This unification is essential, especially considering the average consumer’s involvement with numerous financial institutions.

Points to consider:

• Eliminating Screen Scraping: . (Jack Henry)
  • Key benefits:
    • It brings control back to the accountholder;
    • Creates a holistic and complete view of the members’ finances; and,
    • Provides an elevated digital experience.
• Improved Service Delivery: Fintech alternatives can assist and position credit unions as adaptable and member-centric institutions in a rapidly changing economic landscape.
• Diminished Financial Standing: Many consumers lose track of their financial standing because funds are spread across multiple institutions. This fragmentation presents an opportunity for credit unions to reclaim their role as the primary financial institution (PFI) for their members.
• Integration: Embracing integration allows credit unions to offer more effective, efficient, and personalized services. They can also analyze consolidated data to understand member needs better, anticipate financial trends, and tailor their offerings accordingly.

3 – Fostering Financial Health

Fostering financial health is essential to building loyalty, and it requires moving beyond traditional services; it means becoming a trusted partner in your members’ lives.

• Featured Session: “The Thing About Financial Health” offered excellent insight. Here, a panel of credit union professionals discussed financial health challenges, serving underserved communities, and finding niche opportunities for growth. They outlined how their credit unions were addressing these concerns while meeting the needs of their members and communities.

Panelist Craig Dauksas, the digital product innovation manager at Credit Union of Texas, highlighted the success of his credit union’s collaboration with local schools in delivering financial education. By focusing on student-operated credit unions, they provided essential financial resources and education, equipping students for future financial challenges. This initiative allowed the credit union to fulfill its mission of enhancing its members’ economic well-being.

What unique opportunities are there for your credit union?

• Key Statistics: JH shared that 80% of customers want their primary financial institutions (PFIs) to aid in improving their financial health, yet only 14% feel their PFIs are doing this effectively.

There’s a clear opportunity for credit unions to fulfill this niche:

• Digital Banking Solutions: How can your credit union improve the member experience by integrating financial health resources into the digital banking experience?
• Educational Courses: Is there an opportunity for your credit union to provide in-person and online financial education courses? If your credit union currently offers these courses, how can you leverage this to reach other community members?

• Implications for Credit Unions: Prioritizing financial health can lead to stronger relationships and loyalty. It’s also a pathway to serve and grow with your members.
• FinancialHealthResources: These appeal to underserved markets, creating new opportunities for credit unions.
  • To illustrate, low-income households (25%) are more likely than high-income households (13%) to factor in how much their institution is concerned with customer financial health. (Financial Health Network)

4 – Aligning Fintech Partnerships

Credit unions face the challenge of keeping pace with technological needs while providing high-end member experiences. Rather than seeing fintech providers as competitors, view them as potential partners for greater success.

Consider these benefits:

• A Dual Perspective: The rise of fintechs can be viewed as either competition or a partnership. Allying with the right fintech solutions can enhance your members’ banking experience.
  • Innovative Solutions: These can range from enhancing your members’ banking experience to streamlining back-office tasks. The vendor hall at JH Connect was filled with fintechs eager to partner with banks and credit unions.
    • Exhibit Hall Standouts:
      • Autobooks*: Integrates your members’ small business needs directly into online and mobile banking.
      • AvidXchange*: Streamlines your credit union’s invoicing and AP needs with AvidAscend.
      • Constant AI: Empowers your members to manage their loans entirely online and automates manual back-office tasks.
      • Digital Onboarding*: Personalizes the account opening experience while creating engaged and profitable relationships.
      • Incent*: Provides digital banking for kids and teens with interactive financial education.
      • Larky*: Proactively connects you with your members at the right place and time. Larky Nudge delivers tailored push notifications to accountholder segments.
      • Plinqit*: It’s a white-label, high-yield savings product that combines automated savings, financial wellness content, and virtual account management.
      • Silvur: Supports your members throughout their retirement journey.

5 – Developing A Fintech Roadmap

Credit unions increasingly turn towards fintech innovation to stay competitive and relevant. The key is strategically is vetting and implementing appropriate technologies — not just new systems.

Consider drafting a roadmap to include the following:

• Member-Centric Solutions: When exploring new solutions, the primary questions should be how they will serve your members’ current and future needs — and the ability to prioritize these needs.
• Targeted Improvements: Solutions should aim to enhance financial health, set and achieve savings goals, and prepare your members for future financial milestones.
• Navigating Integration: It’s crucial to manage the integration of new technologies carefully, ensuring they align with your credit union’s overarching goals and values. Completing due diligence is critical and should include evaluating each vendor’s technical architecture, security, and financial position.

At MDT, we invest significant resources into vetting fintech vendors. For our clients, it dramatically reduces the reputational and financial risk of partnering with a company that doesn’t employ proper controls or isn’t meeting technology or security standards.

Guiding Credit Unions in a Complex Ecosystem

In an ever-changing financial ecosystem, the role of MDT is strikingly clear. We are a service provider, integrator, and strategic partner, guiding credit unions through the complexities of a volatile tech environment. Aligned with Jack Henry since our inception in 2003, our partnership has only strengthened as we implement flexible, innovative client solutions.

Benefits for your credit union:

• Managing Fintech Solutions: MDT can play a pivotal role in an evolving financial landscape. Our Consulting Services can assist in identifying areas where fintech solutions align with your credit union’s goals.
• Serving as a Trusted Expert: MDT emerges not just as a technology provider but a trusted guide, helping navigate the growing ecosystem of fintech innovation and ensuring technologies are implemented in a way most beneficial to your members.

Creating a roadmap for credit unions and their strategic partners will dictate future success. By enhancing relationships, addressing financial fragmentation, and embracing fintech partnerships, we can assure that you remain competitive, relevant, and, most importantly, member-focused in a perpetually shifting financial environment

*Indicates MDT business partner or Vendor Integration Program (VIP) partners.