5 obstacles to digital transformation in credit unions and how to overcome them

One thing is for sure: the digital age isn't going away. Your members are becoming accustomed to  the convenience, speed, and accessibility of digital banking services. So if you want to keep up with their expectations, it's time to start thinking about transforming your credit union digitally.

That means credit unions need to jump on board if they want to stay relevant and competitive. But let's be honest, embracing digital transformation in the financial sector comes with obstacles. Here are five (and how to tackle them)

1. Limited resources & budget

Credit unions, especially smaller ones, often have limited resources to invest in digital transformation. They may not have the budget to purchase new technology or hire the necessary staff to implement it.

It can be hard to make the case for investing in digital transformation when resources and budget are tight. The key here is prioritizing the areas that will have the most impact. Start by asking yourself – what issue, challenge, or opportunity would benefit from improved technology? Then find the solutions where you can start small and scale up as the budget allows.

Thankfully, there are cost-effective solutions available to help credit unions make the transition. For example, they can use no-code platforms to reduce the cost and time associated with development.

2. Inability to keep up with changing technology

Technology is constantly evolving, and digital banking leaders invest billions in technological advancements. Credit unions may struggle to keep pace with all the changes – let alone implement them quickly enough.

This can be especially true for IT teams that have to dedicate their entire bandwidth to maintaining the existing legacy systems.  And not to mention, the cost of transitioning from outdated systems to new solutions can be daunting and risky.

To stay competitive, credit unions should prioritize a digital-first mindset as part of their long-term strategy. This means staying up-to-date on industry trends and embracing technology that will help them remain agile and open to change.

The solution here is to partner with a technology provider that can help you future-proof your tech stack. Look for technologies that can adapt  with you and make the transition as seamless as possible.

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3. Outdated legacy systems

They may have served you well over time but legacy technology can be inflexible and costly to maintain, putting you at risk of falling behind the competition. And if these legacy systems aren’t able to handle the digital experiences your members expect, credit unions may find themselves unable to keep up.

The solution here is to modernize and update your existing technology stack without having to start from scratch.

A good way to start is by assessing what legacy technology you have and replacing the outdated components with more advanced ones. Finding solutions that enable you to build modern, user-friendly digital UIs that can work with your existing systems is key. 

Invest in a platform that can be easily customized and integrated with other components of your tech stack. This will help you provide a seamless member experience while leveraging your current technology infrastructure.

When starting the transition, it's important to look for solutions that won’t disrupt your existing processes. You also want to make sure you have the right experts on board to help you with the process. 

For example, a no-code platform can enable you to quickly transform your member experience and easily integrate with your existing systems without disruption to your back-end workflows.

4.Security concerns

Credit unions are responsible for safeguarding their members' financial information, and they must ensure that any digital solutions they implement are secure. Security concerns can often be a major obstacle to digital transformation.

You cannot afford to skimp on security.  Ensuring that your digital solutions are secure and compliant is a must. Look for providers who offer thorough encryption, two-factor authentication (2FA) protocols, and other measures to ensure data safety.

You should also make sure that you have an incident response plan in place. This will help you identify security threats and address them quickly.

5. Member adoption

Lastly, credit unions must consider member adoption when implementing digital solutions. Some members may not be comfortable with using digital channels and may prefer traditional methods of banking.

If your members are not the tech-savvy crowd, consider reaching out to them first to better understand their needs.  This will help you decide which digital solutions would be best for your members and how you can ensure they are comfortable using them.

You could also offer training and webinars that explain the benefits of digital banking in detail. Once your members become familiar with what digital banking has to offer and see how easy it is to use, adoption rates should increase.

By taking these steps, credit unions can overcome any obstacles they face on the way to digital transformation. With the right technology and an understanding of your members’ needs, you can create a secure and user-friendly experience for all.  This will help increase member adoption of digital channels and improve their banking experience.

The key is to make sure that your digital transformation journey is seamless, secure, and beneficial for all. Good luck on your journey!