Advances in Technology Present New Challenges, Opportunities for Credit Unions

Credit Unions

It would be difficult to overstate how much the day-to-day operations of the financial sector have been impacted by advances in technology over the past generation. Where transactions once took place under very circumscribed conditions, app-powered electronic banking has completely re-written the rules around customer service in the finance industry.

It is now possible for individuals to manage just about every aspect of their personal finances through their phone — from depositing money by taking a picture of their cheque, to moving money between accounts at a tap of the screen to making investments and purchasing stock via app.

But just as smartphones have made it easier than ever for people to interact with financial institutions, it has also created unimaginable vulnerabilities and risks.

Throughout human history, technological advances have gone hand-in-hand with new forms of fraud and abuse, and the smartphone revolution is no different.

Wi-Fi technology and the latest apps might make it easier for you to manage your money, but they also open up the possibility that third parties equipped with sophisticated technology and the latest hacking techniques can compromise the financial institutions consumers place their trust in.

High profile data breaches and hacks over the past four years have proven that even the largest banks and funds are not necessarily safe.

As awareness of the risks posed by cyber attacks has grown, Americans have started seeking out more secure ways of banking.

For many, this has meant making the switch to credit unions. Credit unions are nothing new in the North American financial sector, but with public faith in big banks suffering serious setbacks in the post-recession years, they have become an increasingly attractive alternative for consumers seeking a more responsible approach to banking.

Because credit unions are generally smaller, often lack the institutional clout that the largest banks have, and are collectively owned by their members, they have needed to be creative in distinguishing themselves from their larger competitors.

One of the ways they have done so is by responding creatively to new challenges by adopting innovative technological solutions.

For example, credit unions have typically been much better than banks at staying up-to-date on the latest software and tech related to cyber security.

Credit union boards have been quick to realize that they need to demonstrate to their members that they are taking threats to cyber security serious, and as a result credit unions have more avidly followed the latest news about board portal software to ensure they are using the most secure communication tools.

The evidence suggests that this is an approach that is working. While they still only account for a relatively small portion of the market, credit unions are becoming an increasingly popular choice for Americans who are dissatisfied with mainstream financial institutions.

In an era where banks increasingly seem disconnected from their clients’ needs, and slow to adapt to the dangers and threats of the 21st century, credit unions have managed to see the opportunity in the upheaval that comes with new advances in technology.

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Paschal Okafor is NaijaTechGuide Team Lead. The article Advances in Technology Present New Challenges, Opportunities for Credit Unions was written by NaijaTechGuide Team. The article was last modified: April 23rd, 2021
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