As we step into the new year, it’s imperative for credit unions to equip themselves with the right strategies to stay competitive, secure, and member-focused.
This blog explores key areas that demand attention, from embracing cloud technology and navigating the complex world of open banking to addressing the challenges posed by artificial intelligence, cyber threats, and financial uncertainty.
Moving to the Cloud
Adopting cloud technology is a critical step in digital transformation. The cloud provides speed and flexible scalability at a clear, more predictable cost. That is why cloud technology is predicted to gain popularity in 2024.
Celero wants to help our clients reap these benefits. In 2023, we migrated our Fiserv DNA™ Core Banking and Integration Services to the cloud, and more migrations are on the way in 2024.
Our cloud strategy includes using both Oracle and Microsoft platforms to provide a solution that is optimal for Celero, and our Canadian credit union clients. The details of this strategy and our cloud migration progress have been discussed in more detail in previous insights posts.
Open Banking Rollout
The implementation of open banking (AKA consumer-driven banking or consumer-directed finance) in Canada has faced long delays, leaving stakeholders disappointed. Stakeholders like our partner FinTechs Canada, who is consistently fighting to see progress.
Here is a brief timeline:
- The initial report released in August of 2021 called for the beginning phases of open banking to roll out in January 2023; a deadline that was not met and has long passed.
- In March of 2022, the government selected Abraham Tachjian as Canada’s open banking lead. Tachjian’s term ended in September of 2023, but was then renewed until the end of December.
- In November, the Government of Canada released its 2023 Fall Economic Statement, which provided a policy statement on consumer-driven banking. In summation of the statement, the federal government intends on providing legislation this year, so that a fully implemented framework can arrive by 2025.
In 2023, Celero hosted a webinar interviewing our Vice President of Client Delivery, Deborah Moore. Deborah noted that as everyone waits for the final framework to be released and implemented, organizations are not standing still. Banks are moving forward by implementing services similar to open banking; they are establishing these services with third parties through bi-lateral agreements ahead of the official regulatory framework. Many aggregator services are available, offering open banking solutions for purchase and implementation.
Credit unions are moving and preparing as well. The Large Credit Union Coalition (LCUC) announced in November that Caspian One has been chosen as a preferred open banking partner. Deborah responded to this announcement saying:
“We are excited about this incredible milestone in open banking readiness for the Canadian credit union system, and we appreciate the work that LCUC has undertaken to achieve this accomplishment. It’s a priority for Celero to help credit unions to fully participate in open banking, utilizing a strategy that is designed for credit unions and was built in consultation with credit unions. We look forward to the continued opportunities to support and engage with LCUC through this process. – Deborah Moore (Vice President, Client Delivery, Celero)
AI’s Impact on Cyber Security
A new year means new cyber security challenges, especially due to recent advancements in AI. Generative AI tools can create compelling social engineering attacks, including phishing emails and deepfake calls. The best way to stay on top of the latest tools and attack trends being used by cybercriminals is to implement routine security training for employees.
As cybercrime evolves, so does Celero’s security services and initiatives, which can help your credit union keep pace this year.
Our most recent security initiative is implementing a Zero Trust framework to protect Celero and our clients. Zero Trust is designed to protect data and IT infrastructure against increasingly sophisticated cyber threats by authenticating, authorizing and continuously validating users when gaining and maintaining access to applications and data.
Utilizing Zero Trust technology is expected to be a cyber security trend for 2024, establishing its importance for all organizations going into the new year.
AI vs the Human Touch
Beyond security challenges, AI is challenging organizations to optimize their efficiency. For credit unions, it can be difficult to know how to implement AI in the workplace and within member experience without compromising core values like security and personal connection.
For credit unions fearing the security risks of employees using open-source AI software to complete tasks, there is a solution. Users of Microsoft Office 365 can access Microsoft Copilot, an AI assistant with built-in security measures to protect private organizational data.
Another AI trend in banking is the use of chatbots. Implementing chatbot technology improves efficiency, but doing so risks creating a divide between members and their credit union. This is because traditional chatbots can be frustrating for a member who just wants immediate and thoughtful help from a human.
Personal member experiences and connections are a large part of what sets credit unions apart, so the key is to find a digital solution that provides efficiency without jeopardizing the human touch of a real advisor.
Conversational Engagement from Unblu is the solution. This platform offers features like video chat, messaging and co-browsing, so that advisors can meet and collaborate with clients online.
Prominent Canadian credit unions like Assiniboine Credit Union in Manitoba and Synergy Credit Union in Saskatchewan have already recognized the benefits and begun using this technology. Investing in digital solutions like Unblu’s can ease some of the pressure on credit unions while attracting new members, so it is expected that this platform will grow in 2024.
Helping Members During Financial Uncertainty
Something that will unfortunately continue in 2024 is the financial struggles of Canadians. Inflation rates are lower than they were a year ago, but homeowners are now left to deal with higher mortgage payments. The Bank of Canada has stated that those who took out their mortgages when the rates were low are now facing, or may soon face much higher payments.
This issue, coupled with increasing debt and a high cost of living is making it difficult for Canadians to make ends meet. Credit unions are all too familiar with the financial pressures being faced by the individuals and businesses in their communities.
Connecting with members and providing advice can help bring some hope and relief. Personal Financial Management (PFM) tools that come built-in to your banking app can empower individuals by showing them their options, and offering personal recommendations.
Offering a positive customer experience to members can make banking a little easier during financial uncertainty.
Challenges come and go. But credit unions showed up for their members in 2023, and will continue to support their communities in 2024 by doing what they do best: innovating, adapting, and putting members first.