Credit Unions Can Compete with Shadow Banks

  • Share:
technology

Credit Unions Can Compete with Shadow Banks

Banking institutions were some of the first to offer online services to consumers. However, the brick-and-mortar financial industry, credit unions especially, now lags in tech integration and implementation. The digital marketplace is constantly expanding in new and innovative ways—especially online banks and lenders, sometimes referred to as “shadow banks”. As a result, people have come to expect the ability to manage every aspect of their daily lives online and with mobile—banking being one of the top three according to a study by Citigroup. However, there is something these online lenders can’t offer: personal relationships.

Competition is high

Lending today is more competitive than ever. Non-bank and alternative lenders, shadow banks, have a huge impact on the market through the use of technology, often elbowing out credit unions. With a glut of online lending exchanges available, traditional financial institutions are finding it hard to compete, especially when it comes to technology. On these exchanges, a customer can research and apply for a loan within minutes and all from the convenience of their mobile device. Non-bank lenders capitalize on consumer dependence on mobile devices and instant gratification.

They have no fear

Additionally, alternative lenders aren’t afraid to innovate and expand into new areas to better compete with traditional financial institutions. According to a 2017 study by Ernst & Young, non-bank lenders in the US and Europe are aggressively pursuing the mid-market. The number of alternative lenders who are willing and able to take on big-ticket items, such as car or home loans, doubled in 2016. To better compete with alternative lenders, credit unions must innovate and collaborate in an area where alternatives are strong: technology.

Smartphones are the future

Without a doubt, technology is a key consideration when consumers search for loans. This is especially prevalent for millennials, who desire constant connectivity and ease of use. However, other generations have also shown an affinity for a digital marketplace as opposed to the traditional brick-and-mortar store. Led by millennials, consumers now prefer to shop directly on their mobile devices.

According to a 2016 study by Facebook, 60 percent of shoppers say they plan to make more purchases from their smartphones in the future, and 54 percent are more likely to shop with a retailer that is accessible across several devices and platforms. Consumers prefer to research and start loans on mobile devices, and financial institutions need to keep pace with this desire.

Relationships win

Credit unions have an edge—relationships that build loyalty. Alternative lenders offer little or no incentive for return borrowers and rarely offer other services. People want sound advice regarding financial decisions. Whether that information is collected online or in person should be up to the customer. The resources to close the technology gap are out there. The foundation of strong relationships are firmly in the hands of credit unions.

  • Share:


« Return to "Trends"
TrendScan logo
<< Back to Articles

Latest Trends

  1. Identifying Marijuana-Related Businesses
  2. Cut Through the Noise and Deliver Value Members Want
  3. 3 Key Factors for Creating Good Content
  4. A Content Management System Will Make Your Life Easier
  5. Preparing a Transparency Communication Plan
  6. Credit Unions Could Replace Predatory Lenders
  7. Why You Need ERM in Your Strategic Planning
  8. Just How Distracted Are Consumers?
  9. Enterprise Risk Management — Where to Start
  10. Are You Properly Rewarding Your CEO?
  11. The Quickest Way to Understand Enterprise Risk Management (ERM)
  12. What Borrowers Wished Credit Unions Knew
  13. The Easiest Way to Deliver Content for Employee Development
  14. Opportunities and Risks of Banking for Marijuana-Related Businesses
  15. Experience Company Growth and Discovery with Employee-Driven Communication
  16. Should You Still Be Concerned about ADA Website Compliance?
  17. Become a Tax Resource for Members
  18. The Member Service Experience
  19. 5 Things Credit Unions Can Learn from Cyber Attacks
  20. Are You Ready to Adopt a Continuous Performance Management System?
  21. Building a Website with the User in Mind
  22. What Is a DDoS Attack and Why Should Credit Unions Be Concerned?
  23. Don't Get Snagged on ADA Compliance Requirements
  24. The Role of HR and Hiring Managers in the Candidate Experience
  25. Anticipating Change with a Succession Plan
  26. The Planning Process - Improved
  27. Consumer Attitudes Toward Digital Advertising
  28. The Quest for a One-Stop Shop Financial App
  29. Learning Management Systems: What Credit Unions Should Consider
  30. The Performance Management Conundrum: Structure vs. Creativity
  31. How Useful Are Member Personas for Credit Union Marketing Teams?
  32. Volunteer and Young Board Members Need Development
  33. 3 Website Design Trends for 2019
  34. Credit Union Compensation: Philosophy or Strategy?
  35. 7 Tax Changes Your Members Need to Know About
  36. Americans' Lack of Financial Literacy Is an Opportunity for Credit Unions
  37. Is Your Executive Compensation Still Appealing?
  38. Content Marketing: Well Worth the Effort
  39. What's Hot in Performance Management Technology
  40. What Credit Unions Should Do with Ambiguous ADA Standards
  41. Your Social Media Accounts Deserve Quality Content
  42. Continuous Performance Management is Disrupting HR
  43. 2 Big FinTech Goals for Credit Unions
  44. 3 Succession Plans Your Credit Union Needs
  45. The Website Audit Your Credit Union Needs
  46. Popular DDoS Mitigation Methods in 2019
  47. The Importance of Creating Quality Content
  48. Why HR Should Take Advantage of Employee Self Service
  49. Consumer Appetites in Mobile Innovation
  50. Build Up Membership Through Supportive Savings Programs
  51. Why You Should Invest in an Applicant Tracking System
  52. Shifts and Trends to Know About in E-Learning
  53. Do You Know Why Payday Loans Are Used so Much?
  54. Selling Payments and Wealth Management Services
  55. Optimizing Websites for Voice: What You Need to Know
  56. Preparing for Compensation Transparency
  57. 3 Ways Credit Unions Can Prepare for a Cyber Extortion
  58. People Analytics: Bringing HR and Data Together
  59. The Win-Win Results of Prize-Linked Savings for Credit Unions and Members
  60. Wanted: Apps for Clarification and Simplification
  61. Prioritizing the Credit Union Employee Experience
  62. The Credit Union Advantage for the Digital Customer
  63. 5 Guideposts to Measure Your Brand Promise Against
  64. 6 Factors for Choosing the Right ESS System
  65. Content, Tools, and Channels to Capture Consumer Attention
  66. The Best Compliance Training with New Topics You Will Need
  67. A Simple Way to Unify Your Marketing Efforts
  68. Is Your CMS the Right Fit?
  69. Keeping Up with Digital Lending Convenience
  70. How to Identify What You Want in an ESS
  71. 4 Steps to Increased Social Media ROI
  72. Are Your Landing Pages up to Snuff?
  73. How Credit Unions Can Formalize the Branding Process
  74. Are You Missing Out on the Power of Video?
  75. Making Sure You Have the Right Leaders in the Right Seats
  76. Credit Unions Can Compete with Shadow Banks
  77. What the C-Suite Wants out of Social Media
  78. The Dream Team for Successful Online Customer Interactions
  79. Empowering Employees and HR with the Latest Technology
  80. Omnichannel Delivery: Banking Based On Members
  81. Caution: Customers Don't Always Ask for What They Want
  82. Is Your Credit Union Supported by the Four Pillars of Digital Banking?
  83. Bankers associations’ opposition to mergers does a disservice to member banks and to consumers
  84. How to Generate Content with Fewer Resources
  85. Don't Underestimate the Power of Financial Education
  86. If Your Site Isn't Mobile Optimized, You're Losing Out
  87. Don't Undervalue Your Brand Promise
  88. The Quickest Way to Find the Right (and Safest) CMS
  89. How Credit Unions Can Embrace Storytelling in Marketing
  90. Serving the Underbanked and Millennials
  91. Protect Your Credit Union with a Website Accessibility Response Plan
  92. 3 Factors Impacting Credit Union Compensation Plans
  93. Americans Trust Their Financial Institutions for Tax Advice
  94. Credit Unions Have an Opportunity to Help Their Members Through Tax Season
  95. Underestimate the Onboarding Process at Your Peril
  96. Leveraging Social Media for Member Engagement
  97. Finding the Best Platform for HR Technology
  98. 3 Brand Promises Credit Unions Can Learn From
  99. Achieving the Golden “Narrative Transport” in Brand Storytelling
  100. Remaining a Player in the New Home-Buying Experience
  101. You Know You Need an LMS — Now What?
  102. Predict the Future of Mortgage Lending with Analytics
  103. The Secret to Future-Proofing Your Organization
  104. You Might Already Have the Solution to Your Current Talent Competency Gap
  105. The Process of Crafting a Relatable, Moving Brand Story
  106. Leverage the Resources of Trusted Experts for Tax Season 2019
  107. Identify how chatbots will help you
  108. Conversational Commerce and the Rise of the Chatbot
  109. Prepare for integration
  110. Do you need a new compensation strategy for multigenerational staff?
  111. Keep content relevant, short, iterative and engaging
  112. Three ways to up your social media game
  113. Three Ways to Enhance Compensation Strategy for an Age-diverse Workforce
  114. What others are doing
  115. Common Mistakes in Compliance

Related Trends

  1. Conversational Commerce and the Rise of the Chatbot
  2. Identify how chatbots will help you
  3. Prepare for integration
  4. Remaining a Player in the New Home-Buying Experience
  5. Predict the Future of Mortgage Lending with Analytics
  6. Is Your Credit Union Supported by the Four Pillars of Digital Banking?
  7. Omnichannel Delivery: Banking Based On Members
  8. The Quickest Way to Find the Right (and Safest) CMS
  9. A Content Management System Will Make Your Life Easier
  10. Credit Unions Could Replace Predatory Lenders
  11. 5 Things Credit Unions Can Learn from Cyber Attacks
  12. Do You Know Why Payday Loans Are Used so Much?
  13. What Borrowers Wished Credit Unions Knew
  14. Serving the Underbanked and Millennials
  15. Should You Still Be Concerned about ADA Website Compliance?
  16. Don't Get Snagged on ADA Compliance Requirements
  17. Consumer Appetites in Mobile Innovation
  18. The Quest for a One-Stop Shop Financial App
  19. Wanted: Apps for Clarification and Simplification
  20. What Credit Unions Should Do with Ambiguous ADA Standards
  21. What Is a DDoS Attack and Why Should Credit Unions Be Concerned?
  22. Building a Website with the User in Mind
  23. 3 Ways Credit Unions Can Prepare for a Cyber Extortion
  24. 3 Website Design Trends for 2019
  25. The Credit Union Advantage for the Digital Customer
  26. Optimizing Websites for Voice: What You Need to Know
  27. Is Your CMS the Right Fit?
  28. 2 Big FinTech Goals for Credit Unions
  29. Caution: Customers Don't Always Ask for What They Want
  30. The Website Audit Your Credit Union Needs
  31. Keeping Up with Digital Lending Convenience
  32. Protect Your Credit Union with a Website Accessibility Response Plan
  33. Credit Unions Can Compete with Shadow Banks
  34. Popular DDoS Mitigation Methods in 2019

Industry insights
to your inbox!

Subscribe