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

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