The League has reported for a couple of years now that Walmart could be a serious competitor to credit unions with its goal of providing low cost, easy-to-use financial services to the under-served and unbanked. It is now time to start thinking of Google and T-Mobile as competitors as well, particularly within a market that credit unions need – the millennials.
According to a recent study from Accenture, 72 percent of consumers ages 18-34 would bank with such institutions if they offered financial services.
“It’s not only that they can, they will,” emphasized Jim Kern, head of sales at Infosys’ Finacle Banking Division in North America. “It’s another awakening call to say if we want to capture those members 18 to 34, which are the ones we really need, then we really need to put those services out there to compete with those institutions or non-institutions that are out there.”
That disruption from new competitors has changed the competitive landscape for credit unions, said Kern, noting that 10 years ago the competition was mostly from traditional opposition – big banks and community banks. Those competitors are still there, but new players keep getting into the mix.
Effective business models for the next decade, according to Kern, will be built around the dual strategy of “renew and new,” meaning renewing the core business, but innovating with new ideas along the way.
Read the full story at the Credit Union Journal.