Please note: this article was started when Bitcoin crossed $10,000. Bitcoin is now at $18,000 (maybe even higher as you read this).
When thinking about Bitcoin and Amazon it might be easy for one to ignore the relevance to their own situation. What does a cryptocurrency and an online retailer have to do with me (or my institution)? The answer – everything. It isn’t about Bitcoin or Amazon per se, but rather what they stand for – The new digital world.
Digital Transformation is a term that is relatively new, but a term that is becoming increasingly more popular. What it means, in short, and to be rather blunt, is that your old ways are broken and we need to reinvent using the new technologies available, namely the internet and mobile devices.
For many credit unions that have been very successful for many years, we are stuck in the old adage of “if it ain’t broke, don’t fix it.” However, unfortunately, this old adage is just that – Old. In the new digital age that we live in today, we have to constantly think about reinvention and transformation – not just every 5 years but every month.
To bring Bitcoin and Amazon into the mix, just think about this… What was the leading Cryptocurrency 10 years ago, and what was the leading retail store 10 years ago? I am going to guess you wouldn’t say either Bitcoin or Amazon.
While Bitcoin and Amazon may seem like extreme outliers, it’s important for credit unions to realize that they are not anomalies. Consider the fact that none of these following items had even existed 10 years ago:
- Android (2008)
- Apple App Store (2008)
- iPad (2010)
- Google Chrome (2008)
- Snapchat (2011)
- Airbnb (2008)
- Spotify (2008)
- Stripe (2011)
- Square (2010)
- Venmo (2009)
- Instagram (2010)
- Kickstarter (2009)
- Uber (2009)
- Pinterest (2010)
- 4G (2010)
- Alexa (2014)
This is a small list of the many young businesses that heavily impact our daily lives. These are not innovative technologies reserved for the techies and early adopters. Most of us (and your members) use these items regularly, if not frequently throughout the day. Many of these technologies we have become essentially dependent on for day-to-day communication, leisure, business, travel, and even payments. In less than 10 years, these ideas have gone from zero and exploded in popularity.
What else do all these companies/products have in common?
In today’s world, convenience is king. All those aforementioned innovations discovered ways to make life easier for end-users. They have even helped to create a world in which convenience is expected. Try to imagine a day in which 4G connection is universally lost, Instagram crashes, Square fails, and ride-sharing services are immediately no longer an option. People wouldn’t be living their daily lives just like they did 10 years ago – it would be chaotic and considered to be a tragedy. It would not only create panic for those trying to update personal social media accounts, but it would interrupt business, trade, and communication as we have become reliant on all these technologies.
If it can’t be done online or with the touch of a finger, it loses. Large banks offer many of the same products/services as credit unions, but they win new accounts. Why? Because of their mission statement, name recognition, outstanding service record, interest rates, or proximity to home? No. Your potential new member opened an account at the major bank across town because they deposit checks remotely, check balances on their smartphone app, chat with a person (or helpful bot) online when help is needed, and he/she finds significant value in these digitally provided services.
- Data Analytics
These companies are not here by chance. They are not serendipitous failures like potato chips or SuperGlue. These companies saw a need, found evidence that there was an opportunity, and continually improve their offerings with the use of data analytics. For years, a strong argument has been made for the idea that Google knows more about us than we know about ourselves. As scary as this may sound, with the proper governance, companies like Google can use this data to improve business decisions and our daily lives. The data Uber collects helps to monitor, influence and predict things such as supply and demand, pricing, incentives, marketing, and strategic growth. This data is even used to better understand and improve traffic flows, urban planning, infrastructure needs, pollution, and commerce. These companies use this data to improve offerings and ultimately grow into the massively popular organizations they are.
Finally, it is important to keep in mind, these concepts are not only for new and innovative digital products. Like the major banks, many other modern successful businesses might not have launched new products, but they have kept up with the wave of digital transformation. Read more about how companies like Starbucks and CVS Health have digitally reinvented their business models to increase convenience and maintain relevancy to modern consumers here: http://blog.onapproach.com/dont-miss-the-boat-why-credit-unions-need-to-digitally-transform-now
Credit Unions can’t afford to continue live in the “If it ain’t broke, don’t fix it” age. The mindset needs to switch to realize that “If it ain’t broke… someone else will break it”. Then that person or company will improve upon it, make it more convenient for the end-user, and your old model is beyond fixing, because it has been re-invented. More optimistically, credit unions need to think more like Amazon or Bitcoin and live by the idea that “If it ain’t broke, re-invent”.