Credit unions looking to stay a vital option in the financial services marketplace should add cross-border payments to their digital transformation. Cross-border payments are “transactions between banks, financial institutions, businesses, or individuals operating in different countries that may or may not share a border.” Cross-border B2B payments are expected to exceed $40 trillion worldwide by 2024, up from $37 trillion in 2022, according to a Juniper Research report.
We live in a world of fast and faster, and this has never been truer than with how we exchange money. Credit unions, challenged as they are with staying relevant in a world of shrinking branches, online banking, chatbot customer service, and costly technology, must revitalize their relevancy as the global demand for instant cross-border payments can help credit unions remain vital and competitive.
FedNow, the instant payment system of the Federal Reserve, will create a pivotal opportunity for the payment industry to modernize the nation’s payment system and establish a safe and efficient foundation for the future. If The Federal Reserve believes faster payment services will become widely used and yield economic benefits for individuals and businesses, credit unions should believe it too.
At issue, of course, will be the ability of FedNow technology to integrate with the myriad of apps and platforms all businesses use today. Credit unions have suffered the most of any of the financial institutions in that they don’t have the capital to invest in the powerful, dynamic, and secure systems of the big banks.
But consumer preferences for instant payments—domestically and globally—are on the rise. Credit unions can seize on this increasing consumer demand and the momentum spurred by FedNow to reevaluate their global remittance payment infrastructure. But they have to put their digital transformation efforts front and center, and in the fast and faster world, credit unions have never been more focused on digital transformation. It’s necessary they provide streamlined, accessible, and secure digital products that offer greater convenience without sacrificing outstanding customer service.
Digitization doesn’t just create financial tools that give members more options for managing their money—it also generates valuable data on member preferences, pain points, and behaviors, which enables credit unions to personalize services and address problems quickly.
But if instant cross-border payments are the hottest new category in finance, and credit unions have their other services acceptably digital, focusing on this instant cross-border can go a long way to helping them remain in the conversation. It offers its members a service that keeps them from having to use the big impersonal banks they loathe. And that’s one way to stay alive.