New Technology in the Financial Industry – Pluses & Minuses

Ruth Jenkins







Ruth Jenkins
President & CEO

Q:  If there is one thing that seems to be certain in today’s consumer landscape, it’s that change is happening at an ever-increasing rate.  Is that true for the financial services industry?

A:  Absolutely!  New technology, in particular, in financial services is already transforming the financial world, and the traditional financial services landscape is set to rapidly change even more in the next five years.  These are some of the areas impacted:

  1. Security
  2. Convenience
  3. Financial Responsibility

Q:  What are some examples of new technology and security?

A:  Here are a few examples:

  1. Biometric authentication
    1. Embedded in credit cards and debit cards
      1. A tiny scanner will be embedded inside the card
      2. When you get your card there will be a little bit of plastic over the scanner
      3. You peel off the plastic and swipe your finger — you can choose which finger or thumb you’d like to use — three times over the sensor, forever embedding your fingerprint inside the card
  1. Then, when you want to use an ATM or make a purchase, you pull your card out and swipe your finger across the sensor to activate the card for a transaction
  1. Iris recognition
    1. To help protect against ATM hacks such as skimmers
      1. Requires no card or PIN
      2. Scans a user’s iris, matching it to a known database
      3. A match between the user’s “live” iris and a biometric iris template contained within a database initiates the ATM transaction

Q:  How will advances in technology help to enhance the member experience?

A:  There are several areas that could be affected by advanced technology:

  1. The branch experience
    1. The in-branch experience of the future might be more like shopping at an Apple store
    2. The typical in-branch member will be seeking help involving a personal interaction since most other transactions will be able to be done online
    3. This would be a way for members to engage more directly with the financial institution and its products, just like in an Apple store, directing customers to interact with tech kiosks for some transactions and reserving person-to-person interaction for answering questions or addressing needs unique to the individual consumer
    4. The self-serve kiosks will give customers convenient, sometimes 24-hour options for conducting banking business
  2. The mobile experience
    1. Convenience
      1. Talk to experts by teleconference
        1. Meet a mortgage loan expert via teleconference in the branch rather than in person
        2. As the technology becomes more mainstream, eventually you’ll be able to teleconference with staff from home
      2. Virtual teller
        1. The virtual teller is a convenient and secure user interface for mobile banking apps that emulates the experience of interacting with a human teller
        2. The virtual teller experience is made secure by fusing face and voice biometric authentication technologies
        3. The virtual teller looks at the user and hears their voice to confirm identity
        4. Users can check their balance, wire money, apply for a loan and more by simply speaking to the virtual teller in their banking app
      3. The payment experience
        1. Plastic debit cards might soon be replaced by a contactless sticker — a thin adhesive that can be placed anywhere and used for purchases in place of a card
        2. Smartphone payment app that not only lets you pay but generates reports on your spending habits
        3. Contactless payments, for example, are making it easier for shoppers to purchase goods and services

 Q:  How will new technology help members take charge of their financial future?

A:  As we’ve discussed before, learning to be financially responsible with all of the financial tools available these days is very important in ensuring a secure financial future.

  1. Thanks to all of the mobile tools available to members today, they are much more up-to-date concerning their accounts, savings habits and assets
  2. They know a lot more about opportunities and threats that exist in the financial world. As a result, they are much more independent and self-determined
  3. Because of the increased knowledge of the transactional side of financial products and services, financial institution staff will become more like advisors and coaches to help develop a financial plan of action
  4. Online educational tools will become more available and more sophisticated
    1. These tools will tailor learning to target consumer segments (millennials, baby boomers, Gen X) with online modules designed to engage them with relevant education for their life stage challenges and goals
    2. They will gain the knowledge and skills they need to develop true financial capability and gain a better understanding of how to use financial products and services

Q:  Are there any drawbacks to all of these technological advances happening within the financial industry?

A:  While these advances, for the most part, have the end goal of making the member’s experience as efficient, relevant and convenient as possible, they also come with some cautions:

  1. Members must become even more vigilant in guarding their personal information in order to avoid id theft/fraud.
    1. Purchasing online requires attention to how secure the buying process is
    2. Checking credit reports periodically is a necessity
    3. Not using public computers or public WIFI’s to conduct financial business is a must
  1. Members need to be more proactive in creating a financial budget and adhering to it even as technology makes it easier to access their funds
    1. The danger is that impulsive or ill-informed decisions could be made due to more direct, more frequent and faster interaction with financial services
    2. Take time to consider the implications

Q:  What are some examples of technology that you have seen implemented at HFCU that just a few years ago was only on the horizon?

A:   I would say that there are many innovations that have been instituted at HFCU.  Here are some examples:

  1. Mobile Banking
    1. Mobile Deposit – Allows you to deposit checks to your account from anywhere you can get a cell phone signal.
    2. Card Controls – Allows you to switch cards on/off with the tap of a button for added financial safety and control.
    3. Loans on the GO! – Allows you to apply for a loan from anywhere you can get a cell phone signal.
    4. Replacement Cards – Allows you to order a replacement card for a card that is damaged. You will receive a new card with the same card number in the mail within 5-10 business days.
    5. Travel Notifications – Allows you to submit debit/credit card travel notifications to our Card Services department. This provides you a self-service channel to submit requests that go directly to the Card Services department. The travel indicators will be applied by Card Services during normal business hours. Click here for step-by-step instructions for using this feature.
    6. Stop Pay – On single checks
    7. Rewards – View and redeem Heritage Choice Reward points
  2. Instant issue Visa Credit Cards – Heritage Federal Credit Union offers four instant issue Visa credit cards. With Instant Issue, members can receive their activated Visa card instantly at any branch upon approval. Visa credit card accounts can have an introductory rate as low as 3.99% APR on purchases and balance transfers for the first 12 billing cycles.
  3. e-Sign – eSign is an electronic signature, or eSignature, that HFCU members can use for electronically signing a loan document. This now allows us to send loan documents securely to members via email to obtain signatures required for opening a new loan.  This allows members the convenience of obtaining a loan without physically visiting a branch. With eSign, you can:
    1. Quickly and securely access and sign loan documents
    2. Easily upload and send loan documents for others to sign
    3. Send reminders and check signing status any time
  4. Online switch kit – Fully Automated
    1. Easy Implementation
      1. Instant account setup and direct deposit transfer
    2. Real-Time Switch confirmation
      1. Auto-debit payee notification of the new account information and update their billing information (utilities, insurance, club memberships, etc.)
      2. Balance Assist for recommended dollar amounts to leave in a former account
    3. Paperless
    4. Automatic account closure processing when the switch is complete