In the rapidly evolving financial landscape, Canadian credit unions are faced with increasing pressure to modernize their digital banking services to remain relevant, engage members, and grow their memberships. Members expect seamless, secure, and convenient banking experiences, so digital transformation is no longer a luxury but a necessity for credit unions to remain competitive. However, implementing or replacing an omnichannel digital banking platform is a significant undertaking that requires strategic planning, member-centric thinking, and an understanding of evolving technology. This article will explore the crucial factors Canadian credit unions need to consider when implementing a digital banking replacement.

1. Member Experience First

The essence of any digital banking replacement is to enhance the member experience. Credit unions must prioritize a solution that not only improves user experience (UX) but also meets the unique needs and preferences of their members. For example, younger members may prioritize mobile-first features, while older members may appreciate a streamlined online experience. A member-focused approach includes:

• Ease of use: intuitive design, easy navigation, and simplified processes to prevent friction and frustration
• Omnichannel access: ensuring consistent service across mobile, online, and even in-branch platforms
• Personalization: offering tailored products, insights, and recommendations based on members’ financial habits

2. Scalability and Flexibility

A scalable digital banking solution allows credit unions to adapt to changing demands without frequent, costly overhauls. As member bases grow and technology evolves, the platform should be flexible enough to integrate new features, meet regulatory changes, and handle increased transaction volumes. When considering digital banking solutions, credit unions should look for:

• Modular architecture: components that can be independently updated or expanded.
• Open API integrations: allowing the credit union to easily incorporate new fintech applications or third-party services.
• Cloud-based solutions: a cloud-first approach provides scalability, improved security, and easier access to innovations.

3. Security and Compliance

Security is a crucial aspect in digital banking, since credit unions manage sensitive member data and financial transactions. Cyber threats are continually evolving, so a digital banking replacement has to be equipped to handle current and emerging risks. Beyond basic security, compliance with regulatory standards (such as ISO 27001, Open Banking, and privacy regulatory requirements) is also crucial. Key security and compliance factors include:

• Multi-factor authentication (MFA): enforcing strong user authentication
• Data encryption: protecting member data at rest and in transit
• Real-time fraud monitoring: using AI-driven tools to detect and respond to suspicious activity immediately
• Regular audits and compliance checks: ensuring the system consistently meets regulatory standards

4. Vendor Selection and Support

Choosing a suitable vendor is as important as the platform itself. Credit unions should seek vendors with a good track record in the financial industry, a deep understanding of the credit union’s business and technology requirements, and proven success in digital transformation. Key aspects of a strong vendor partnership include:

• Requirement fulfillment: the capability of the vendor to fulfill the credit union’s requirements
• Avoidance of unnecessary customizations: prioritization of out-of-the-box functionalities over customizations whenever possible, ensuring that upgrades and ongoing support can be easily managed downstream
• Training and support: onboarding and ongoing training to help staff and members adapt to the new system
• Robust Service Level Agreements (SLAs): guaranteed uptime, swift issue resolution, and clear escalation processes

In order to successfully select a suitable vendor, it is recommended that the credit union establish a comprehensive Business Requirements Document (BRD) before their market scan and Request for Proposal (RFP) process.

5. Cost and ROI Analysis

Finally, financial considerations are critical in a digital banking replacement. Credit unions should evaluate all key costs associated with the replacement, including licensing, implementation, hosting, and ongoing maintenance fees. Furthermore, they should consider the return on investment (ROI) and how the new platform will impact member acquisition, retention, and engagement.

• Total Cost of Ownership (TCO): understanding all related key costs to avoid unexpected significant expenses
• Operational efficiency gains: assess how automation and streamlined processes will save time and reduce operational costs
• Member growth potential: enhanced features may attract younger, tech-savvy members, contributing to long-term growth

A Final Thought

Recent Development in the Canadian Market Regarding Digital Banking

Optimus SBR has learned of the recent decision by Central 1 to decommission Forge, its digital banking platform, over the next three years, and we are aware that this decision impacts one-third of the credit unions in Canada. If your credit union is among the organizations impacted, this development presents an opportunity to enhance member experience and improve operational efficiency. With careful planning through business requirements gathering and robust vendor selection process, your credit union can lay the foundation for a thriving digital future and deliver meaningful value to your members. Optimus SBR has helped many Canadian credit unions with similar initiatives.

How Can Optimus SBR Help Your Organization?

1. We can help your organization to develop a comprehensive set of business and technology requirements for a new omnichannel digital banking solution with consideration for important capabilities arising from developments in the Canadian financial services sector, such as Open Banking and privacy regulations.
2. We can help leverage your organization’s prioritized criteria to perform a market scan of potentially suitable vendors to identify a select few for direct engagement.
3. We can assist in engaging suitable vendors by providing insight into how well their solutions align with your organization’s requirements and assessing the total cost of ownership.

Optimus SBR’s Technology Services Practice

Optimus SBR is an independently owned management consulting firm that works with organizations across North America to get done what isn’t. Our dedicated Technology Services team helps organizations align technology with business objectives to drive innovation and efficiency through expert planning and transformative solutions.

Contact us to learn how Optimus SBR can assist your credit union with digital transformation journey. Optimus SBR is ready to help your organization.

Doug Wilson, Senior Vice President and Technology & Data Practice Lead
Doug.Wilson@optimussbr.com

Nas Farzan, Vice President, Technology Services Group
Nas.Farzan@optimussbr.com