With data breach issues ever-present in the news, reluctance to move forward with new digital technology might actually cost credit unions and other financial institutions. Due to competition from new fintch company apps and other longtime high-tech players, the cost could amount to 70 percent of a potential $400 billion in revenue over the next three years, according to an article in Credit Union Times.
The information was derived from new Cisco research, “Roadmap to Digital Value in the Retail Banking Industry,” which outlined the value at stake for retail banking, as well as a path to digital success.
Some key solutions, including sales and service transformation, mobile payments, analytics, video advice, and cybersecurity, drive more than 90 percent of the value for retail financial institutions, according to the Cisco study.
The article explains, “To calculate digital value, Cisco conducted a comprehensive economic analysis involving 16 industries, including financial services. The analysis was rooted in customer engagements and evaluation of 350 private sector digital use cases. Cisco’s analysis estimated that digital innovation in retail banking would drive $405 billion in digital value from 2015 to 2018.”
The research points to the need for credit unions to digitize to capture a fair market share, despite clear concerns. Another recent Cisco study, “Cybersecurity as a Growth Advantage” surveyed 1,014 senior finance and line-of-business executives globally and found that 71 percent agreed that cybersecurity risks and threats hinder digital innovation in their organizations.