In June, Facebook and dozens of payment companies, venture capital firms, and nonprofits announced a plan to launch a new cryptocurrency called Libra in 2020.
Given Facebook alone has more than 2.4 billion active users around the world, Libra promises to be a force to be reckoned with. Though Libra will be a digital currency, unlike Bitcoin and other cryptocurrencies, it will be backed by actual assets that may include bank deposits and government securities. That should make Libra’s value much less volatile, and make it more appealing to consumers.
Facebook and other members of the Libra Association say one of their principal goals is to give greater financial access and power to the unbanked and underbanked. That means Libra is aiming squarely at a role that has been a traditional strength of credit unions.
To continue their prominence in that role and ensure long-term viability, credit unions must take action now. Here’s how to start.
Reset Your Strategic Plan
Digital payments should be a cornerstone of every credit union’s long-term strategic plan. If it isn’t, your organization is already behind. Even if you’ve already embraced digital finance, the looming shadow of Libra should still prompt an immediate review of your business strategy.
Libra is open-source, which means anyone can build on its framework. That amplifies the potential danger to credit unions, since many other entities both inside and outside of financial services could use it to create their own digital currencies and offer new financial solutions.
On the other hand, the open source architecture also presents opportunity to forward-thinking credit unions – imagine integrating cryptocurrency or a digital wallet into your credit union’s suite of products and solutions. It’s a big undertaking, but it’s already been pioneered in the United Kingdom, by the Mensarii Cryptocurrency Credit Union.
Fortune favors the bold: If you don’t think big, you could well be swallowed up by disruptive currencies that are set to completely change how we understand and interact with money.
Sharpen Your Digital Experience
As with all innovations, many current and potential credit union members won’t be eager to embrace cryptocurrencies – at least not at first.
That doesn’t mean you can count on slow-adopters to sustain your business. To the contrary, it makes it even more important that your credit union polishes its online and mobile banking experiences.
Why? Because a major appeal of Libra and other cryptocurrencies is the ease of transacting with them. If your online and mobile offerings strike members and prospects as clunky or behind the times, you’re practically begging them to consider moving to cryptocurrency platforms or to other financial firms offering a smoother experience.
Work hard to develop a seamless user experience online. In addition to offering intuitive functionality, strive to bring joy or delight, keeping in mind that ease of use and visual appeal are some of the best ways to delight a user.
Strengthen Customer Service & In-Branch Experience
Though it may seem counterintuitive in a discussion centered on digital transactions, there’s still an important place for in-person interactions.
No matter how far financial services technology progresses, there are many occasions where people still want a human connection as they navigate financial transactions and decisions.
Facebook and others relying on Libra may struggle to meet this need. That presents a great opportunity for credit unions, since members often feel a particularly strong personal connection with them in comparison to other financial institutions.
At the same time you’re working to elevate your digital experience, you should also focus on strengthening your credit union’s person-to-person experience. Doing so starts with a full-spectrum evaluation of your customer service, encompassing everything from the phone calls to the experience in your service centers.
Look beyond the actual interactions with your employees and consider the environment that facilitates them. Scrutinize details like hours of operation, phone menus and even what members hear when they are put on hold.
Rise to the Challenge
Though Facebook’s participation has dominated reporting on Libra, it’s important to appreciate that the social media giant is just one of many powerful entities uniting to create this new currency.
Other members of the Libra Association include Visa, MasterCard, PayPal, eBay and Uber. That’s just a start: The group hopes to grow to 100 member organizations, each contributing $10 million dollars toward revolutionizing money and payments all around the world.
With that kind of muscle, Libra clearly has the potential to fundamentally change the way consumers understand and interact with money and finances. If you want your credit union to prosper in the long-term, start planning and taking action now to position yourself for success in a new financial world.
As you do, it’s important to create an environment in which your team doesn’t resist the future, but instead embraces it – while leveraging key differentiators that set you apart and can foster growth through whatever the Information Age throws at you next.