It’s not just the Fintech startups that are attempting to enter the financial services space. Telecom companies continue to strive to enter the financial services business as well. T-Mobile, in a partnership with Bankmobile, is offering its mobile customers a mobile app-based checking account. The T-Mobile account comes with a Mastercard debit card, money management (PFM), remote deposit capture, P2P, and the ability to use mobile payment methods such as Apple Pay, Google Pay, and Samsung Pay.
If you recall, two years ago, T-Mobile shut down its previous mobile banking account offering, which was aimed at the unbanked due to minimal adoption. So... why are they back two years later with a new mobile checking account? In an ABA/Morning Consult study, 7 out of 10 Americans now bank digitally, but just 13% of traditional providers believe that their core systems can keep up with the pace of innovation according to a study done by the Financial Brand.
John Legere, the CEO of T-Mobile, says: “Traditional banks aren’t mobile first, and they’re definitely not customer first. As more and more people use their smartphones to manage money, we saw another opportunity to address another customer pain point. You worked hard for your money, you should keep it, and with T-Mobile Money, you can!”
All of us who have been in the financial services space for any length of time know that there are limitations to how fast core processors can rewrite or update their software. We also know that the quote from the T-Mobile CEO, “You work hard for your money, and you should keep it,” has been a common theme in the credit union messaging playbook for years. We also know that regardless of what processing system that bank alternative providers interface with to provide transactional capabilities, those core limitations they are criticizing will exist in the solution they choose as well.
The answer to competing with the alternative providers like Telecomm companies is a rock solid reputation of trust (which credit unions have), understanding the future demands of their membership, the ability to provide enhanced products and services to meet the changing requirements of a credit union’s membership, AND the ability to deliver a mobile offering that can be customized based on the business needs/member preferences of the credit union.
Ask yourself this question. Whose reputation is a consumer going to trust for the safekeeping of their money and privacy of their information? After all, trust is created through integrity, longevity, and reputation. Credit unions have long been trusted custodians and advisors. The fact that their account holders are member-owners says it all!