Disruptive technologies

Disruptive technologies are innovations which can significantly change the way industries, businesses, and consumers operate. And, since new technology attributes are often better than legacy systems or processes, it becomes “disruptive” and replaces a well-established process, product, or technology.

Most technology is considered sustaining rather than disruptive. Sustaining technology evolves slowly and steadily over time. To be considered disruptive, technology must be easily accessed by a majority of the population. A disruptive technology is usually one that enters the mainstream and changes the way most people and consumers think or behave.

Some tech trends that could be considered disruptive that credit unions are looking to use include Internet of Things (IoT); Artificial Intelligence (AI); Robotic Process Automation (RPA); Blockchain & Distributed Ledger Technology (DLT); Open Banking; and Big Data Analytics.

Risk managers should work with senior leaders to develop an explicit statement of risk appetite in relation specifically to innovation. Consider including directives related to which risks are negotiable and where the credit union will draw a hard line.

• Determine within which business areas you’ll seek to be an earlier adopter of innovation and where you are comfortable joining later.
• Where will you take on risk, what forms of return are acceptable, and how are these tracked?
• Is the cost of risk management for a particular product or service reflected in its business case?

As competitive businesses, credit unions need to ensure the financial reward or upside is compelling enough to invest in new technologies and partnerships.

Infrastructure can greatly influence the success or failure of any new program, particularly those that are disruptive, innovative, or highly technical in nature. Infrastructure is not only important during research and development, but also once your product or service is ready to hit the market, it must have the right infrastructure to support it.

Consumers and regulators expect organizations to identify, address, and mitigate risks such as privacy and protection of consumer data associated with new technologies. This means keeping abreast of current and upcoming consumer protection legislation and regularly evaluating its impact on new products and services.

Risk managers should contribute to innovative development through risk identification, analysis, and control. To ensure that risk controls are fully integrated into the final product, they should be engaged at all stages of development, testing, validation, implementation, and ongoing monitoring.

Credit union employees may find new technologies unsettling. It can challenge their expertise with legacy systems and exasperate fears of skill loss or standing within the organization. These fears can lead to resistance and impede adoption and desired results.

Your employees and their skills are crucial to the resilience of the credit union. Skill levels, employee turnover, job satisfaction, training, and learning opportunities should be carefully monitored.

Providing people with the tools and skills required to evolve and adapt to change will contribute to improved resilience and innovation. Ensuring that people are engaged with the program of change and keeping them motivated will help to successfully navigate disruptive technologies.

CSR is an ethical framework that, when used correctly and strategically, enables companies to develop innovative ways to create value and new ways of operations that may be more efficient in resource utilization and will benefit the credit union in the long-term. In today’s competitive financial landscape where consumer preferences are constantly evolving and social media is king, being a socially responsible credit union is much more important than ever before.

With any change moments of crisis can occur, which usually generate chaos. Specific efforts must be made to maintain control and resume operational standards. Having adaptive leaders and an agile team can help your organization respond positively to pressure, setbacks, challenges, and change in order to achieve peak performance.