Technology in 2010

Technology in 2010

Merrick, Bill

Welcome to 2010. It’s 6:30 a.m. and you’ve turned on your Web appliance to start the day. Your personal ultraintelligent electronic agent residing on the Web greets you in a voice and personality you chose-say John Wayne.

“Howdy, pilgrim. Your flight to Boston this morning has been delayed, but I booked you on another flight leaving 30 minutes later. It’s supposed to rain, so take an umbrella. The stock you wanted me to track hit the price point you were looking for so I purchased 100 shares last night. Information about the consumer price index is waiting for you when you’d like it. And circle the wagons, pilgrim.”

This scenario, says Daniel Burrus, author of “Technotrends” and founder/ chief executive officer (CEO) of Burrus Research Associates in Milwaukee (, is part of the coming shift from the information age to the communication age. “Informing is one-way and static; communicating is two-way and dynamic,” Burrus says. “You can use the Web for informing, but it’s far more powerful if you use it for communicating. Credit unions need to think about how to communicate and develop better relationships with members. Technology can help.”

Burrus says credit unions should think “both/and,” not “either/or,” when developing relationships and preparing for the future. “Twenty years from now, will all bookstores be broadband, multimedia versions of No,” Burrus says. “There will still be book lovers who want to go into a bookstore, sip coffee, and look at a book before buying it.

“The future is wireless, but it’s also wired. The future is digital, but it’s also analog. The future is fiber optics, but it’s also copper.”

How does this apply to financial services? “My mother, who’s 84, likes to go to the credit union. I don’t have time to go,” Burrus explains. “Serve us both. It’s a `both/and’ world.”

This means credit unions must find ways to do “the old, old thing” in “new, new ways,” Burrus adds. “What’s the old, old thing? Relationships, trust, honesty, integrity, and serving members. There are new tools to help credit unions do those things. The question is, how will credit unions carry past successes into the future?

“There’s no advantage in keeping up with technology. It’s a fool’s game,” he continues. “Credit unions need to look at how to gain an advantage. Credit unions have always had a stronger relationship with their members than other financial institutions have had with their customers. But technology could make credit unions lose their uniqueness-or not. The best way to keep that from happening is to use technology to gain a strategic advantage.”

Credit unions’ mantra in this new age is member access. Technology promoting access will do well in the future, says John Davis, president/CEO of Stanford Federal Credit Union in Palo Alto, Calif.

“We want our members to have access to us from anywhere,” says Davis. “So it’s important that credit unions have a Web presence. Already, 85% of our transactions are being done electronically, and we’re continually upgrading our member accessibility. Credit unions are attempting to get back to a one-to-one relationship with members using data mining and neural networks that predict member behavior and customize products.”

Stanford Federal soon will offer a sophisticated loan approval system developed by CyberBranch Corp., Palo Alto, Calif., that delivers funds to members upon approval within 30 seconds. “It’s a decision model based not only on credit score but on business rules and previous member behavior,” Davis explains. “It’s for all types of consumer loans, but not mortgages yet. It lets us have different business rules for different types of loans.”


What other new technologies will shape credit unions’ future? Burrus cites the following:

Desktop video conferencing. This lets people talk face to face via computer. Not many people use it now because the quality of video and audio isn’t very good. “But it will be completely different two years down the road,” Burrus says. “Video conferencing will be built into every computer, just like CD ROM is part of every machine today. We’ll have much higher bandwidth than we do today. The question is, what will we do with that bandwidth?

“We’ll be able to serve members in a more intimate way because we’ll be able to see them when we talk to them,” he continues. “That will help staff communicate with members because they’ll be able to tell by their expressions whether members are confused, excited, or worried by their expressions. This doesn’t mean we won’t use telephones anymore. But we’ll want to see the people we interface with because it humanizes the relationship.”

The wireless Web. The number of people using the Internet will explode due in large part to the growing number of Web-access devices and the wireless Web. “The Web will go everywhere people go. It will be on their cell phones, personal digital assistants, and in their kitchens and cars,” Burrus says. “Soon, you won’t even have to own a computer. America Online, for example, is launching AOL TV. So if you have a TV, you can be online. Everyone is hooked up, whether they’re rich or poor. This will help credit unions serve members at all levels.”

Ultraintelligent electronic agents. These powerful and sophisticated agents-such as the virtual John Wayne mentioned earlier-use neural network technology to learn about the user each time that person uses the Internet.

“So when you ask the agent to do a search, it will bring you what you asked for plus something you didn’t ask for but might want,” Burrus relates. “It can make recommendations.”

For example, the agent might suggest a book because the user previously bought one by the same author or on a similar topic. The more you use it, the more it learns.

Plus, various companies and organizations will provide plug-in intelligence. For example, a doctor could provide a health adviser plug-in so the ultraintelligent agent can give advice about diet, food, medication, and allergic reactions, Burrus says. Or a health club might provide an aerobics plug-in to help users exercise while traveling.

“Credit unions will offer financial planning and other plug-ins,” he adds.

This agent will be with members wherever they have Web access, which will be everywhere due to the wireless Web. “These new agents won’t even use your computer’s processing power. They’ll reside on the Web using the most powerful computers that exist,” Burrus says. “Your agent will go everywhere you go because the wireless Web goes everywhere you go. It will be your sole agent because of another giant technology that will affect financial services: biometrics. By using two forms of biometric identity, only you will be able to access your agent. You’re comfortable with it residing on the Web because only you can access it.”

Biometrics. This is the use of a physical trait to identify a person, such as a fingerprint, facial or retinal scan, voice recognition, or signature. “Biometrics will greatly reduce identity theft and fraud by letting financial institutions know who’s who electronically,” Burrus says.

He predicts the industry will establish international biometrics standards within several years, and that consumers will use a combination of two biometric features to ensure redundancy. Voice biometrics will be popular because computers have had builtin microphones and speaker systems for the past decade. Ditto for fingerprints, because scanners already are inexpensive.

“Financial institutions will give them away because it’s cheaper to provide the technology than to continue to suffer fraud losses,” Burrus says.


Fueling these technologies are advances in computer processing power, which doubles every 18 months, Burros says. That didn’t mean much at first because such compounding didn’t have a big effect until computers became sufficiently powerful.

“It took 20 years for computer processors to get from five megahertz to 500 megahertz. But it took only eight months to go from 600 megahertz to one gigahertz,” he explains. “As computer power increases, we’re ending up with unbelievable amounts of power. One of the outgrowths of that is the ability to create ultraintelligent electronic agents.”

Burrus predicts fewer people will use Web portals as ultraintelligent agents become popular. That’s because today’s Web search engines are slow and inaccurate compared with what ultraintelligent agents will be able to do. “Time is more valuable than money, so the agent will be a wonderful relief,” he says.

How can credit unions prepare for this new world? Burrus offers three suggestions:

1. Continue to differentiate the credit union from other providers. “Use technology to enhance relationships and a sense of community with members.”

2. Don’t try to keep up with banks. Instead, look at how to use technology to gain a competitive advantage.

3. Instead of making humans more technical, make technology more human. Make technology intuitive and easy to use.

“Leaders don’t need to be technologists, but they do need to be aware of technology,” Burrus says. “For example, I know people who can pick up a phone and make $1 million. And I know people who can pick up a phone and lose $1 million. The difference isn’t the phone. It’s how you’re using the phone.

“Just having a Web site doesn’t guarantee success. You need to be innovative and creative. Leverage the old thingrelationships and trust-in new ways using technology.”

BILL MERRICK is Credit Union Magazine’s managing editor/special projects. He can be reached at 608-2314076 or at bmerrick

Copyright Credit Union National Association, Inc. Jul 2000

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