By Ray Birch
ATLANTA—Credit unions waiting to decide whether to offer members crypto-services don’t have long to make a choice, according to one person, who believes adoption of cryptocurrency in the U.S. is outpacing the pace at which mobile banking took hold.
NCR President of Digital Banking Douglas Brown made that comparison, adding, as have several other credit unions that have entered the crypto space, that a good portion of a cooperative’s membership is already dabbling in cryptocurrency.
“What was once a niche market is now receiving mainstream attention, and institutions must determine when and how digital currencies will fit into their service offerings moving forward,” said Brown.
Brown believes credit unions should be taking the lead when it comes to setting the vision for how digital currencies can work across all touchpoints.
“Use cases such as buy-sell-hold, cross-border remittances, and payments will continue to become more common,” said Brown. “Those that solidify their strategies and expand consumer access to frictionless cryptocurrency capabilities will be poised to better compete with new threats, prevent member attrition and grow wallet share and revenue.”
‘A Good Fit’
Brown said what makes crypto a good fit for credit unions is data that show consumers prefer to work with cryptocurrency with their existing financial institution, noted Brown.
“We've done some research and it shows that over 62% of people who are interested in crypto want to purchase it from the financial institution they use today and trust,” said Brown. “That means credit unions and community banks.”
Brown asserted that with cryptocurrency on the minds of many members, credit unions need to get out ahead of their quickly growing interest.
“But understand how you are going to take advantage of the disruptive opportunity associated with crypto,” Brown said. “Based on your strategy, how does crypto fit into your growth, payment and new member acquisition strategies?”
Assessing Risk Appetite
Moreover, credit unions must assess their risk appetite for crypto and how deeply they want to engage with digital currency.
“At what level do they want to engage with crypto?” Brown said. “Do they just want to offer the ability for members to buy, sell and hold cryptocurrency? That is the simple model. Or, do they have aspirations to be more dynamic, maybe hold crypto on their own balance sheet? There's an entire spectrum of options that have different risk profiles with each of them.”
But with interest in cryptocurrency possibly growing faster than consumers have adopted mobile banking and even the Internet, Brown asserted that pace demands that credit union leaders and their boards of directors have serious conversations. And do so today.
“Consumer interest in cryptocurrency is growing at a much faster rate than I think many people expected,” said Brown. “This is forcing board-level conversations.”
What Client CUs are Thinking
Brown said many of the credit unions NCR works with are thinking about offering a basic crypto service—buy, sell and hold.
“However, there are many disruptive things coming out of crypto,” said Brown. “For us, we're very much big believers in the payments side of the equation—what this means and brings not just to the banks and credit unions but to merchants and restaurants.”
NCR has acquired the cryptocurrency software provider LibertyX. The LibertyX digital currency solution runs on ATMs, kiosks and point-of-sale systems today, and will allow for people to walk up to an ATM or ITM and purchase crypto either with a debit card, credit card or cash.
Brown said crypto ATMs will help credit unions add new members, particularly the underserved.
“This allows for people who are maybe not yet members of the banking system to engage with the credit union for crypto purposes,” Brown said, noting NCR ATMs with the LibertyX software also allow people to use cryptocurrency for international remittances.
‘Whole New Connection Point’
Brown said the ATMs offering cryptocurrency can be branded with the credit union’s name, and the video screen can carry the CU’s name.
The crypto ATMs could be placed in high-traffic areas in which the credit union is well known, said Brown.
“It could also be placed prominently within a sports stadium or on the campus of a university with which the credit union has ties,” he said. “This is a new connection point for credit unions to bring in a whole new set of members.”