How credit unions can build a strong mobile culture while providing the best experience for members
If credit unions are not already building mobile strategies, there’s no question that they’re putting themselves at risk of losing members. According to Business Insider Intelligence’s Mobile Banking Competitive Edge Study, 89% of all survey respondents and 97% of millennials said they use mobile banking. Additionally, 91% of Gen Xers and 79% of baby boomers reported seeing the benefits of these services. Those numbers are hard to ignore.
While some financial institutions had formulated a mobile strategy before COVID-19, many found that the pandemic forced them to accelerate their plans. In the face of this pressure, how can credit unions create a mobile-first culture without sacrificing the member service that is at the core of their mission?
Mobile adoption requires a three-pronged approach: address members’ needs, assess the technology and most important features, and align the strategic goals of the credit union with the credit union people who will do the work.
Digital and Mobile Maturity
Maha Brauch, director of digital services, $3.7 billion Affinity Plus Federal Credit Union, St. Paul, Minnesota, says the first thing a credit union needs to do when setting a strategy is assess its digital and mobile maturity.
“We made an investment four years ago,” she says. “Our EVP/CFO, Brian Volkmann (a CUES member), recognized that digital is the future and we needed to actively pivot.”
Brauch says that Affinity Plus FCU converted seven major systems, including its core, digital banking, consumer lending and real estate systems to set the credit union up with a foundation to grow and accelerate in the digital space.
“Our old solutions were archaic legacy systems that we were stretching to their maximum capacity,” she says. “They just couldn’t do what we want them to do. It just ended up with our team and our staff doing a lot of gymnastics on the back end to make things happen on the front end. It was inefficient, did not deliver the ideal member experience and didn’t allow us to compete with bigger institutions.”
Brauch says Affinity Plus FCU began the upgrade process by doing an evaluation of their systems and asking themselves what their needs and wants were and if the systems currently in place were meeting them.
“It was a three-year project,” she says. “It took a long time, but it set us up for success, especially in 2020 when the pandemic started.”
Put the Right Team in Place
Any successful digital transformation initiative, whether focusing on mobile or an organization-wide shift to new platforms and delivery channels, requires the right people with the right knowledge and skills.
Laura Wallace, SVP/chief retail officer for $8.2 billion Desert Financial Credit Union, Phoenix, says that during her credit union’s digital transformation efforts, she and her team have had to consider how to help staff become more consultative in their interactions with members. To do this, they worked with redefined staff roles and provided education. The aim was to ensure that staff members would become problem-solvers rather than just being transactional.
“We’ve spent a lot of time elevating our roles,” she says. “Redefining and renaming our roles last year was really all about setting the stage for having the foundation people-wise to be able to support any digital transformation, which obviously takes longer to bring to life.”
Wallace says that Desert Financial CU started with the people—or member-facing—side, elevating the teller role to experience specialists and member advocates to relationship specialists.
The credit union has also launched a new market manager role. “We’ll have 10 market managers that, ultimately, are responsible for creating consistency across our branch network and supporting all of the digital transformation and education, just so as we’re moving through this transformation, we will have the consistent member experience. We don’t want it to be disjointed.”
Wallace adds that Desert Financial CU is aligning the new roles with training that is being rolled out this year in partnership with MindWire, a workforce analytics firm, to give the staff the needed consultative skills.
“I don’t like to call them sales skills,” she emphasizes. “I like to call them educational skills, so that they (staff) can be comfortable asking questions and [delving into] the conversation where they may be able to educate a member or help them save or make more money.”
Hire for Needed Skills
Likewise, people are an important part of Affinity Plus FCU’s digital and mobile strategy. Brauch has been with the credit union for 11 years and was previously a project manager before leading the digital services team. She notes that since beginning Affinity Plus FCU’s digital transformation, the credit union realized that it needed to invest not only in the knowledge of current staff, but also hire expertise it didn’t already have, such as how to create an exceptional user experience and do good testing.
Brauch’s digital team now includes employees with all the requisite skills, including digital product management. “We needed to invest in the people that understand how to continue to grow and optimize these digital channels,” she says. “Our digital team consists of UX designers, copywriters, researchers and product managers who champion the end-to-end digital member experience journey. They helped to lead the full life-cycle digital product development and strategic definition—from requirements gathering to design deployment and enhancements.”
Affinity Plus FCU simultaneously invested in creating an IT development operations team, which is a combination of software developers and operations, and a quality assurance team that manages testing. “The digital and DevOps/QA teams work together in an agile, collaborative manner to continuously deliver on digital product road map goals,” Brauch says.
Brauch says that they began with only a couple of developers, but over the span of two years expanded the team when they realized they had more work than two developers could handle. She currently has 10 digital team members and admits that hiring for some of these roles can get expensive. She does, however, encourage credit unions to invest in training and certifications for staff, such as those offered in UX, product management and agile.
Brauch notes that the combination of existing internal staff and the new hires has helped Affinity Plus FCU create a highly functional digital team.
“What really made them work so well as a team is that they understood our members, they understood our organization, and they understood our mission and what we’re trying to accomplish,” she says.
Meet Members Where They Are
A major concern for credit unions when creating a mobile-first strategy is how to approach physical branches in a mobile world.
“Being a community-based credit union, we’re really looking to balance digital with the in-person environment,” says Wallace. “That’s why we labeled our transformation ‘phygital.’”
A part of balancing both experiences is piloting technology. For example, the credit union tried tablets in branches and asked for members’ feedback on their comfort level using them, Wallace says. “We chose three of our busier branches to pilot tablets so that in the branches, we can go to where the member is versus dragging them to our desk,” she explains. “We learned a lot from that pilot.”
For example, Wallace says, the pilot helped them realize that, though they had ambitious goals for using the tablets, it wasn’t necessary for the tablet to perform the full laundry list of functions initially envisioned. “It probably needs to do a handful of things so that we can meet members where they’re at while being fully integrated with all of our other technology.”
Wallace says the current vision is to use the tablets for member education, certain transactions or, for example, to begin the process of opening an account. The pilot phase was important to gauge member interest. “We don’t want to … force our members into technology when they may not be ready for it,” she explains. “We want to make sure we’re heading in the right direction for what our members want.”
Not Giving Up Branches Yet
Wallace, who was formerly VP/customer care at the all-digital $14 billion Alliant Credit Union, Chicago, says that though Desert Financial CU has a totally different model, she enjoys being in a community-based credit union where members have the option to speak with someone in person if that’s their preference. But she stresses that consistency is key, whether interactions are through mobile or in the branch, in giving members omnichannel options.
Brauch notes that it’s crucial to recognize right from the start that a digital- or mobile-first strategy does not necessarily mean a digital-only or mobile-only strategy.
“This is very important, especially in a credit union, because our branch network works so hard at furthering our mission and our cause,” she says. “[Branches] do so much to build meaningful relationships and connections with our members. We’re not focused on eliminating our branch or in-person experience, but rather we want to enhance it. We want to enhance our member experience by giving them the ability to choose how they want to bank with us—be that in person or digital.”
Focus on User Needs
In creating a mobile-first strategy, understanding the types of support and resources members want or expect is key. This could range from the design of a specialty app to, on the more extreme end, shifting toward an online-only neobank model that aligns with the credit union’s mission. (Read more about neobanks.)
Michael Smit, EVP/brand and digital delivery at $5 billion Libro Credit Union, London, Ontario, says the CU’s stand-alone app, Yooli, was created out of its strong desire to untangle the financial lives of members’—referred to as owners. Yooli, which stands for “you and Libro working together,” is a money management app that includes an interactive financial health score tool, FinStrong, as well as financial alerts and guidance.
“We first looked at our target market and asked ourselves what problems our owners are facing regarding their money behavior,” Smit says. “We use an innovation method called human-centered design to do this. We did quite a bit of research to understand everything from social taboos concerning discussing finances, to the pressures from society, to the complexities of partners combining their finances. And we know that consumers have good intentions but at times lack the sense of their money and how to put it to good use. We call this situation they’re in being ‘tangled.’ We wanted to build a solution that works to untangle them.”
Smit says that instead of trying to build the app to be perfect at launch, Libro CU has been rolling it out in stages and tweaking it along the way. It started with an app launch to a small test group within the app project team. Then it launched the app for all staff, asking for feedback that would help them iterate and improve it. The app is currently being beta tested by 2,000 volunteer owner-members while the CU prepares for a larger, expanded launch to its full membership.
“People know it’s not at a stage where it’s fully functional,” Smit says. “It’s in a great spot, but a lot of it was about us getting feedback from users to learn what’s going well and what hasn’t gone well. A lot of what Libro focuses on is this idea of iteration and continuous improvement.”
Getting Good Feedback
Smit adds that he and his team have already received tremendous feedback about the app’s many features and benefits, such as account aggregation, budgeting, holistic transaction account views, visual and data-rich transactional information, transactions by category, other financial insights, financial health tracking and education.
“It does it all within one app,” Smit says. “What we’re hearing the most feedback around is people’s ability to aggregate all of their information in one place. … So it’s a much richer experience that allows them—instead of looking at separate pieces of their financial world—to bring it all together. We’re working to build and improve it now with some of that budgeting, insight and health tracking information. I think for a lot of users, what they lack access to is just seeing that holistic view of their financial life.”
Smit stresses that a successful member experience strategy cannot simply be digital- or mobile-first.
“That’s not enough,” he says. “It really needs to start with your value proposition and where you differentiate. We started a guiding strategy called ‘Digital-First Coach.’ ... What that means is that we need to put in front of our owners the products and services—the transactional capability, the access to credit, moving their investments, etc. We need to make that very simple and easy for them to do in online and mobile banking. What we’re working to do is build a wrapper around that of coaching everywhere. We think that’s something that not only aligns well with our purpose but can be agile enough to shift as technology trends shift. Technology will change, but if you continue to put your value proposition at the forefront, your guiding lens will continue to be what differentiates you.”
All Digital, All the Time
Dora Financial, the nation’s first credit union service organization-operated neobank, was also created with focus on the user—in this case, the 50 million Americans currently not participating in mainstream banking. Founded by $2 billion USALLIANCE Financial, Rye, New York, in August 2021, it is now sponsored by five entities: Affinity Plus FCU; $9.7 billion Digital Federal Credit Union, Marlborough, Massachusetts; $5 billion Service Federal Credit Union, Portsmouth, New Hampshire; Inclusiv, New York; and USALLIANCE Financial.
Volkmann of Affinity Plus FCU says his credit union and board had talked a lot about whether the organization, as a low-income designated credit union, was doing enough to help the unbanked and underbanked.
“We’re certainly doing various things internally at Affinity Plus, but when we were talking with USALLIANCE and hearing some of the things that they were working on with Dora, we said we would love to be a part of it.
“There are a lot of people who don’t trust financial services, and we think we can make a difference in some of these communities,” he continues. “When we look at diversity, belonging and inclusion, credit unions do turn people down for loans. We turn people down for membership.”
With its fully bilingual digital banking experience, Dora is dedicated to financial inclusion and supports low- to moderate-income individuals. “Dora’s mobile banking experience breaks down traditional barriers for people who need someplace to start or to turn around their finances with a simple, member-friendly account and educational resources and support services to really help them,” Volkmann says. In addition to removing the language barrier, Dora does not require a credit score to open an account, and there are no maintenance fees. Consumers who use Dora also have access to a debit card and 30,000 fee-free ATMs.
“Dora is an innovative approach,” Volkmann says. “It’s just an interesting, novel concept of how we can make a difference and compete with other neobanks. But having it led by a group of credit unions is where I think those significant differences will be.”
Volkmann notes that since the formation of Dora, there has been strong sponsorship interest from other organizations in the industry. “Inclusiv joined our board at the end of the year and became an investor in Dora,” he says. “It’s great to have an organization like Inclusiv help us moving forward.”
The Dora team is considering other creative partnerships as well. “When … individuals get released from prison, they’re in a difficult situation by not having banking services,” he says. “And so, is there a way for us to partner with the Department of Corrections, for example? There are certainly a lot of unbanked people out there, and we’re trying to figure out where we’re going to be able to make the biggest difference.” cues icon
Formerly a member of the CUES marketing staff, Felicia Hudson Hannafan is a writer based in Chicago.