Article

Three Ways Credit Unions Can Satisfy Members in a Digital-First Society

young black man working on his laptop with thumbs up
By Craig McLaughlin

5 minutes

Do you know how to do this correctly?

Leadership teams at most credit unions are seeing less contentment and satisfaction among members encountering digital banking environments that are five years behind what they get from today’s retail, travel and tech providers. Sound familiar?

While most, if not all, of these leadership teams want to meet and exceed members’ digital expectations, many struggle even to get a clean line of sight on where to start implementing the elements needed to reach these goals.

What’s more, the pandemic accelerated the adoption of a digital-first mentality in how consumers live their daily lives. This reality has increased the strategic value of technology that can change a “good enough” digital experience into a competitive differentiator.

Clues in the Data

Results from the Finaltyics.ai’s 2022 Credit Union Digital Maturity Index not only confirmed the presence of this struggle, but also offers some clues on how to beat the odds. The DMI was designed to measure the current state of digital in the credit union industry across multiple critical areas. The survey found that 86% of credit unions agreed that their competitive strategy is reliant on digital. However, most are not sufficiently prepared to leverage it. Below are some of additional findings:

  • Only 14% of credit unions completely agree that they have the appropriate flexible, iterative and collaborative approach to execute a digital-first strategy.
  • Respondents scored their capability to use modern technology (like application programming interfaces, cloud and artificial intelligence) higher than other abilities, but only 14% completely agree that they have those technologies in place.
  • Only 12% of respondents were using both internal and external data to drive outcomes.
  • Only 36% of credit unions indicated they use member journeys to drive the business, while 17% of respondents completely agreed that their credit union prioritizes digital decisions based on member experience.

Digital-First as Differentiator

Credit unions understand the primacy of digital as a competitive differentiator. But they face challenges in identifying actionable information that can transform their members’ online interactions from a non-differentiated experience to one that wows.  

Three key areas that could help move credit unions toward delivering “wow” include leveraging digital, data and member interaction.

Digital. A Finalytics.ai survey conducted by The Harris Poll found that 40% of Americans are likely to leave their primary financial institution for digital banking that compares to an online shopping experience. To prevent an acceleration of that migration, credit unions need to unlock the potential of new, powerful technology built to provide these institutions with the ability to create digital-first experiences for their members that exceed the capabilities of the branch. Much of the technology being introduced by innovative vendors today is more accessible, less disruptive and does not require credit unions to invest in resource expertise. Credit unions must look to partner with these new providers to leverage technologies like AI, and in particular machine learning, to develop a sophisticated level of intelligence beyond what they previously gathered during face-to-face in-branch conversations. In return, they can drive experiences that go beyond the personalization that members previously received via in-branch interactions.

Data. Credit unions’ DMI numbers regarding their use of modern, flexible technologies and architectures were higher than all other attributes measured except leadership. Yet, the scores given to their use of internal and external data sources, insights and personas were among the lowest. Credit unions are directly competing for members with other organizations primarily use data analytics to acquire new clients. If credit unions wish to remain relevant in a digital-first marketplace, they need to unlock the value of data to attract prospects and continue delivering tailored experiences to their members—a strategy that has always differentiated them from other players. By using real-time data and analytics from consumer profiles and previous online behaviors, credit unions can provide unique, segment-of-one digital experiences to each member and cross-sell relevant services that financially empower their communities.

Member interaction. According to the DMI scores, credit unions’ focus on members was surprisingly low. Only 36% utilized member journeys; only 45% used personas and member journeys to drive their technological choices; and 48% approach technological choices with members in mind. If credit unions keep this up, the number of credit unions available to consumers will continue to decrease in 2022.  Even though credit union membership continues to grow, albeit modestly, sooner or later this reduction in the number of credit unions will have a wide-reaching negative impact on total membership numbers.

Being “member focused” must now stretch to how data sources and advanced technology are combined and applied. By directing attention to the users and leveraging internal and external data, credit unions will be able to offer digital experiences that go beyond personalization to create segment-of-one digital experiences.

These user-optimized interactions address the needs of their members in real time, whenever and however they interact with their credit union. The insights required to deliver this type of digital experience are already available. Used correctly, they will create a level of member satisfaction that allows credit unions to continue deepening relationships and loyalty far into the future.

Craig McLaughlin is co-founder/CEO of Finalytics.ai.

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