4 minutes
Elevate your credit union's digital game to improve member retention and drive growth
In an era where digital convenience is at the top of almost everyone’s list of must-haves, the banking industry is at a crossroads. For credit unions, the imperative to rethink and revitalize the digital experience is more critical than ever. As consumer expectations evolve, the strategies you employ to meet them must evolve, as well. Failing to adapt can result in significant losses – in revenue, time, workforce talent, and resources. The right digital experience, however, can lead to higher accountholder retention, operational efficiencies, and overall growth.
The Stakes Are High
Consider this: In the United States alone, the number of digital banking users is projected to grow year-over-year to nearly 217 million by 2025 – and people are looking for more than just convenience from digital banking services. In fact, 59% of consumers say they want financial literacy tools and resources, as well. All of this underscores the urgency for credit unions to enhance digital offerings.
Research shows that digital banking isn’t just for younger generations: 91% of Gen Xers and 79% of baby boomers also see the benefits of these services. So the implications are clear: consumers across all age groups are embracing digital banking.
If you fail to meet these expectations, you risk losing members to more digitally adept competitors.
Benefits of a Superior Digital Experience
Digital transformation is not just about staying current; it’s about driving efficiencies and enhancing member satisfaction. Credit unions that focus on digital transformation report several key benefits:
- Decrease in Operational Expenses: Automation and digital solutions streamline processes, reducing the need for manual intervention and lowering costs.
- Improvement in Member Retention: A seamless digital experience fosters member loyalty. When members can easily access and manage their accounts online, they are more likely to stay with your credit union.
- Increased Productivity in Account Opening: Digital tools facilitate faster and more efficient opening of deposit and loan accounts, enhancing the overall user experience.
Digital Transformation: A Revenue Booster
Extended higher interest rates have led to tighter net interest margins across the financial services industry, making it harder for financial institutions to grow revenue. That’s where digital banking comes in. The primary goal of digital transformation – according to 77% of organizations surveyed in the 2023 State of Digital Banking trends report from Forrester – is to boost revenue. For credit unions, this can be achieved by offering intuitive, frictionless digital platforms that cater to members’ needs and preferences.
Key Considerations for Credit Unions
1. User Experience and Product Simplicity
Digital banks are winning business by prioritizing user experience and product simplicity. Traditional financial institutions must remove friction from the digital experience and deliver an intuitive platform that is user-friendly across all generations of accountholders. This means simplifying the user interface and ensuring that digital services are accessible and easy to use.
2. Legacy Systems and Budget Constraints
Credit unions face significant challenges in allocating resources for innovation. However, adopting open APIs and leveraging publicly available documentation can help drive faster innovation and meaningful business outcomes. By modernizing legacy systems and integrating new technologies, you can offer new features and improvements without extensive budget overruns.
3. Member-Centric Solutions
At the heart of digital transformation should be a focus on the member experience. You must understand your members’ needs and preferences and design solutions that enhance their banking experience. This might include personalized financial advice, tailored product offerings, and responsive customer support.
The Path Forward
Rethinking the digital experience isn’t just an option; it’s a necessity. By focusing on enhancing digital interactions, you can retain existing members, attract new ones, and drive operational efficiencies.
To fully reap the benefits of a modern digital banking experience, you must take strategic steps toward digital transformation. Your digital transformation journey begins with adopting new technologies, but it won’t be complete until you reimagine the entire member experience.
Start by evaluating your current digital banking solution in several key areas, including platform structure, data and analytics, and adoption and monetization potential, among others. In Rethinking Your Digital Banking Solution: 7 Key Factors, you get an in-depth exploration of seven critical factors to evaluate when assessing your current digital banking solution.
With the right approach, you can thrive in the digital age. The time to act is now.
