Engaging With Members in the Wild

Location, Location

Remember when your home’s location matched your area code? Nowadays people no longer feel the need to change their phone number when they relocate, since practically everyone has a nationwide phone plan. In many ways, the same concept applies to your local CU. Mobile banking allows members who move away from a particular city or even state to continue doing business with a CU where they were originally.

The No. 1 reason people change their institution is that they move, according to Caroline Vahrenkamp, senior research analyst, Raddon, a Fiserv company, Brookfield, Wisconsin. “Ultimately, mobile banking isn’t going to overcome this challenge entirely,” she says. “People still value branch convenience and service—something we’ve seen consistently in our research. At the same time, interstate movement is drastically down from where it was years ago, so overall, this is less of a strategic priority than it once was.”

That retention of CU members has trended up doesn’t mean that it isn’t a struggle to retain members, even at a local level, Vahrenkamp says. “What we suggest is that mobile, online, branch—these are all table stakes now,” she says. “The real key to retention isn’t in any one of these channels; it’s in building the overall brand and member experience. So yes, mobile can help when people move, but it isn’t going to be a silver bullet.”

John J. Merritt, chief strategy officer of $717 million Enrichment Federal Credit Union, Oak Ridge, Tennessee, says about five years ago, his CU started to take on the issue by delivering an experience that would reduce friction, make transactions seamless and be available 24/7/365 anywhere in the world. 

“When we talk about that experience, it can’t be a scaled-down set of features just to have a mobile offering,” he says. “It must be robust—we want our members to be able to get the in-person branch experience remotely. Extensive integration within Enrichment’s mobile app and a high level of feature functionality within the mobile app and internet banking are critical. Geography should not affect our members’ ability to easily interact with us.”

To enable members to do so, Enrichment FCU has, through its mobile app, real-time availability for remote check deposit, travel notifications, alerts, card controls, online loan and account origination, and remote document signature and retrieval, to name a few. However, mobile banking isn’t just about having a plethora of services available in the palm of your hand—it’s about delivering personal services inside the mobile app. 

“Historically, first-generation mobile banking apps were limited to self-service only, so the prospect of moving away from the credit union’s local branch meant no longer having access to personal service in a financial moment of need,” says Chris Spicer, senior manager, Jack Henry Digital, Monett, Missouri. “Everything changed with the advent of full-service mobile banking in 2018 and its accelerated adoption in 2020 when branch service was temporarily suspended due to the pandemic. 

“In short, full-service mobile banking translates ‘people helping people’ into digital contexts, increasing and safeguarding member loyalty by expanding access to the credit union’s personal service irrespective of geography. Full-service mobile also secures generational loyalty, enabling young members to continue their relationships with the credit union as they leave for college or begin their first jobs far away from their home credit unions.” 

Touchless Appeal

While mobile banking had existed for years when the pandemic hit, the health-related shutdowns pushed members to either delve into digital banking for the first time or rely on it much more. 

“This is especially acute with older members—boomer-aged—who were reticent to use mobile before,” says Lynne Cornelison, a research analyst with Raddon. “The ‘avoidance of germs’ might linger, but it isn’t as potent as our overall aversion to changing our habits. There is a staying power to change; some members may not have wanted to change to use mobile. Now, we expect there will be many (members) that may not want to change back to branch-based transactions. All in all, this is a positive in our view, because branches need to evolve to a more consultative model to be effective business drivers.”

In fact, Merritt says, even as the world has begun to open up again, mobile and internet banking is still growing dramatically at Enrichment FCU. 

“From mid-2019 to mid-2020, online transactions across all functions (i.e. loan payments, transfers, loan applications and account originations) grew by about 50%,” he says. “Prior to this, growth tended more toward the low teens. With things beginning to open back up, we expected growth to return to pre-pandemic rates or even retract slightly. However, from mid-2020 to mid-2021, we’re seeing growth of between 20 to 50%, depending on the type of online transaction.”  

As the world is adjusting to the new normal, banking from home remains an invaluable perk, not only because it’s safer, but because it’s often easier and faster. 

“That’s where I think you see a trend right now with mobile and digital banking providers putting more and more functionality out there, being able to take loans faster,” Scott says, “being able to, in essence, do anything you could historically do in a branch and make that process way faster.”

Generational Wealth

It’s no secret that mobile banking reaches younger people where they are, but it can actually be used to reach different generations and all ages. “The pandemic has catalyzed this; even the oldest members are really starting to branch into mobile,” Cornelison says. “Expectations and demand for access are only going to increase over the next decade. We’ve hit an inflection point now where boomers and other nontraditional mobile users are especially engaged; it’s a good time to emphasize those mobile tools and rethink other channels, like the branch, in concert with that.”

Members of Gen Z don’t know what life is like without a smartphone, and millennials are also digital-first. 

“If you look at millennial credit union members, having mobile banking available is more important to them than just about anything else—only online banking and accuracy are slightly more important,” Vahrenkamp says. “It isn’t that mobile can help create loyalty—it’s that increasingly, you can’t secure loyalty without it. That said, ... leaders should focus on improving their mobile experiences and making them easy and seamless. Look at how the app is structured; get a sense of which features are most used credit union-wide and by individuals; and make sure the reaction is, ‘Wow, this app is slick!’ versus ‘I can’t ever find this function I want.’ 

“This isn’t too dissimilar from patterns we see in other areas, like credit card rewards,” she continues. “It isn’t so much that a cards rewards program must be earth-shatteringly good. It just must be available and easily accessible. Where we start to lose momentum with member loyalty are points of frustration or friction—like a phone tree that is too complex or a branch that keeps inconvenient hours for the population it serves.”

A crucial factor for CUs to keep in mind with their mobile apps is offering connectivity to other apps people are using. 

“Mobile banking must also be open, allowing younger members to connect and share their financial data with other apps—merchant apps, payments apps, digital wallets, crypto exchanges, etc.,” Spicer says. “Being open allows mobile to evolve and adapt as younger members’ needs change over time.” Even if that means shelling out money to participate in Venmo or Zelle, for example, it’s a worthy investment that will lead to allegiance in the long term.

The challenge of mobile banking now is making sure it appeals to all ages. 

“Younger people want easy,” Merritt says. “They’re used to the ease of communicating via social media, purchasing through apps, … ordering dinner delivered to their house. You better be offering them an intuitive option through their smartphones! They don’t want to have to think through a multistep process to accomplish a task. Whoever can create a mobile banking experience that lets them transact with their money in much the same way will build a following and create a level of loyalty. I do think loyalty built from a mobile banking experience is fickle—you risk losing it to the next bigger, better option that comes along. While they have that loyalty, credit unions need to embrace it and show their members, not just younger people, the value-add that they provide.”

A crucial way to grow and build long-term member loyalty through mobile banking is to provide a trusted advisor role and deliver support that’s in members’ best interest. Whether it’s buying a home, building wealth, managing debt or making investments, mobile banking will play a major role. 

“Financial wellness is a huge piece,” Scott says. “It’s a big thing for a lot of different generations, but [for] that generation in particular, there’s all the statistics out in the marketplace that 60% of consumers say that they’re struggling financially, and if there was something in that digital mobile channel that helps them with their financial wellness, that makes it really sticky. Those financial wellness tools are valuable, regardless of what stage of your financial journey you’re at. You could have a lot of money and still not be feeling well off financially because you have too many bills. Having those financial wellness tools, if you’ve helped somebody through a troubling point in their life, you’ve helped them navigate a difficult financial circumstance, and that creates a lot of loyalty right there.” 

Scott points out that people who are struggling financially may be too embarrassed to have an in-person conversation with someone at their local credit union office, which is where mobile financial planning tools also have a major benefit. He says this is especially true for older people who may feel intimidated about their circumstances and can turn to mobile banking shame-free.

However, it’s important not to lose the personal touch that credit unions deliver on mobile banking. 

“Another learning from the pandemic is that people are now using mobile banking for everything,” says Heidi Liebenguth, managing partner at Crone Consulting. “Something like Zoom could be used by call centers to serve customers in the wild, 24/7, wherever they might be, in a more personalized fashion than just a phone call or a chat session. There’s so much opportunity for real personalization and real assistance to members through the mobile app.”

Reaching Out

Credit unions can create stickiness for mobile by starting with the basics. Make sure your app allows members to transfer money, deposit checks and access payments tools in the simplest way. 

“The first thing would be to ensure that you do the standard set of features well,” Merritt says. “Make sure it is simple, intuitive, frictionless. Enrichment has ‘snapshot.’ The ability to check a balance by simply refreshing your phone’s screen is very popular. Ensure members can deposit checks and receive real-time credit. Bill-pay and e-statement capability are other frequently used features that we offer. Members like being able to interact with their credit and debit cards within the same application and feel more in control.” Merritt also recommends having simple budgeting and goal-setting tools, as those are member experiences that will create loyalty.  

To make the best mobile banking app possible, Cornelison recommends looking outside of the finance world for inspiration. “Make the app as smooth and simple an experience as possible, modeling it off of music, shopping and other app types that people use daily,” she suggests. “Find ways to get feedback from customers or understand how they’re moving around the mobile environment to help with incremental updates and improvements.”

Once the basics are covered, you can offer advanced features to boost stickiness even more. 

Megan Cummins, strategic advisor for Raddon, has seen a number of innovative approaches. “A few are virtual assistants built into the app, where you can type or even voice-command to your accounts. One-touch balance check can be useful—and is used often when implemented. Location-based services that modify offers or information based on where you are (‘Hey, these members are on a trip. … Let’s help them out by reminding them of their budget or balance.’) are also interesting. This type of thing is the future of mobile at credit unions—more creative, sticky applications that build the brand.”

Other mobile offerings that can take it up a notch include early access to payroll deposits, automated savings options, fractional investing, crypto buy-hold-sell capabilities, and financial-health scoring and tracking across all of a given member’s financial service providers, Spicer says. 

“Curating meaningful and differentiated mobile member experiences over time will also be a function of integrations to third-party fintech solutions that are compelling and relevant,” Spicer says. “Thirty to 40% of members own multiple checking accounts across a variety of fintech and financial service providers. Analyzing members’ payments data reveals which third-party services your members are using—as well as what your members are using them for. 

“The strategic opportunity for credit unions is to provide what the most popular challenger banks and fintech apps (Venmo, Paypal, Square Cash App) lack: outbound API-aggregation of the member’s third-party accounts, financial-health scoring and tracking and live, local personal service in digital contexts,” Spicer adds. “The secret ... is ... expanding financial management and money movement options for your members.”

People spend money to download Candy Crush and Angry Birds. Scott recommends asking yourself if people would pay to download your app. 

“Now, I’m not saying any credit union should charge for it,” he says. “But have you provided enough value here that you think people would pay $3.95 to download your app because it’s that good? If you can’t answer that with a ‘yes,’ then you’ve got a lot of opportunity.”

No matter how many bells and whistles your app offers, at the end of the day, it’s overall customer experience that creates loyalty. “Mobile can’t be the only focus,” Vahrenkamp says. “The easier it is to use, the better, but it doesn’t replace the need for competent staff, advisers and really consistent experiences across all touchpoints.”  cues icon 

Celia Shatzman is a Brooklyn-based writer who has penned stories on topics ranging from beauty to fashion, finance, travel, celebrities, health and entertainment.