I recently attended the Money 20/20 Conference in Las Vegas. There were more than 150 credit unions with team members wandering the vast convention center and expo hall. And those numbers didn’t include the even larger number of people like me from credit union support organizations.
This year’s event was dubbed “The Money Revolution,” and the general sessions, breakouts and expo hall vendors shared information on all aspects of traditional and leading-edge payments and banking topics. I had three learning experiences that stood out from the numerous ideas and insights gleaned from the conference. All three reinforce the theme that, despite the money revolution taking place, no amount of technology and speed will trump good product features and service.
Even the largest of credit unions will likely always lack the technology sophistication of big banks and new fintech disruptors. But in a financial services environment pushing service delivery to digital channels, more technology that simply automates and speeds up processes won’t necessarily translate into a winning value proposition.
Credit unions, large and small, will beat their competition with a service-first approach through all channels versus a simply mobile-first approach.
My first epiphany came while sharing a cab with a technologist from Wells Fargo Bank from my hotel to the convention center. In our short cab ride, Ahmad told me that he works on a team that is building smart artificial intelligence tools that automate cross-selling. Ironically, this strategy has cast Wells and other big banks in an unfavorable light. We see this as we read about the recent settlement agreement where Wells agreed to pay $65 million to settle claims that it misled investors about its cross-selling strategy. And this was just the latest in a string of such consumer complaints.
I’m not sure how many technologists Wells Fargo employs, but it has been reported that Chase has over 40,000, more than all the employees employed by Facebook. As I thought about the credit union people like those at the conference scrambling to get technology ideas, I realized how critical it is to foster credit union collaboration if we are to keep up with big banks and the so-called “disruptors.”
All of the “incumbent” financial institutions, large and small, as well as new fintech and bigtech disruptors, seem focused on two things that relate to the consumer experience. They’re trying to make payments, loan decisioning, money transfers, account setups and product cross-selling faster and more enjoyable for consumers and small business customers. But the irony here is that big banks like Wells Fargo continue to tarnish their brand and image by applying technology in ways that create reputation risk.
Automated cross-selling and new account generation have led to numerous large fines, lawsuits and negative PR for these banks. So, technology that drives speed in processes can actually be a bad thing if consumer experience and a principled value proposition aren’t at the forefront.
My second insight about this intersection of speed and service quality was reinforced as I listened to Regis Hadiaris, Executive Director of Rocket Mortgage for Quicken Loans — the Detroit-based mortgage lender that claims to be the biggest mortgage lender in the U.S. During a panel discussion, he made a very insightful point when he said that the Rocket Mortgage app, Quicken’s mobile processing platform, can speed up the loan approval process to be done in just a matter of minutes.
But here was the key point: Hadiaris said, “You can’t just make a process faster to satisfy the customer. You need to improve every aspect of the consumer experience too.” And of course, despite the speed and convenience of Rocket Mortgage, several new investigative reports have made the point that the borrower doesn’t always get the best deal in this speedy process. Buyer’s remorse can be a big problem once that fast authorization and closing lead to the realization that the consumer might have just paid a big “convenience fee.” Speed doesn’t always trump the thoughtful, consultative lending approach of a credit union.
So, as small providers like credit unions look to digitize and mobilize everything from money transfers to loan approvals, listening to Hadiaris talk about Rocket Mortgage and the Wells technologist describe their latest AI-driven cross-selling tools reinforced the idea that amazing and delighting consumers is about more than just speed … it has to be about process reinvention, and in the case of mobile banking apps, it needs to be about features and functionality. Speed is just one important objective within that vision.
Similar to how Quicken Loans created a mobile division of its operation under the Rocket Mortgage brand, there is a similar strategy in banking being applied by Customers Bank with its BankMobile division.
As I listened to a panel of smaller bank leaders talk about competing in the digital age, one panelist talked about her 50-employee shop and the importance of good in-branch customer service. She staunchly defended the need for customer service and how technology sometimes isn’t the panacea for meeting customer needs. Conversely, Jay Sidhu, CEO of BankMobile, a division of Customers Bank, spoke confidently about his company’s product. BankMobile claims to be the “first completely digital bank.” BankMobile is really a rebranded mobile platform that touts low-fee checking, CDs, credit cards and personal loans in an online environment. Jay’s premise is that banks are all going out of business unless they adopt a mobile-first strategy. Of course, when you read the fine print, BankMobile is a just a division of Customers Bank, an $11 billion-dollar bank chartered in Pennsylvania.
But BankMobile and Rocket Mortgage are using branded technology to offer a sleek, speedy user interface that appeals to millennials and others who want to bypass the traditional banking system. It appeals to young people and transient consumers who just want a low-fee digital experience that includes basic checking, debit and credit cards, and easy bill pay services — without ever having to step into a branch. The reality is that most progressive credit unions and banks also offer this mobile experience, although as more of an adjunct service as opposed to a separate, stand-alone consumer-branded product. Again, it isn’t just about speed. The user interface and user experience of a mobile platform are even more important.
When applying these ideas to credit unions’ mobile banking products, mobile banking platforms often seem overly focused on simplicity and speed for the most basic purposes of checking balances, paying bills, transferring money account-to-account and remote deposit capture. But while these features speed up transactions, most larger banks and credit unions are trying to balance simplicity with expanded feature enhancements. In other words, many are trying to expand the way needs are met as opposed to a pure focus on transaction speed.
For instance, most credit unions have not yet integrated all their various consumer apps into one platform. Things like card controls and P2P money transfers, mortgage and consumer loan processing, personal financial managers, auto research apps, branch and ATM locators, shopping tools, insurance offerings, and credit monitoring are often available through stand-alone apps and on the credit union website — but not integrated into the mobile app experience. And it’s worth noting that BankMobile hasn’t done this yet either.
In fact, there is some wisdom in not cluttering the mobile app with all of these features and paying the never-ending cost of technology integration with the credit union’s mobile banking provider. But fewer and fewer consumers even visit a bank or credit union website if they are doing their basic recurring transactions on their mobile phones.
This idea of balancing simplicity and speed with an expanded array of features constitutes the basis for CU Solutions Group’s groundbreaking product called LifeSteps Wallet. This customizable product allows credit unions to create a one-app strategy that wraps around the mobile banking app itself. The most essential mobile banking functions are prominent at the top of the app without compromising speed and simplicity. Then, numerous customizable features are built in to help members with shopping, auto, home ownership and financial wellness, including a personal finance management solution, identity protection and credit score monitoring.
As technology empowers consumers to take control of their credit scores, control their debit card fraud access while traveling, make speedy peer-to-peer money transfers and apply for and process loans, credit union members will demand and value these consumer experience enhancements as much or more than the speed and simplicity in basic traditional mobile banking functionality. But this balancing act requires a technology approach that emphasizes speed and simplicity while also providing easy, attractive access to other feature enhancements.
I’m betting that credit unions and banks that effectively strike this balance between technology-enabled speed and simple, compelling feature enhancements will grow their mobile banking business. The principle-based, service-first mantra of credit unions can put them at a competitive advantage over the deep-pocket, for-profit providers.