In the rapidly evolving digital landscape, credit unions must continually evaluate and upgrade their digital offerings to stay competitive. As an increasing number of consumers shift towards online banking, the traditional brick-and-mortar banking model is being superseded by a digital-first approach.
Rising demand for digital banking and meeting consumer expectations
Modern consumers demand convenience, speed, and security from their credit union. They expect to be able to access their accounts, transfer funds, and apply for loans or credit cards instantly and effortlessly. The rise of fintech companies offering innovative digital solutions, adds to the pressure on credit unions to keep up with changing member expectations.
Digital-only banks are experiencing unprecedented growth. According to Insider Intelligence, digital-only bank account holders are forecasted to grow to 53.7 million in 2025, up from 29.8 million in 2021. These figures highlight the necessity for traditional community financial institutions to take proactive steps toward improving their digital capabilities to stay relevant in the market.
How different age groups embrace digital solutions
Generational adoption of digital banking solutions is on the rise across all age groups. As reported by Bankrate, as of 2021, mobile banking was the primary choice of account access for 43.5 percent of U.S. consumers, making it the most prevalent banking method.
About one-quarter of consumers say they would prefer to open a bank account online but are unable to do so at their current financial institution.
Over half (57 percent) of millennials and 64 percent of Gen Z have an account with a nontraditional institution, such as a fintech. Consumers between 35-44 years old are most likely to use a digital-only bank, with 29 percent of those in this age range having a digital-only primary account.
This wide-ranging adoption across generations highlights the universal appeal and necessity of digital transformation.
Expand digital services beyond the basics to improve user experience
However, simply having a digital presence is not enough. Credit unions must strive to deliver a seamless and intuitive member experience. The digital offerings should be user-friendly, easy to navigate, and compatible across different devices. Any form of friction or difficulty in the user experience can lead to member dissatisfaction.
Consumers are increasingly expecting a wide range of services from your credit union’s digital solutions:
- Online banking: Users are requiring comprehensive online banking services, enabling them to view account balances, transfer funds, and pay bills from the comfort of their homes or on the go.
- Mobile banking app: A functional, user-friendly mobile app is essential. Features such as mobile check deposits, real-time transaction alerts, and mobile wallet compatibility are highly sought after.
- Secure transactions: Assurance of secure online transactions is paramount. This includes robust authentication methods and encryption technology to protect sensitive data.
- Financial planning tools: Consumers are looking for tools to help manage their finances better. This includes budgeting tools, financial goal tracking, and investment advisory services.
- Easy loan applications: Digital solutions that allow members to quickly apply for and receive approval for loans are in high demand.
- Digital payments: The ability to make fast, secure digital payments, including peer-to-peer payments, contactless payments, and international transfers, is a must.
- Member support: Access to digital member support, such as chatbots and AI-powered assistance, round-the-clock member service, or video chat support, is highly valued.
- Personalized offers: Leverage data analytics to gain insights into member behavior and preferences. These insights can be used to offer personalized products and services that cater to the unique needs of each member. This level of personalization can help credit unions differentiate themselves in a crowded market.
Remember, meeting these consumer needs will result in a higher level of member satisfaction and loyalty.
Factors to consider behind the scenes
When evaluating digital solutions, credit unions should consider the following factors:
- Usability: The system should be intuitive and easy to use across different devices, from desktops to smartphones.
- Security: With cyber threats on the rise, the platform’s security infrastructure should be robust and regularly updated to protect sensitive member data. This not only protects members’ financial data but also builds trust and confidence in the digital offerings of the credit union.
- Integration: The digital solution should easily integrate with existing banking systems and software.
- Scalability: The platform should be scalable to accommodate growth and change in member needs and the number of transactions.
- Cost-effectiveness: The financial impact of implementing the digital solution, including both initial investment and ongoing maintenance costs, should be assessed.
The importance of upgrading digital capabilities to stay competitive
As digital transformation continues to sweep across the industry, credit unions that proactively evaluate and upgrade their digital offerings will be best positioned to retain their competitive edge. Credit unions that fail to adapt risk being left behind in an increasingly digital and member-centric marketplace.
To learn more about creating a successful digital transformation plan or how to initiate an evaluation, contact the experts at JMFA to get started.