E-Strategy: The New Game in Town

by. Ron Daly

With tighter regulations, increasing compliance burden and growing pressure to generate fee income, strengthening credit unions’ bottom lines is a serious game. Some credit unions find success by offering “sticky” products and services, such as choice checking accounts and rewards credit cards, to retain members.  Others work to differentiate their products and services to grow business. And there are those who apply keen cost-cutting strategies, such as shifting away from multiple branches and toward technology-driven initiatives like self-service kiosks, or enhancing online marketing while adding more digital delivery channels.

On their own, these approaches can add to income. But for a growing number of credit unions, the strategy that serves as a major economic driver is one that integrates marketing, operations and product development to help gain efficiencies and deepen member relationships: an e-strategy. This involves delivering all financial services remotely via websites, online banking, mobile, digital messaging, and other non-branch options, such as ATMs and shared branches. By maximizing digital communication channels available, credit unions are leveling the playing field to successfully compete with the largest banks.

Do You Have a Game-Changing Strategy?

Some credit unions worry that applying new technologies may harm personal interaction with members—after all, the branch strategy with lots of member face time has worked well for years. But I wouldn’t dwell on this concern. The fact is that consumers today—especially those between 18 and 44—prefer to handle their financial business on their own terms, when and where they want. Multiple studies show that younger adults prefer face-to-face interaction when making important decisions, such as buying a home or finding the right investment program, but not necessarily for more routine financial needs. They favor the ability to move seamlessly between convenience channels, such as smart phones, laptops, and tablets, to handle most of their financial business.

Others fear that it’s too costly and time-consuming to implement a comprehensive e-strategy program. Not necessarily true. In doing your research, you’ll likely find the payback is quicker than you think—and definitely less costly then maintaining a large network of brick-and-mortar branches.

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