For credit unions, new member acquisition can be a costly proposition. The price to acquire a new member is around $400, each of whom generates around $100-200 annually. Many of those members will churn before the credit union has a chance to generate revenue from their accounts. For corporate accounts in the financial services industry — and credit unions taking on more business clients — the onboarding time is on the order of 100 days. When a full quarter of firms cite a turnover rate of more than 50%, it is incumbent upon them to streamline the new account opening process and make it easy for new members to come and stay aboard.
New account opening is still too old-school
When robo-advisors first appeared on the financial services scene they demonstrated just how much time and how many resources the industry wasted on manual, paper-heavy processes. The industry quickly found out how efficient these AI assistants were and embraced them, as many other industries have. Think of the process of digitizing manual workflows as the “Amazonification” of services, which digitizes, removes friction, and improves the experience for everyone involved.
Before Amazon, we had to drive to the bookstore, look up the book (while hoping the store had it), then stand in line to purchase the volume. Now, we can do the same thing in a matter of seconds by searching for the digital version and downloading it. For credit unions and many financial services firms, the new account opening process is still sort of like driving to the bookstore.
New account opening is the first impression a credit union makes on a new member, and it too often turns the relationship sour in a hurry. Lengthy and paper-driven onboarding feels outdated and can be frustrating for new members; the friction caused by human error and cumbersome manual tasks is a big reason why.
Credit unions must focus on their new account opening precisely because first impressions are so important. And, the longer the traditional financial services industry stays behind competitors like FinTech companies — the most “significant threat” in the years to come — the more catching up they’ll have to do in the future. It’s time for credit unions to make everything as seamless as other apps members use in other facets of their lives.
Outdated methods weigh down the credit union member experience
Opening a new account can take so long because it requires many processes wrapped up into one. To onboard a new member, firms must initiate the new account, pull information from the CRM or core banking system, enter account and member details, validate those details, generate a document package for signing, and then store that information. The bookstore version of new account opening is clunky and paper-based, manual, and tedious. With so many points of failure, new account opening can also be an opaque compliance nightmare, as documents fall through the cracks or don’t meet retention guidelines.
The Amazonification of new account opening is, by comparison, a breeze. Process automation platforms automatically populate electronic forms with member data, manage the DocuSign process, store all the documentation in the digital repository and sync up with the core banking platform. Digital platforms may also include tools like performance dashboards that highlight process bottlenecks and/or automate priorities and reminders in the event escalation is needed.
To move from bookstore to Amazon, credit unions can leverage technology solutions that center on document processing. Nearly every process at a financial services firm involves documentation, so building a digitization strategy around those documents is a viable path forward.
Amazonification of document processes yields numerous benefits
A centralized, digital document management system that integrates with other platforms unlocks various benefits for credit unions. Foremost among the advantages it offers is transparency. When team members know exactly where a new member is in the account-opening process, they can quickly provide updated feedback about account status. Transparency also allows teams to make instant corrections should something go awry.
- A centralized source of data can replace complicated networks of point solutions and reduce information silos to further facilitate visibility.
- Digitizing processes via a centralized document management system eliminates manual data migration and document-lifecycle workflows, saving operational costs and freeing up employees’ time to improve the member experience.
- In a heavily regulated industry, implementing technology that provides granular control over and visibility into every workflow helps firms track records accurately and promptly. These types of capabilities expedite compliance reviews and audit reports.
Together, these benefits allow credit unions to onboard members faster, remove friction from the entire customer experience, and increase revenues sooner.
Embracing a new paradigm is the key to credit union growth
A financial services firm with more than 900 advisory associates across various locations used to take a bookstore approach to new account onboarding. But capturing data during account opening and creating workflows manually bogged the organization down.
The firm eventually entered the Amazon paradigm thanks to a centralized platform. The technology created a consistent way to capture data during digital account opening and onboarding, eliminating manual tasks and data entry. Through digitization and integration with the existing CRM, the firm was able to open 400 new accounts and realize $200 billion in new assets.
While the details of credit unions’ stories won’t be the same, the effect likely will be. It’s time to leave the physical bookstore behind and turn new account opening into the digital library it was always destined to become.