For decades, credit unions battled for consumers’ attention against one main opponent: banks. What happens when another competitor emerges—one with virtually infinite resources and manpower?
We’re about to find out.
Within the past year, analysts have seen Amazon take an increased interest in the banking world. In addition to lending out over $1 billion to third-party sellers on their site, they have also invested $15 billion into tech that helps small businesses manage their finances. Even Apple now offers a credit card made possible through their partnership with Goldman Sachs.
A survey of almost 2,000 Americans revealed that 40% of respondents are likely to leave their primary financial institution for a digital service that functions similar to a shopping experience. This emerging competition for audiences’ attention is only going to get bigger, stronger, and more prevalent in the years to come. But, this trend doesn’t mean the end of banking altogether. Success will hinge on an organization’s ability to adapt to this changing landscape.
The Local Advantage
Big tech’s interest in financial tools doesn’t mean the end is nigh. It means there’s a gap between what established institutions offer and what people are looking for—and you have an opportunity to close it.
Right now, consumer attitudes are at a peculiar crossroads. The convenience offered by big tech is desirable, but many still feel a strong pull toward keeping things local. The same study mentioned earlier revealed that 56% of respondents preferred community-based financial institutions, but the organizations’ digital capabilities did not meet their needs. Separate studies also found that 86% of consumers don’t trust big tech and 30% of consumers feel guilty for shopping on Amazon.
This conflict between what’s ideal and what’s convenient means that institutions like credit unions have a niche advantage over big tech. Consumers’ trust sides with David, not Goliath. Branding that emphasizes your history and community outreach can be a great way to remind people that their choices can be more than a question of convenience. It can also be a reflection of their values.
Countless studies have shown that people prefer doing business with organizations aligned with their beliefs, particularly among younger generations. The right messaging and brand positioning can tap into this growing need for consumers to feel more connected to where they invest their money.
Be The Hub
In a world where the swipe of a phone can buy groceries or a palm print can unlock tickets to a concert, convenience is king. More specifically, digital convenience is the most important of all.
This has been the case for years. What’s shifting, however, is what digital convenience means to the average person. How your online banking tools connect to your entire brand is the new gold standard.
Amazon tends to think of itself as an ecosystem. Everything is interdependent; everything has a purpose. If your credit union put itself in the same context, what would it look like? Is your digital banking a holistic asset, or is it something that needs an update? Your mobile and online platforms should be an interconnected reflection of your brand.
It isn’t enough to have an app—it needs to be a hub where members can take charge of their finances. All of this can sound like a tall order, but there are plenty of plug-and-play digital banking tools that make it easy to prioritize what convenience means to consumers today.
Lend A Hand
We all know loan applications have grown recently, but the real story lies in exactly how and where consumers are applying for these extra funds.
While in-branch and online applications have increased at roughly the same rate, mobile apps have seen double the activity. If you have the right digital services in place, chances are you’ve seen a similar pattern.
Credit unions are still viewed as a go-to resource for those with diverse financial backgrounds. If your institution sees itself in this light, making room for mobile lending is how your team can fortify its reputation in the digital age. Lending that works around the needs of everyone, not just the few, is something that’s directly in line with what sets credit unions apart from competitors.
The next decade will see plenty of changes, most notably in consumers’ perception of banking as a service rather than a physical institution. For credit unions, exceptional care has always been the name of the game. By welcoming new definitions of what service means to your organization, there are more opportunities to grow, build trust, and strengthen your overall brand for years to come.