Keeping the digital train rolling with micro-transformations

Credit unions have always focused first and foremost on serving their members’ needs. But since the onset of COVID-19, member expectations have dramatically shifted, reflecting changes to the industry we are sure to see over the next few decades.

Today’s credit unions must serve their members where they are, instead of forcing them to use traditional face-to-face channels of engagement. Digital technology is the locomotive that will drive all future member relationships. It is the key to enhancing the member experience without forgoing the human touch – oftentimes a critical differentiator for credit unions.

The digital train is leaving the station, and the worldwide public health emergency has only accelerated its progress. Credit unions cannot expect to remain competitive or relevant in a digital-first world unless they fully commit to serving their members.

Many leading credit unions are well on their way and the pandemic seemingly hasn’t slowed them down. According to Larry Perino, Manager of Business Development at Navy Federal Credit Union, during the week of January 18, 2021, Navy Fed onboarded the highest number of new members in its history, with more than 500 joining the credit union in a single day. 

Another example lies within Canada’s largest community credit union, Vancity, who successfully transformed their digital offerings to enhance their commercial loan origination process, in the midst of the COVID-19 pandemic, simultaneously empowering their employees to work remotely while also enhancing service to their members.

Such results wouldn’t be possible without a concerted effort to reshape both the front end to allow for fully remote member interactions for onboarding, lending and deposit account opening, as well as the back office by eliminating manual, redundant and paper-intensive processes. 

Staying on Track Through the Pandemic

These are undoubtedly challenging times for credit unions. Cooperatives confront lower performance ratios even as the larger economy begins to recover from the pandemic-related downturn. According to CUNA, the industry’s return on average assets ratio ended 2020 at 0.65%, down from 0.93% in 2019. CUNA also predicts a further deterioration to just 0.50% for both 2021 and 2022.

With the lingering shadow of economic uncertainty and lower earnings hanging over the sector, many institutions are being more selective in their technology investments and may be looking for opportunities to cut costs while continuing to enhance their digital capabilities.

Yet, “necessity is the mother of invention,” and some credit unions are learning they don’t have to tackle a major digital overhaul all at once. By taking a staged, or “station-to-station” approach to digital transformation, credit unions can stay on track while still managing their budget and capturing some quick wins. In fact, according to a recent Forbes article backed by research from Cornerstone Advisors, around 25% of credit unions expect to add a new or replacement consumer digital account opening system in 2021.

By tackling quick technology upgrades through such “micro-transformations,” credit unions can remain competitive and member-focused in a financial services marketplace that is rapidly shifting to the virtual world. All of this is achievable while still ensuring you are meeting your institution’s regulatory and compliance needs, whether by implementing new technology to help with certain areas your examiners are focusing on, or by utilizing an outside vendor for their technical expertise, regulatory knowledge and security requirements.

These early successes can build the momentum for a longer-term digital transformation and help drive the organization toward the full embrace of a culture of innovation – a step that is crucial to effectively meeting the needs of its members well into the future. 

Employee Experience and Member Experience are Linked

The pandemic has also shone a light on the financial industry’s deep-rooted back office inefficiencies. Although employees have demonstrated remarkable resiliency during the crisis, some have struggled with working remotely during this challenging time. When working from home, many employees have limited or no access to paper documents housed back at the main office and some may also need additional training in the lost art of interacting with members over the phone. 

While it is well-established that digital technology represents the future of member engagement, what may be less obvious is how digital enhancements can help elevate the back office, as well.

By utilizing the power of the cloud on their internal operations, credit unions can automate manual processes, reduce redundant data entry and eliminate the need for cumbersome paper files. By allowing employees across the enterprise access to a secure central repository, the organization will realize improved operational efficiency. In addition, streamlined processes allow the team more time to develop relationships with current members or proactively prospect for new members.

The pandemic has demonstrated that improvements to the back office reach well beyond an organization’s four walls. With an enhanced focus on the digital channel, credit unions can foster a deeper employee to member connection and enable even higher levels of service and responsiveness.

By focusing on improving and deepening the experience of both employees and members, credit unions will succeed in fostering a positive internal culture while continuing to serve all their members’ needs.

Building the Tracks for the Future

As the world recovers from a historic and devastating pandemic, credit unions have a rare opportunity to grow and enhance their member relationships through the deployment of technology.

The emergence in recent years of innovative cloud banking solutions have laid the tracks for comprehensive digital transformation. Today’s credit unions are ready to embark on their journey, enabled through a staged and manageable station-to-station approach.

Cameron Sterrett

Cameron Sterrett

Cameron (Cam) Sterrett is the area vice president and general manager for nCino in Canada. With nearly 15 years of experience in the fintech industry, Cam brings a wealth of ... Web: Details