Credit union leaders across the country agree that the world of community finance is changing at a breakneck pace. But although this change is challenging, it also represents a tremendous opportunity for growth.
In conversation with bank and credit union executives, we’ve identified these 6 key trends in the evolving banking industry, plus some suggestions about how to leverage them for success.
- Getting Digital, Staying Personal.
The world is going digital, but craves a human touch. So, even while you are focusing on running an efficient, paperless credit union, you also need to “keep it personal” – providing a sense of community through everything from how you design your branches to the voice and tone you use in your everyday communications.
Focus too much on online channels, and you risk losing what makes your bank unique. Disregard the shift to digital, and your organization falls behind and becomes obsolete. The credit unions that succeed in the future will be those that strike the right balance between leading-edge technologies and meaningful engagement.
- High Expectations and Commodification
“The last, best experience that anyone has anywhere becomes the minimum expectation for the experiences they want everywhere,” says Paul Papas, Global Leader for IBM’s Interactive Experience practice. Today’s members are weighing their experience with your credit union against the heavily personalized, convenient services of companies like Amazon and Uber. How do you measure up?
And there’s a further hitch – your members expect perfect experiences from all brands, yet are not necessarily ready to pay a premium for what is perceived as a commodity. So you need to provide exceptional member experiences while also keeping a close eye on the bottom line.
- Simplicity and Speed
Your members are more educated than ever, but that doesn’t mean they want or enjoy complicated offers! Consumers choose products that are the easiest to use.
Plus, time is the new currency, so impatient members are increasingly likely to abandon an application process that involves multiple branch visits, or printing and mailing forms. That’s why a focus on speed and simplicity can really pay off for your credit union.
- New Revenue Models
Financial products may be commoditized, yet new entrants are able to enjoy great margins. Why is that? Those entrants are digital-first, so they can leapfrog years of industry experience the incumbents have, and capitalize on trends and technology. Meanwhile, you are contending with legacy back office systems that can impede getting a “single view of the member” and acting on it.
How can your credit union keep its momentum in the face of this increased competition? The answer lies in finding innovative ways to make your data accessible, then using it to uncover new growth opportunities.
- Rapid Changes in Technology
In financial services, FinTech has become a byword, and everyone is trying to understand the next transformative technology, and how it’ll influence their credit union. For example, the industry anticipates that Artificial Intelligence may soon create the “internet of me,” to deliver on the promise of radical personalization.
The credit union of the future will look very different from today’s reality, but great customer service never goes out of style. That’s why tomorrow’s top credit unions will be the ones who maintain a reputation for service excellence.
- Purpose and Culture Attract New Generations
Credit union leaders know they need to preserve their culture and values as key differentiators while adapting and changing the way they manage member experience to attract new generations.
The good news here is that your community orientation should make you a natural fit for ”buy local” Millennials – once you create an effective strategy to communicate those values to them.
Evolution Starts with Insight
At the heart of all the suggestions for success above is this simple truth: credit unions that want to adapt and succeed in our new, more competitive environment must start by becoming more nimble, data-driven organizations.
Credit unions usually have a wealth of member data, but having a lot of data does not automatically lead to success. Similarly, extracting timely insights is a prerequisite for success, but it is not sufficient. Only the ability to act based on insights derived from data analytics will mean growth for the FIs of the future.
The payoff is huge, though. Data-driven credit unions can maximize marketing performance, increase wallet share, and drive member engagement. They are empowered to understand the viability of products, and make better, more informed decisions across the entire enterprise.
These smart data users are poised to respond to changes in the industry quickly, and to gain market share while others stagnate. And with some careful investment in the right technology, you can join their ranks.