Making digital personal

While the current banking landscape is mobile, global and immediate, it is also largely homogeneous. Most financial institutions have taken the same, generic, just-good-enough approach to digital banking, creating a commoditized online market in which consumers are left to shop mainly on price. Since only the biggest institutions can compete on price alone, credit unions and other community financial institutions must fundamentally differentiate their digital offerings in ways the biggest banks can’t, or else risk waging a losing battle in an ongoing price war.

The risks of commoditization are compounded by the allure of new competitors. Non-bank financial technology companies (fintechs) offer consumers innovative one-off alternatives to individual products and services in the standard digital-banking stack.

The good news is, credit unions can compete, but they must do so using their core strength, personal service, inside the digital channel—something that the size and scale of the largest competitors prohibits and something most fintechs simply don’t or can’t offer. Think about it, have you ever tried to call Square?

The digitalization of banking has led to depersonalization and deterioration in service. Credit unions, like most financial institutions, have followed the same path of digital automation of everything, despite personal service being the hallmark of their movement. Most credit unions have yet to translate the power of their personal member service and support inside digital channels, but doing so is essential to their differentiation and viability going forward. The real test of digital banking is not so much how members can customize their experiences with self-service; the real test is what happens when members reach the limits of self-service inside digital channels.


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