Navigating economic uncertainty: Strategies to grow through industry headwinds

Over the last several years, our industry has gone through a significant transformation including a global pandemic and major macroeconomic shifts. Today’s challenges are related to inflation and increasing interest rates, and credit unions are faced with the unique test of trying to adapt to their members’ latest concerns and needs. It is in the best interest of credit unions to focus on maintaining growth by leveraging technology to provide frictionless lending and account opening experiences.

While digital transformation efforts vary from institution to institution, there are always opportunities to best support members through tools that streamline lending processes, especially during times of economic uncertainty.

Over the years, credit unions have taken on a larger role in finding ways to alleviate member concerns during economic downturns by providing personalized support, adopting real-time financial processes, and focusing on the member experience. Here are a few key strategies institutions can implement to guide their businesses and their members to success.

Provide proactive, personalized solutions

In a fast-paced, digitally focused environment, credit unions need to proactively anticipate issues that may arise relating to their members’ financial experiences. In doing so, they demonstrate a commitment to and an understanding of their financial wellbeing. According to a recent study conducted by MeridianLink, 20% of Americans do not believe their primary financial institution provides them with enough personalization during difficult financial situations. Given this, credit unions should feel empowered to communicate important updates about members’ accounts, digital banking and payment options at their disposal, and safety and security measures.

Providing solutions proactively will increase member loyalty. In fact, 73% of consumers expect financial institutions to understand their unique needs—up from 66% in 2021. Another 53% would switch FIs if services felt impersonal.

The focus members place on proactivity extends to customer service more broadly and goes far beyond timely and responsive communication. Members want answers instantly, and they prefer to work with institutions that offer easily accessible customer service that doesn’t necessarily require an in-person visit. Service levels are critical and will impact whether a member remains committed to their credit union or not. In fact, an NGDATA consumer banking survey found that 41% of customers listed poor customer service as the primary reason they would leave their bank. Staying connected with members through mobile apps, chatbots, social media, and email will help institutions remain relevant.

Implementing end-to-end consumer lending, account opening, and card marketing automation solution is an effective way to track and manage personalized communications.

Deliver digital-first experiences

As introduced earlier this year, financial institutions can employ certain tactics to meet member expectations while fostering their own growth in a challenging economic environment. Member demand for digital capabilities continues to grow, which means becoming part of a member’s digital lifestyle is a necessity.

Paying attention to how expectations change is essential. More than half (55%) of consumers said they would switch institutions for greater digital capabilities. Technology is always evolving, which means consumer reactions are changing too. More importantly, credit unions must be able to offer their members options to best suit their lives. The more ways credit unions can be of service to consumers, the more valuable the relationship becomes.

• Personalized, actionable offers: Members want as much customization as possible. By streamlining application and approval decision times, credit unions are better positioned to meet their members’ requests for quickened and personalized processes. Credit unions can get a leg up against their competitors by providing similar offers while also simplifying the application and approval experience. Imagine a member seeing the same offer they received the day before, but only this time they needed only one click to accept.
• End-to-end digital experiences: As the broader economy embraces digital-first experiences that deliver instant responses, credit unions face stiffer competition and tougher times in retaining their member bases. Millennial and Gen Zers are taking ownership of their finances and choosing to join credit unions, but they are more likely to shop around and find institutions and products that meet their desired experiences, such as digital banking. Just as someone would do research and shop for assorted brands of cars, televisions, and other electronics, the same mentality goes for finding the right credit union. The most successful organizations will provide a clear, differentiated value proposition and will continuously reinforce that through each interaction and transaction with members.
• Member satisfaction: Maintaining a healthy member relationship starts the moment a member chooses to open an account at a credit union. Members who encounter friction when opening an account are three times more likely to switch institutions than those who don’t. In providing a seamless member experience from the start, these institutions are well positioned to build trust and maintain high satisfaction rates among their audiences.

Keep up

Looking forward, credit unions can continue to use digital developments, like mobile app activity, to respond to members’ growing expectations, streamline operations, quickly adapt to changing business needs, and manage the highly flexible relationships that exist between people, businesses, and accounts in real time. Credit unions can ensure their own success by focusing on improving the member experience.