We have all heard how the pandemic put the demand for and use of technology into overdrive for most companies, including credit unions. Member expectations defined the need for faster adoption and more digital technology on the credit union’s part. The speed at which credit unions were able to make the shift put them in a position that could dramatically affect their future existence.
Another interesting result of the pandemic was the temporary pause on mergers and acquisitions (M&A). As people and companies start to return to normal, credit unions will face the reality of whether they have been able to optimize technology and weather the pandemic storm to be a major player, or if they will be swept away with the wave of change. According to American Banker, credit unions may be encouraged to merge in response to competition from large banks in 2021. This changing environment will pressure credit unions to determine what side they will come out on: acquiring or being acquired. Technology will play a large role in that determination – how successful a credit union has been in harnessing technology to improve everything from member experience to internal processes will make a difference.
Starting with the right premise
Having the right technology and products are insignificant if a credit union does not use them to properly position itself to compete with other institutions. This could put the credit union on the side of the acquisition table it does not want to be on.
By leveraging available technology and services, credit unions can consider what improvements can update longstanding procedures. For example, if it traditionally takes eight to 10 weeks to complete a home equity loan, credit unions should consider how it can provide members a loan in under a week. This could lead to internal improvements or adopting new technologies from fintech partners who have the services needed to improve overall member experience.
Cultivating a proactive sales culture
Another factor in a credit union’s decision when it comes to M&A is sales culture and the role it has played in helping to grow the business. First, credit unions should understand that sales culture goes hand in hand with member experience. A good sales culture supports member satisfaction by helping account holders accomplish their goals through access to current products and services. Second, by empowering your team with extensive education regarding available tools, staff can serve as a direct link between your institution and account holders, determining which products are valuable to members, which are not and where opportunities may exist within the market for product expansion.
For example, if a team member feels empowered to ask questions while a member is in the branch, they can reveal if a service is relevant to members. By simply asking members at the front desk if they are interested in electronic signature or notary signing services, employees can provide insightful feedback regarding the desire for those products. Other questions to members could offer information about other credit union’s account offerings as well. Though these questions may be uncomfortable at first, the result of the responses are a better-informed credit union that selects products members want, leading to retention and loyalty that feeds the bottom line. This, in turn, can grow revenue and affect how attractive a credit union is in an acquisition scenario.
The last word
As we see more M&As in the future, credit unions that have challenged themselves to provide the best products and services will be better prepared to make their own choice on what side they position themselves. This requires credit unions to take an honest look at their successes and areas of improvement. Technology and effective sales strategies that affect the member experience will play a significant role in that determination.