Last week’s Memorial Day weekend, the unofficial start to summer 2021, felt a lot like pre-pandemic normal. Travel increased significantly throughout the country, and so did the opportunities to more closely connect with each other—to move from the virtual and socially distanced back to live and in-person. It was a clear reminder of the emotional power of true connection.
Deeper connections have always been a differentiating strength for credit unions. And connecting with members has never been more critical as we face a continuously increasing threat from new banking alternatives. With growing options for managing their money—from nimble, specialized neo banks to behemoth global brands like Starbucks, Google and Amazon—consumers are seeking very specific value from financial products and services. They no longer feel tied to one financial institution to meet all their needs, compounding the loyalty challenge at a time when, for the second year in a row, credit unions fell behind banks to an historic low on the American Consumer Satisfaction Index (ACSI).
Supercharged Service Through Niche Banking
To thrive post-pandemic, credit unions must not only increase satisfaction, but delight members through dynamic, loyalty-building experiences. That will require leveraging long-established strengths while embracing new, innovative thinking. One promising new approach is niche banking.
Niche banking is in credit unions’ DNA. But in today’s highly competitive environment, we can go deeper than fields of membership and build more lasting relationships. To thrive and meet today’s consumers’ sky-high expectations, the key is delivering unique value unavailable anywhere else.
Expectations accelerated over the last year as people became dependent on convenient, one-click digital services during pandemic-forced shutdowns of physical locations. Credit unions quickly innovated through the crisis to find ways to empower people and enable legacy systems to keep meeting immediate member needs amid extraordinary upheaval. But as we move forward, innovating to maintain isn’t enough. With so many banking options, members will seek alternatives when needs are unmet.
Fortunately, credit unions have access to the tools—and the foundational commitment to service—necessary to compete and win against today’s challengers. It will take more, though, than simply delivering the same features through new digital channels.
What’s Next Starts with Members, Not Features
Getting niche banking right in the new digital age requires fully leveraging the member data we already have to better understand behaviors and unarticulated needs. With data and insight, any size institution can create new revenue streams from hyper-targeted products and services that deliver the personalized experiences and differentiated value credit unions are known for.
We can no longer look at members as homogeneous. We have to focus more deeply and connect emotionally. Member data is disparate and lacks insight until it’s woven together to tell a story about people, members, communities. It takes data expertise to recognize trends, patterns and affinities and may require an expert partner with sophisticated data tools to understand and segment member groups and identify, create and deliver targeted financial solutions.
Through this process, one financial institution identified a large number of female entrepreneurs who were also the primary income earners in their households. This level of data allows a credit union to develop targeted financial products to help members achieve their specific goals, while deepening relationships and boosting long-term loyalty.
Today, more digital channels isn’t the model to thrive. Rather, it’s about creating emotional connections with groups of members you know and understand. Many financial institutions take a build it and they will come approach to banking features. But this misses that essential emotional hook members expect from their credit unions. With a sophisticated niche approach, you send the clear message that you understand your members’ unique sets of challenges and goals, and you have the right solutions to support them.
Deeper Connections Take Ongoing Innovation
Nymbus Labs is helping credit unions identify niche segments and validate them based on size and opportunity value. Then, experts determine if existing financial products meet the needs and goals of the niche, and they map out how to market and deliver them most effectively, or help build new solutions. Twelve ready-to-launch niche banking brands have been developed, each is supported with technology-driven features and functions; a brand story that connects with the niche target audience; and highly developed business plans to quickly go to market within 90 days. It’s a process of ongoing innovation and discovery that is driven by emotion and resonance, not technology.
Keying in on emotional connection with segmented member groups is the key to unlocking deeper, lasting relationships. It’s about thinking like a brand, not like a financial institution. This shift from a technology-first approach to creating brand-first, emotional connections with niche member segments is the model of innovation necessary for credit unions to not only keep up, but thrive.
By leveraging our long-established strengths, emotionally driven relationships will redefine a post-pandemic better normal—one that is about people, not technology. And isn’t that what credit unions have always been about?