At its recent big.bright.minds Conference, Filene Executive Director Mark Meyer lifted up three emerging themes in financial services: digital transformation, mining for growth, and remixing the value proposition.
This really struck a chord with me because my organization is smack dab in the middle of addressing all three of these challenges. I suspect the same may be true for your credit union. I want to touch on two of the three in this article: digital transformation and remixing the value proposition.
Digital Transformation — Artificial Intelligence is Key
Digital transformation is one of the hottest priorities. And rightly so. Millennials and Gen Z — basically everyone age 40 and younger — demand digital engagement. Many of us older folks have also embraced technology. Honestly, I can’t remember the last time I physically walked into my credit union.
This requires us to reimagine how we serve members. Banks are spending lots of money on disrupting their traditional models. McKinsey advises banks that reimagine customer engagement enables them to unlock new value through improved efficiency, expanded market access, and greater customer lifetime value. And McKinsey sees artificial intelligence (AI) technology as key. “Artificial intelligence technologies are increasingly integral to the world we live in, and banks need to deploy these technologies at scale to remain relevant.” (“Can Banks Meet the AI Challenge?” September 19, 2020)
OK, so credit unions face an uphill battle in the technology arms race with mega banks that have multi-billion-dollar IT and innovation budgets. Fortunately, AI-powered digital engagement tools can help level the playing field. They can leverage data to enhance your members’ digital banking experiences. They can deliver advice that is personalized, driven by conversational AI, and always compliant. They use gamification and behavioral change approaches, and enable targeting members at key moments of need.
Where to start? The National Credit Union Foundation collaborated with the Financial Health Network and Members Development Company to publish a report highlighting the benefits of AI and opportunities for credit unions to apply the technology. (“Credit Union Technology Watch: Artificial Intelligence,” 2020) Check it out if you haven’t read it. The report also spotlights a few AI innovators. Earlier this year, CreditUnions.com featured three AI technology companies — Abe.ai, Interface and eGain — as member experience finalists in its innovation series. You also could consider reaching out to your CUSO, or another credit union that has some experience with AI.
Digital Transformation — Empathetic Technology
I’ll go one step further and say we should be striving to embed empathy into our digital engagements. Accenture advises banks to “find digital ways to build trust and demonstrate that they understand both their customers’ needs and the challenges they face.” (“Banking on Empathy” 2021)
Of course, the same is true for credit unions. We know that building trust is so critical to building deeper member relationships. In order to build trust and empathetic relationships in a digital age, we’ll need to embrace AI. “Chat technology supported by AI is going to be crucial for banks to better understand their customers’ emotional needs,” says Accenture. “Chat can also have a distinctive personality that embodies the brand values of the bank and generates surprising moments of empathy and kindness simply by the way it responds to customer requests.”
Accenture found that Empathetic Banking Leaders — those with strong capabilities for understanding and responding to the emotional state of their customers — significantly outperformed their peers financially.
Remixing the Value Prop — Leverage Human Touch
When Meyer talks about remixing the value proposition, he’s saying that credit unions must figure out how to leverage their own unique strengths to create differentiation and a compelling value proposition.
Isn’t the personal, human touch a key part of the credit union value proposition? I think most credit unions want members to feel like they’re part of a trusted family that knows and cares about them. If that’s true, be sure that the human touch doesn’t get lost on your digital transformation journey.
I can offer an example from my organization, GreenPath Financial Wellness. We’re partnering with a technology company to build an AI-powered chat-bot. The intent is to offer an innovative way to engage and provide value to users digitally. However, after several months of focus groups and usage at 28 credit unions, users have made it clear that the human touch is still critical. Members like the digital interaction, but they also want an option to access a real human. Sometimes a human is needed to help users take the next step or connect all the dots. Even if they never need to talk to a person, users like knowing that the option is available for them.
The credit union business isn’t for the faint of heart these days. Change is everywhere. It’s exciting, yet stressful. There’s risk and uncertainty, but so much opportunity.
As you move forward on your digital transformation journey, be sure to keep member experience front and center. And don’t lose sight of the human connection.
The most successful organizations will combine human and digital interactions to meet member needs in ways that make them feel understood and valued.