I hear a lot these days about the on-going changes that our industry is facing. But far and away the biggest concern seems to be how technology is affecting every aspect of service delivery – from deposits to account management to lending – and what it takes for a credit union to successfully transition from traditional service delivery to mobile and omni-channel strategies.
There is no denying that mobile banking is changing the way consumers access and utilize financial services. According to research by Aite, practically every usage category for mobile is expected to more than double over the next couple of years. Some are expected to grow three to five times over the next four years. Aite projects that the number of U.S. consumers using a mobile device to access their bank account will increase from 33 million to 96 million this year.
I learned first-hand recently about the real challenge web-based banking services pose for traditional financial institutions when a young relative tried to get a car loan from her credit union. As a recent college graduate, she didn’t have much work experience. As is often the case in this situation, her credit union couldn’t help with the loan. The car dealer suggested that she check out an online lender that he had worked with before. So, she went to the website and within a short amount of time she was able to secure the loan – at a favorable interest rate as a bonus.
With mobile and omni-channel products and services opening new opportunities for consumers, financial institutions are feeling pressure to develop technology-based strategies to keep up with the rapidly growing demand.
But, “How,” I am often asked, “do you balance the transition from brick and mortar to technology while maintaining adequate staffing, and how do you manage your investment without blowing the budget?”
Take a hard look at your situation
Now is a great time to take a look at your internal structure. You must make sure you have the right number of facilities and adequate staffing to maintain your traditional service delivery systems while you plan your strategy – if you haven’t started – or fine-tune your plans for providing new service options for your current member base and potential market.
Then determine how much technology you anticipate it will take to meet the current and future needs of your account holders. And while you may be tempted to base this on generally-accepted assumptions that Millennials are the primary users of mobile technology, I have seen plenty of evidence that Baby Boomers and Gen Xers are tuning in to the convenience and flexibility that mobile banking provides.
Don’t leave it to assumptions to make this important decision. Make sure your front-line staff has the training necessary to obtain this information from your account holders. How often do they visit a branch? Do they use an ATM? Do they access their account on a mobile device? Do they rely on the credit union as a resource for financial advice? If they don’t currently use mobile banking services, might they use them in the future?
Another important consideration is the demographics of your institution’s future account holders. While you may have a mix of service preferences with existing account holders, planning for future needs now will save you time and help with budgeting over the long-term. In addition to the cost to implement new technology, don’t forget to factor in the cost of employee training and member communications materials.
Communication is key to a successful transition
Just remember, any major change in your operational structure will impact your staff as well as the quality of service provided to your members. You can lessen any negative impact this might have by making sure all employees are well-informed throughout the process and have an opportunity to provide input into how the changes will affect their work environment.
Plus, your front-line, member-facing employees can provide a great deal of valuable input on what your account holders want and need. They can also serve as important ambassadors to promote the products and services you offer, and explain the benefits they provide to account holders.
Is your current branch structure making you less competitive?
A branch profitability study can help you to determine if you have the right products and fee strategy in place to maximize your potential income, as well as to meet your members’ current and future product and service needs.
A review of your existing non-labor and non-interest expenses can also help to make sure you aren’t paying too much for your service contracts. This can help you find the resources you need to invest in new technology, and provide the new programs and services necessary to grow your institution and remain competitive in your market.