Member Experience Trends

Modernizing Your Credit Union: 4 Key Trends to Watch in the Next Year for a Better Member Experience

Some 78% of financial executives think their work is going to change over the next five years because of new digital business trends. Members expect to interact with a credit union the same way they order groceries or toilet paper.

But, as we move into 2020, there’s some worry about the certainty of the economy toward the back half of the year. More than two-thirds of CFOs in the U.S. are predicting a recession, according to a study from Duke University/CFO Global Business Outlook.

It’s only a prediction, but if a recession does happen, your credit union needs to be ready. The big banks will be left tightening up their credit belts, meaning customers will turn to their local credit unions for loans. These folks (of all ages) will head into a branch or hit digital channels that can provide instant gratification. They’ll crave more face-to-face transactions that produce results served up with a side of empathy.

Some trends, like video banking, will transform into a credit union mainstay as it lets members talk face-to-face to an agent, while credit unions can centralize their workforce.

Here are four other trends that are shaping the digital landscape for credit unions into 2020:

1. A move to the cloud becomes more urgent

A few years ago, credit unions felt pretty confident about their future and that of their technological infrastructure. While the digital forces roiled industries around them, life in the financial sector seemed pretty well cushioned against the chaos. After all, incumbents had cemented relationships with a vat of members and vendors over the decades. Vertically integrated business models insulated them from external shocks, and banking regulations made it nearly impossible for competitors to get into the game.

But the digital tide financial execs thought they’d outpaced is now rolling onto the beach in the form of rising customer expectations, unexpected competition, and the evolution of the platform economy. All driven by digital technology.

According to a study from our friends at NNT Data, nine in 10 financial services and insurance execs think this is the year for a full-scale digital transformation. The top execs are done investing in just bits and pieces here and there. Instead, they’re favoring a fundamental change in technology and process. A change in how your credit union interacts with your members, and each other, on a daily basis.

The same study found 61% of FS&I companies have been forced to move past their traditional business models because of digital disruption. Another study from The Financial Brand found branch visits are projected to decline by 36% through 2022.

Don’t get me wrong, physical branches will still play an important role in fulfilling the credit union mission. But in the next year (and from then on), members will expect service excellence through a host of digital channels. Your core and member services platforms need to be agile enough to deliver and then scale.

2. Members are getting even pickier with their standards of service excellence

Modern technology and instant communication social and retail platforms have conditioned your credit union members to expect instantaneous results. My internet went down for two minutes while writing this post (gasp!) and my anxiety peaked. People – you, me, your members – have lost the ability to wait. Tweets, Instagram, and texting require no patience and they provide users with immediate gratification. And people have come to expect the same from the institutions they bank with. 

It’s no longer enough to give members amazing service and competitive rates. Now they want all of that, but they want it yesterday. And if they’re not getting that from their credit union, they’ll look elsewhere.

The good news, though, is credit unions are traditionally known for providing a more personal and flexible customer experience than retail and commercial banks. In fact, according to the 2018 Temkin Experience Ratings, credit unions came out on top for customer experience in the financial services industry. Again.

Temkin Member Experience Ranks 2018

But, big banks aren’t too far behind. Banks have spent the last several years focused on their tech upgrades. They’ve come to realize the personal touch is something customers crave. So they’re shifting attention to creating strategies that pair digital interfaces with personal experiences.

As big banks strategize on how to improve customer experience, your focus this year should be on giving your MSRs a better experience at work. Inefficient and disorganized databases leave your frontline staff confused and members annoyed. By empowering your MSRs with fast access to information and streamlined processes, you’ll make their lives at work easier. Leaving them with more opportunity (and energy) to solve member problems and inquiries fast and well.

3. It’s time to align the member experience to…the member

Deliver an experience that your members want to be a part of. Delight them so hard that they go home and brag to their friends and family about their experience with your credit union. Or (better yet) they share a braggy post on Instagram immediately. (Hello Millennial members.)

Part of aligning the experience means to meet them where they are. Give them a plethora of channels to interact with you on. When they want. How they want. Then, give them a way to change their minds, mid-interaction.

So how, you might ask, do you align your member experience strategy to actually delight your members?

Answer: Omnichannel.

“Omnichannel” is one of those words (like “personalization” and “big data”) that’s quickly earned a spot on the CX buzzword Bingo card. It’s overused and (often) abused.

But at the heart of every great member experience is an interaction that’s easy to navigate and execute, for both the customer and your MSR. It’s time to slow down and think through all the ways your members are reaching out to you. And make sure you have your foundational bases covered.

Have you slowed your roll to make sure every interaction, and your bigger experience strategy, is easy for your members? How about for your MSRs? Are you strategizing based on real insight or just a hunch, or (worse) cliches?

Your members are looking to interact via digital channels like websites, mobile apps, and video banking, among others. In fact, according to McKinsey & Company, 65% of members are interacting with their credit union through multiple digital channels.

But as we said above, that doesn’t mean they’re skipping out on the traditional physical channels. In fact, those who use mobile and computing channels more than once a week are more than 60% more likely to be active branch users. That means, while interested in new technologies, members still value face-to-face interactions.

Some credit unions are turning to a centralized banking model, where they’ve installed video kiosks at branch locations. Those kiosks let their MSRs and other member-facing folks provide real-time, face-to-face interactions to members while cutting FTE costs (by ~$1 million a year).

See how Vibrant Credit Union saved $1 million a year by switching to Sharpen. 

4. Security and compliance will remain at the forefront

Credit unions and financial services pros are investing billions in security and compliance, and it’s not looking to slow down over the next year.

Data from ForgeRock found that cyberattacks to U.S. financial services organizations cost the industry more than $6.2 billion in Q1 2019 alone. That’s up from just $8 million in Q1 2018. Even though investments in information security products and services have been on the rise (with $114 billion invested last year), cybercriminals are still attacking any organization they can to gain access to valuable consumer data.

Financial services companies get attacked over a billion times each year. That breaks down to about 30 attacks every second. 

The hard truth to swallow is, though, that not all of these breaches are the result of some schemey faceless person oceans away. IBM and the Ponemon Institute estimate that 50% of incidents are the result of malicious or criminal attacks. System glitches were tagged as the culprit for 27% of breaches and 23% were the result of negligent employees.

Threats to your security and compliance exist both outside of your walls and in. Negligence is as real of a threat as a faceless hacker.

This year, as you invest in more (and better) cloud technology, make sure your team is up-to-date on adoption. Spend time to coach and train your employees so they understand how to use the platforms securely.

Interested in digital transformation, but don’t know where to start? Here’s a step-by-step guide on crafting your strategy. Or get in touch with us to see how we can help your credit union’s member (and employee) experience.