Let’s be honest, 2020 and 2021 to date were nothing like we expected them to be. Business plans were thrown out the window, future trends arrived earlier than expected, and digital banking received some major upgrades. Recently, Frank Diekmann Cooperator-in-Chief and co-founder of CUToday.info spoke at a webinar I attended and shared the things he wants credit unions to consider when planning out the coming years.
Below, I’ve delved further into the topics he listed and shared some ways credit unions can begin thinking about them and get ahead of the curve. The list covers everything from new FinTech trends, to expanding field of membership, and everything in between, so let’s get started!
1. The big lesson of 2021: 2031 arrived a decade early
The last year threw some major curveballs at the industry. Thanks to the COVID-19 pandemic, all the planning, forecasting, and predictions of banking came true a decade early. Consumer expectations have changed, standard branches are being changed and reshaped, we’re facing issues and updates with payments, and our standard field of membership is looking at an expansion. These things aren’t happening in the future, they’re happening now. If you were holding back on updating during the pandemic, you need to get caught up and start planning for a more tech heavy future, or else risk getting left behind.
2. They’re not going back: big changes in consumer behavior
A permanent shift has occurred in consumer behaviors in 2020, as branches were closed and members were forced to use mostly digital banking methods. Despite branches now being reopened, don’t expect things will to return to how they were. Members have grown comfortable with virtual meetings and online banking–prefer them even. As such, Forrester predicts that in 2021 brands will see 40% more online action.
It’s time to make sure your digital banking fits your members’ needs and is easy to use. Consider investing in ITMs or other new technologies to assist the members who do come into a branch.
3. Where is everybody going? To challenger banks and FinTechs
FinTech companies such as Chime, Acorns, Fave, and MoneyLion saw 50-100% growth during the pandemic. Over the next few years, this growth is only expected to continue. The apps are clean, modern, easy to use, and are aimed at teenagers and young generations. They take advantage of lower costs, building a strong and trustworthy brand, having good customer service reputations, and a great digital experience, our keyword (more on that later). Credit unions need to take note. In fact, I’ve covered the topic on credit unions vs FinTechs in more depth here.
4. Trust: don’t assume you have it
Credit unions are supposed to own this. We are supposed to be the kind, local, community-supporting financial institution. But how do we get trust? Truth is, people tend to believe word of mouth and reviews over everything else. A good recommendation from a friend or a slew of great online reviews will trump ads any day. Credit unions need to leverage their own members to spread the word.
Do you have social media set up? Are you responding to questions and reviews online? What about Google Business? Do you have a page set up for members to leave reviews? If you’re waiting for someone to walk up on the street and start doing your advertising for you, you’re not going to see results.
5. Have great products and services? It’s not enough
Historically, most credit unions tend to build around products and services. They advertise their products and highlight their great services, but consumers don’t think that way anymore. They don’t want your specific products or care about them, they care about the overall experience.
FinTechs bundle commodities together in a seamless ecosystem and make it fun and innovative. Younger generations feel empowered and in control of their finances. What is the credit union experience like? How can we improve it? If we are not open to changing the credit union mold, we will find ourselves behind on trends and losing out to new and popular FinTechs.
6. How are you reaching out?
Have you been actively reaching out to your members and community or are you waiting for the phone to ring? Recent statistics show that credit unions are falling behind in reaching out and connecting with their members. Furthermore, when members were asked if they were contacted by their bank or credit union during the pandemic, most remembered their bank reaching out but many did not remember their credit union doing so.
Even more so, half of those contacted by banks said their opinion of their bank improved but only 9% of credit union members said their opinion improved. This can be damaging for credit unions, as we are the ones who are supposed to care for our communities and members in a way banks don’t. If we lose that aspect, members may be quick to turn to banks and other financial institutions.
7. Members are dissatisfied
As credit unions, we pride ourselves on our fantastic member service, care for community, and honest desire to help our members succeed financially. Unfortunately, the numbers seem to say we’re falling behind in that effort. As mentioned before, consumers found that not only did banks reach out more and improve their image during the pandemic, but for the second year in a row, credit unions fell behind banks on customer satisfaction.
So where are we dropping the ball? Have you been showing an honest care for your members? Putting work into giving back to the community? Furthermore, think back on that word we used earlier, experience. Are you providing members with a good experience offline and on?
8. Get contactless! It’s here now, not later
Contactless payments and services were growing in popularity before the pandemic, but they certainly skyrocketed during it. Despite how we may feel about it, the facts are most people nowadays prefer to do things online or on their own. They don’t want interaction if they don’t need it.
Research suggests that after the pandemic is over, consumers will use these contactless methods even more, not less. Are you on file with subscription services (Hulu, Amazon Prime, etc.)? Can your credit union’s debit card be placed in a mobile wallet? You need to be on top of their wallet to connect with members. Your card needs to be the first one they see. If you’re not up to date on this, now is the time to get started.
9. Field of membership rules
This has been a trending topic recently, as online banking becomes the preferred method of consumers. Credit unions, banks, and FinTechs alike are all catching on, with each type of financial institution now offering completely virtual institutions and allowing anyone, regardless of location, to join and open an account virtually.
Recently there has been a NCUA proposal to allow ATMs, websites, and mobile apps to be counted as “service facilities.” The intent of this being to provide services to underbanked communities who may not be close enough to a physical branch to qualify. This means that even if community members aren’t local to the credit union, they could still join and be included in the field of membership if they are close enough to an ATM or can access the online website. This means that competition between credit unions can arise as the field of membership expands. Credit unions should pay attention to this proposal as it develops in the next year.
10. Have fun
Don’t let all your efforts to connect with members be serious and financially focused, add a little fun and excitement in. Especially in the last year as things were stressful and many members were struggling, credit unions found ways to add a little humor in. One credit union for example hosted a spare toilet paper campaign, encouraging members to bring in their excess toilet paper to share with community members who may be lacking. Not only did their members find this funny, but it was a good way to show the credit union supported the community. Make sure you’re finding creative ways to get connected.
Take a breather
Now that I’ve given you something to chew on, consider how your credit unions is doing in these areas. Are you expanding digital solutions? Are you maintaining a personal connection with members? What are you doing to improve the lives of the people you care about? Next week I’ll be back with eleven more areas that Frank addressed and provide my own insight.