Expanding the credit union difference across digital channels
Credit unions have spent the last century empowering their communities. Through the decades, credit union members have been able to rely on these local institutions for more than just the products and services they offer. As a Credit Union Development Educator (CUDE), I’ve heard countless stories – from institutions big and small, across the globe – of credit unions assisting members and the businesses they own when no one else was willing.
Many credit unions offer in-house financial counselors, education and resources at no cost to their membership. The ROI on such activities is often hard to recognize, especially if you take the near-term view that far too many in the financial services industry take when evaluating such programs. By taking a longer-term view of these programs, credit unions have been rewarded with member loyalty and superior customer satisfaction ratings relative to their peers. That was until recently, as credit unions saw their 2020 American Customer Satisfaction Score slip below the banking industry, and to historically low levels.
So why the change? Have credit unions simply fallen out of favor with the American public? Surely there are many factors contributing to the 2020 low satisfaction scores, but it is impossible to evaluate any trend in 2020 without considering the impact of the COVID-19 outbreak. Many credit unions were forced to shutter their branches in the early days of the pandemic, and although most had banking services already online, they were not able to drive the same customer experience through those digital channels. What’s more, credit union education and counseling programs were paused or unable to be delivered effectively through those digital channels.
A recent study from Access Softek revealed that 20% of credit union members expect “permanent decrease in the frequency of their branch visits once post-COVID-19 life begins.” Additionally, more than 1/3 survey respondents said that digital channels “are better at helping them meet their financial needs” than in-branch service.
The success of the credit union industry is dependent on their ability to extend their difference to these increasingly important digital channels. Many credit union members are already seeking these types of solutions. A recent Aite Group survey found that 58% of consumers are interested in using a virtual financial coach to help them meet financial goals.
Andy Manthei, Business Development Specialist at GreenPath, shared, “In some recent user testing we observed reactions that mimicked similar data to a report by Commonwealth, Closing the Fintech Inclusion Gap, around marginalized communities and trust of digital financial health tools. We had users report feeling more confident in getting unbiased advice from an AI credit coach due to her being trained by a non-profit with over 60 years of financial health experience. They also shared an ability to be more vulnerable in asking questions since there was a perception that they would not be judged.“
This is a key point and worth reflection for many credit unions who have brand promises centered on “serving the underserved”, but struggle to demonstrate that in their product or financial health offerings. Continued development of digital channels not just as transactional tools, but as an extension of the service and financial partnership credit unions have provided their members for decades, is essential. By leveraging new technology, data, and industry partners, credit unions can set themselves apart as the preferred financial partners for the next century and beyond.
