Keep the member experience front and center through digital transformation

For credit unions, members are at the center of everything. Members take out loans and deposit their hard-earned paychecks in share accounts. They rely on their credit union for help with all aspects of their financial lives, from purchasing a home or auto to saving for college and retirement. Members stay loyal to their chosen credit union based on the personalized service they receive, and the cooperative movement’s promise of “People Helping People.”

A credit union’s member-owners are the heartbeat of the organization, and the cooperative’s success rises and falls with how well it serves their needs. Yet, the financial services landscape is growing more competitive, and credit unions face a number of challenges as they fend off big banks, marketplace lenders and other institutions vying for their members’ relationships.

In 2020, for the second year in a row, credit unions ranked below banks on the American Consumer Satisfaction Index (ASCI) annual satisfaction survey. In fact, overall satisfaction with credit unions fell to a historic low of 77 on the survey’s 100-point scale, 10 points below its 2011 peak.

Declining member satisfaction is affecting credit unions’ financial results, as well. Cooperatives’ share of both the auto and mortgage lending markets have been in decline for the past three years, while loan to share ratio, which has dropped precipitously since the onset of the pandemic, remains unsustainably low at just 69.5% as of the second quarter of 2021.

The question for credit unions becomes: How can they reverse this tide, improve overall satisfaction and grow member relationships?

Knowing Your Members is the Key

To retain loyal, satisfied members, credit unions must understand them at an individual level – their needs, lifestyles and challenges. Truly knowing your member requires access to a robust set of data, including information on their debt, income, transaction history, loan applications, demographics, credit bureaus and deposits.

For many credit unions, gaining access to and gleaning actionable insights from such granular-level data requires digital transformation. Those cooperatives that have embraced new technologies have been able to transform their institutions, experiencing benefits such as a full digital banking experience, improved operational efficiency, better member service and more effective regulatory compliance.

But digital transformation can be expensive, as well as disruptive to a credit union’s culture and existing processes. Fortunately, there is a way for a credit union to get moving on its digital transformation journey without “breaking the bank.”

Digital Transformation is a Marathon

Micro-transformation projects represent a smaller-scale, iterative approach to technological innovation. These quick technology upgrades allow credit unions to remain competitive and member-focused in a financial services marketplace that is rapidly shifting to the virtual world. They represent a way for credit unions to get quick wins in areas like operational efficiency and member service, at a lower cost and with less internal and external disruption than a full-scale transformation project.

For example, MountainCrest Credit Union (Arlington, WA) wanted to maintain its commitment to personalized service, and realized it needed to expand its access to deep data insights to do so. MountainCrest embarked on a micro-transformation project, implementing a leading data-driven portfolio analytics solution to gain a deeper level of knowledge of its members’ needs.

“Because we’re small, we can be personal with our membership and there are advantages to that,” says Mark Morrison, President and CEO of MountainCrest. “With only two branches, we know our membership really well and we provide great service. We want to make sure they’re taken care of in the best way possible.”

Larger institutions can also benefit from this approach. Navy Federal Credit Union, the largest cooperative by asset size in the U.S., wanted an improved experience for its employees and members. It accomplished this through implementation of an industry-leading bank operating system in its small business lending operations.

“Our employees can service members with key insights gained on the digital banking platform. We want to provide an experience that is quick, effortless and enjoyable, and we see [this] as being the tool to provide those things and more,” states Dave Ledwell, SVP, Consumer and Business Lending, Navy Federal Credit Union.

Remember that while credit union digital transformation is a marathon, it can be accomplished as a series of shorter races. Organizations that focus on continuous evolution will be the most successful and resilient over time. The payoffs, even from small change projects, will rapidly accumulate and result in massive improvements for your institution.

To learn more about how to transform your credit union to keep the member experience first, check out nCino’s thought leadership white paper: “Think Small: How a Micro-transformation Strategy Can Yield Big Results.”