By Ray Birch
ST. PETERSBURG, Fla.—That Uber Eats food delivery that arrived quickly after being ordered on a convenient and simple app has changed what members expect from their credit unions, even if those same members don’t realize it.
“With competitors introducing digital-first solutions, consumers today demand prompt, seamless service, especially for high-frequency, less complex processes like obtaining a new credit card,” said Scott P. Young, SVP of emerging services at Velera. “While many credit unions have streamlined in-branch and contact center operations to meet this demand for speed, other services, such as digital account opening and credit card loan origination, still lag behind—all of which can cause member dissatisfaction and frustration.”
Young said it’s time for credit unions to fully address the consumer demand for speed or risk losing market share.
“As many credit unions approach strategic planning and budget season to determine which tools to add to their arsenal, it is important to consider the market landscape, member expectations and opportunities surrounding consumer loans,” Young said. “It is imperative for credit unions to attract and retain members to win consumer share while staying competitive in today's digital-first world.”
Practice Vs. Desire
Young pointed out that a 2023 Curinos study found nearly three-quarters of new accounts are opened in person at a branch.
Scott Young
“However, the data also shows a strong preference for digital account opening, with 70% of consumers favoring digital methods,” he said. “When selecting a financial institution, 40% of consumers prioritize the convenience of digital banking, whereas only 17% value branch proximity.”
For more complex, less-frequent loan types like mortgages, home equity lines and auto loans, consumers understand the need for additional time and effort, Young said.
The Flip Side
The flip side, of course, is “for simpler, more frequent loan types like credit cards, they expect a quick process with minimal paperwork. Unfortunately, reality often falls short of these expectations,” Young said.
What all that means, Young explained, is that providing a one-size-fits-all application experience for all loan products can create unnecessary barriers.
“Fortunately, credit unions now have the opportunity to streamline processes for high frequency products, improving the application experience,” he suggested.
Example Cited
One example cited by Young: Not using digital card delivery can cause credit unions to miss significant potential revenue.
“However, digital account opening and credit card origination often face challenges, such as lack of automation, fraud, integration issues and outdated technology,” he said. “Partnering with a fintech solutions provider like Velera, which offers digital origination solutions, can address these challenges. Implementing an automated digital origination process with secure transactions and seamless system integration can improve the member experience, aligning it with today's fast-paced expectations.”
‘Numerous Opportunities’
Young said offering a seamless end-to-end experience presents numerous opportunities for credit unions, including:
- Increased membership growth through a smoothly integrated new account opening process
- Reduced operational costs via automated underwriting capabilities
- Instant digital card credentials provisioned to a mobile wallet for immediate use
“Instant digital card issuance not only enhances the user experience but also serves as an effective sales strategy,” Young said. “Credit unions can offer members the ability to use their new card credentials online or in-store immediately – an option not consistently provided by large issuers. This gives credit unions a unique competitive advantage in gaining market share. With real-time lending approvals and instant access to card credentials through digital banking and mobile wallets, credit unions can meet cardholders' expectations, increase revenue and drive growth.”
Comments
Post a Comment
Please no profanity or political comments.