According to one expert, who says brand alone no longer cuts it
and that CUs must be careful of partnering with fintechs “without the fin.”
Cornerstone Advisors Director Tim Daley said the data is clear
about how critical it is for credit unions to not only excel at digital
delivery but also use the e-channel to effectively target and market to
members.
“You are either leaning into a digital first strategy or you
will merge with someone soon enough. The stakes right now could not be higher,”
Daley said.
Daley stressed, as have other analysts, that consumers’
preferences for product and service delivery is being influenced by major
retailers such as Amazon and Starbucks, and they are expecting the same from
their credit union.
“Your brand, alone, is no longer good enough to sway your
members,” insisted Daley. “While your brand is still very important, it will no
longer be the key driver for interaction with consumers. We are seeing that
very clearly.”
A Common Mistake
What credit unions need to do, said Daley, is understand the
delivery channels their particular membership uses most and make sure they have
the capabilities to effectively work with members in those avenues.
But, he added, a common mistake made by many credit unions is an
over-confidence in the current digital offerings at a cost of not improving
with these channels.
“They have not had the branch footprint of the big banks and
even larger community banks, so credit unions have become good at e-delivery,”
said Daley, noting that comes with a big caveat–CUs must now excel at
cross-selling, marketing and targeting members via digital.
Those are the new skills many credit unions must develop, said
Daley, adding that services such as account transfer, bill pay and remote
deposit capture have become commoditized and are largely seen as table stakes
by consumers.
“We are moving away from a digital banking as a service-oriented
platform to a sales-oriented platform,” he said, saying that vendor selection
is critical.
Where to Look First
Daley said credit unions must not be complacent with their
current core provider and look outside, if necessary, for vendors that can
deliver the digital solutions that will integrate the credit union’s ancillary
services.
“So, LOS, digital account opening, for example,” said Daley, who
added that to determine what tools they need to compete comes from comparing
the credit union to the leading digital retailers in their markets. “You can’t
just look at yourself and what you don’t have. Don’t start with a functional
capabilities list of what your core system provides. Start with a list of what
your members can get from those who are the best at digital.”
Behind successful efforts to digitally market to members is
strong data analytics, said Daley.
“The credit union has to rely on its data so it can understand
its members’ needs and essentially market to a group of one,” he said.
“Reporting and analytics are huge today. Credit unions have to create accurate
member profiles.”
A Word of Caution
In choosing vendors, Daley cautioned CUs to beware of partnering
with fintechs “without the fin.” Daley advised CUs to pay attention to
providers that are not prepared to deliver an effective digital solution that
performs inside a highly regulated environment.
Daley stressed that with the shift to digital, credit unions
could lose one of the key aspects of their business that sets them apart from
banks—in-branch personal service.
“We need to extend the personal, face-to-face experience to the
digital space,” said Daley. “We can still take very good care of our members
and provide them good advice and offer them the white glove treatment remotely.
But that requires the analytics, the marketing capabilities and the fulfillment
capabilities so I can talk to members as a group of one. That is where credit
unions need to spend their time and efforts.”
By Ray Birch CU Times
