Credit union members are increasingly placing emphasis on self-services like mobile and online banking for their seamlessness and convenience. And while many CUs are undergoing extensive changes to meet this demand, they face challenges in keeping members’ data private and secure. In this month’s Credit Union Tracker, CFO Steve O’Donnell for One Nevada Credit Union discusses how the CU revamped its core system to offer these self-services while ensuring member privacy.
Online and mobile banking’s increasing popularity has driven many credit unions (CUs) to embrace self-service models, emphasizing ATMs, digital banking and other remote services, and reducing physical branches’ importance.
These changes are prompting even CUs that have existed for decades to undertake the most significant overhauls in their histories.
One CU undergoing a self-service transformation is One Nevada Credit Union, which serves 80,000 members and has $959 million in assets. Nine local Air Force base employees founded the CU in 1950, and its modest roots are a far cry from the technologically advanced focus it has taken in recent years.
“I think we’ve been on the leading edge of getting away from the traditional branch-and-teller model and going more to an automated service model for our membership so that we can get away from the transactional-based stuff,” said Steve O’Donnell, executive vice president and chief financial officer at One Nevada. “[Members] can handle that on their own. We can deal with the deeper, tougher questions and issues surrounding their financial lives.”
The shift to automated services has not been without its challenges — including employee education and member privacy — but it has provided One Nevada and other CUs implementing similar models with improved transaction efficiency and better views of members’ financial lifestyles.
Helping Themselves to Banking Services
One Nevada is instituting a product suite to support its self-service transformation, including a data warehouse, business intelligence tools and a complete core banking conversion. O’Donnell noted that the CU is shifting toward self-service for two reasons.
“If we migrated [members] away from the teller line and got them used to using remote services like ATMs and online banking, they can do that at their whim 24/7, and they didn’t need us to be open,” he explained. “[Making this change] also helped us reduce significant overhead as we started to shift from a brick-and-mortar model to an online services model, [especially after we] have both of those ramped up to the fullest extent.”
The new system gathers card usage statistics, account access objectives and other data points the CU can leverage to offer members targeted marketing products. This gives One Nevada a more holistic view of its members’ financial lifestyles, but the CU stated that it does not want the system to infringe on their privacy.
“What we witnessed in some of this outreach and these conversations is our members want us to know that the credit union understands what they need and how we’re going to help guide their financial lives,” O’Donnell explained. “They have strong loyalty and trust [in] us. I don’t think that we’ve had too many instances or circumstances of us knowing things about our members that make them feel [we’re being] a little creepy.”
Privacy was not the only issue One Nevada faced on its road to self-service, however — it also had to ensure that its members understood such services’ value.
Self-Service Brings its Share of Challenges
Education was the largest challenge in transitioning to a self-service model, O’Donnell explained. One Nevada needed to make sure its staff understood the model’s benefits so they could explain the new business plan’s advantages to members.
“When you get that culture change and that mentality shift to where we’re educating the membership and teaching them about these tools, it means our staff needs to be up to speed on all of that stuff as well,” he explained. “If there’s any issues or roadblocks to using that technology, our employee base can help our membership through those issues.”
Some of One Nevada’s members pushed back against the initiative at first, with many questioning the self-service-forward banking systems’ efficacy. The CU thus spent considerable resources on its educational outreach, even sending executive staff to branches to personally address issues and answer questions.
“We spent a lot of time on training,” O’Donnell said. “If you look us up, we’re [in the] top 100 in the country in terms of training for institutions. It’s been a strong point of helping develop our culture and then making sure that our membership is getting the best that they can out of our technologies.”
Being in the top ranks for CU education is not enough to ensure success, however. Members’ expectations are changing rapidly as digital banking self-service becomes ubiquitous, but these financial institutions are not alone in catering to customers’ needs.
Achieving the Self-Service Dream
Partnering with other CUs and FinTechs is key to understanding members’ needs and developing the latest technology to meet them, O’Donnell said. These challenges affect the entire financial industry, not just CUs.
“Everybody’s working to this end right now, especially with how FinTechs have gotten into the space,” he noted. “We used to think of FinTechs as a threat, and now we’re seeing them as more of an opportunity. Credit unions need to realize that, going forward, member expectations are changing rapidly, but we also have the opportunity to drive some of those future expectations by implementing some technology.”
One Nevada’s leadership has taken steps to educate staff and members about its self-service innovations and thus reshape their expectations as the initiative becomes more developed. Transformations such as One Nevada’s can be challenging for both CU staff and members, however, and will require careful planning and education to achieve success.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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