Many consumers are seeking digital solutions to help them tackle their daily needs from home as the COVID-19 pandemic continues to grip the nation. The financial services sector in particular has witnessed enormous shifts, with consumers tapping mobile banking apps and online services like never before. This mass digital migration is prompting many financial institutions (FIs) to leverage technologies that can bring their members seamless service without requiring in-person interactions.
Credit unions as well as other FIs are working to roll out digital solutions that can meet members’ unique needs during the pandemic, and their approaches to doing so vary. Some are working to launch their own offerings while others are tapping third-party providers to help give their members the seamless and secure capabilities they require to tackle various banking tasks remotely.
The following Deep Dive examines how credit unions are leaning on personalized financial services to meet consumers who are banking remotely during the pandemic as well as the challenges they face when implementing their own solutions or turning to outside providers to achieve their goals.
Using Personalization To Meet Members’ Needs During The Pandemic
The COVID-19 pandemic has made supporting the financial well-being of members a key issue for credit unions. A recent poll revealed that CU members are taking bigger financial hits than most Americans, with 76 percent saying they have experienced a significant amount of financial disruption compared to the national average of 70 percent. CUs can offer crucial resources and security to help their members weather the health crisis, but the survey found that those who are experiencing the most disruption from the pandemic are also the least likely to say their credit unions are helping them stay afloat financially.
Many credit unions are working hard to help their members during the pandemic by pivoting to digital innovations that can help customers manage their personal banking needs without heading to branches. CommunityAmerica Credit Union, which has 32 branches in Greater Kansas, is aiming to offer digital tools that can rival even those of big banks. The CU, which is the official wealth management partner of the NFL’s Kansas City Chiefs, is banking on enabling personalized approaches by providing financial advisers who can remotely guide members in making decisions on investments, college savings and retirement planning.
Minnesota-based Firefly Credit Union is meanwhile allowing its customers to access a card management platform with numerous features, all of which can be customized to suit their specific needs. The platform enables members to turn their Firefly credit or debit cards on or off at will and receive instant smartphone notifications when they are used. It can also notify them when their cards are utilized at specific merchants and locations or when transaction amounts exceed set limits.
Florida-based PSCU also said that it is essential to meet customers’ demands for self-service mobile and online card management channels that enable them to manage their financial accounts in real time. The credit union service organization said it enables its CUs to give members several digital self-service options to monitor their credit and debit accounts and stay informed about account activities. Its suite of card management solutions aims to help members monitor and manage their credit card accounts, loyalty program statuses and prepaid cards.
Hurdles To Tailoring The Member Experience
Research shows that CUs’ and credit union service organizations’ efforts are not in vain. A recent study found credit union members’ most sought-after features include integrated products for one-stop shopping as well as seamless sign-up for checking accounts, home and car loans and insurance. CU members are also willing to share their personal data in exchange for discounts, and many value personalized services based on their spending habits. CUs often have access to the data that can provide a window on members’ financial needs, but the study noted that many continue to promote offers on their homepages for products or services that members already have, costing them opportunities to provide innovative services that foster engagement and boost conversions.
Tailoring marketing materials to consumers’ specific needs carries enormous market potential for CUs. One digital strategies provider recently noted that CUs and banks that present consumers with customized products and services on their websites have conversion rates that are three to eight times greater than those promoting standard offerings. New Hampshire-based digital marketing software company Episerver revealed that 25 percent of shoppers are more likely to be repeat customers when their experiences are personalized.
Another factor at play is that while almost three-quarters of communications with FIs are now digital, a large share of CUs have failed to invest in online and mobile tools or have been slow to do so. This can hinder their ability to connect with consumers, especially younger customers who typically prefer banking via apps and leveraging digital payment networks.
Credit unions have long been known for their customer service-focused approaches, which have enabled them to retain members and meet their financial needs in person and digitally. There is evidence, however, that innovating by offering more advanced digital technologies and solutions — especially those that cater to CU members’ unique and varied needs — can help CUs compete with other FIs during the pandemic and after it ends. Launching the right solutions or forging partnerships with providers that can enable them is critical to CUs’ continued success to quickly deploy new products and services.