How Credit Unions Are Moving The Consumer’s Basic Banking Needs Digital

The idea of offering digital services was hardly new to credit unions (CUs) before the pandemic, but the outbreak provided “the why” for going all-in, Dr. Kathy Snider, senior vice president and group leader of Engage products at CO-OP Financial Services, told PYMNTS.

She said the pandemic made the need for such services no longer theoretical or something to be pursued on an extended timeframe, but something that was suddenly pounding on CUs’ (now-closed) doors.

“Once we had that pain point of limited in-person contact, it really … got credit unions thinking and moving into action,” Snider said.

The pandemic got CUs further focusing on how to “get their customers digitally engaged — from onboarding through usage — and helping their members continue to live their day-to-day lives in a world that has changed.”

After all, while consumers’ lives have changed, their banking needs, in many ways, haven’t. Clients still need to manage their financial lives — paying the babysitter, buying groceries, giving graduation gifts and more. Snider said consumers have many such transaction needs, which is why CO-OP increasingly believes that payments innovation is the path to achieving a primary financial relationship with members.

“We believe credit unions should lean into the opportunity to adjust to the changing world — to continue to drive and sustain their members’ engagement by using payments as a lever,” she said. “Because no matter where members are in their life stage, [they require] a way to make payments to meet their lifestyle — their everyday needs.”

Tapping Into Touchless Payments Preferences

Consider consumers’ COVID-inspired interest in contactless payments. Touchless payments have been around for some time, but the pandemic has made them a critical safety feature for consumers who don’t want to physically interact with a terminal when it’s time to transact.

Snider said many consumers don’t want to touch a keypad or handle cash. Instead, consumers have indicated a strong preference for low-touch or no-touch systems. Snider said the degree to which CUs can enable that can build up how willing clients are to put a CU at the center of their financial lives.

That’s why the industry is “focusing on the idea of no-touch experiences,” she said. “Before COVID-19, we saw our credit unions adopting low- or no-touch [technology] simply because we know it meets people’s needs for a fast and easy experience. But now, that convenience of tapping into the members’ affinity for digital and using their phones also has that added safety element to it.”

But that doesn’t mean just adding a touchless payments option or two to the line-up. Snider said it’s a broader conversation that’s happening at CUs nationwide as they try to determine how to best serve the needs of a customer base that has migrated online incredibly quickly.

Members want to move their money whenever they want to whomever they want and be confident that it will get there safely and securely. That takes work on the CUs’ part.

“When you think about the payments ecosystem and the core and digital providers that are out there, whenever you introduce something new, there are a lot of players and interactions that have a hand in making that happen,” Snider said.

For example, she said CUs signing up for Zelle’s peer-to-peer (P2P) payments network are looking for ways to provide that capability quickly and efficiently into their overall digital service offering. As CUs strengthen and expand into Zelle, options like pre-integration provide a smooth path to enablement.

The Unpredictable Path Forward

There’s probably no going back in terms of digitization. Snider said consumers are no more likely to go back to doing things exactly the way they did in the pre-pandemic world than to completely revert to writing checks.

But she said CUs have seen the shift in what happens at their branches, how they provide services and how to respond and fine tune a digital strategy. They likely still have changes to make, and adding services like Zelle further enhance the member relationship.

However, Snider said, they’re not without guidance on their journey. Members’ experiences on any channel have always been the North Star that CUs use as guides. And in the era of rapidly changing preferences and widescale digitization, that’s more important than ever before.

“I think at the end of the day, it all gets back to the credit union movement and how credit unions understand their members,” Snider said. “They think about what [members] need. They want to provide services and stay connected to [clients] and do that quickly, easily and safely as possible. And it’s products like Zelle and other payments-related innovations that support the relationship between a credit union and their members.”

She said such efforts put CUs “in a position to drive that engagement to say: ‘Hey, I know what you need. I can help you with that.’ And that, to me, is what credit unions are all about.”