Extreme Makeover: Six in 10 Credit Unions Adding Digital Options to Branches

Not unlike the “all of the above” answer on a multiple-choice test, when it comes to credit unions (CUs) deciding between investing in new digital tools or spending to keep branches well-staffed, the answer is increasingly both.

Whether they’re looking to attract new members or build sticky relationships with existing ones, getting the right interactions in place at the right time, with the right technologies, is key.

In a recent interview with PYMNTS, Jeremiah Lotz, managing VP of digital and data at PSCU, a credit union service organization (CUSO), said that a good example of wanting it all is when a customer who is buying a house may appreciate both a digital experience and a personal approach.

See more: Credit Unions Need Digital Innovation to Attract and Retain ‘The Next Generation’

Having a digital conduit could cut down on the need for physical documentation, such as pay stubs and tax returns, he explained, while the personal approach is likely to be preferred when the customer wants to learn how their decisions may impact their long-term finances.

Human Touch, Digital Convenience

Lotz suggested that credit unions meet the customer’s needs by combining digital and human-touch elements in the branch setting. By offering a range of online and offline experiences, he said, CUs will be equipped to appeal to younger consumers. “The incentive is there to refresh the pipeline for the next generations.”

PYMNTS recently reported that while four out of five U.S. bank account holders will be making use of digital banking tools on a monthly basis by 2024, most consumers still express the desire to live 15 minutes or less from physical branches of their chosen financial institutions.

See also: PYMNTS Credit Union Tracker

The study outlined how credit unions must plan their brick-and-mortar banking strategies to meet the shifting needs of their members.

Offering Self-Service Options

Before the pandemic, two-thirds of consumers said they were more comfortable making cash withdrawals or depositing checks inside branches as opposed to doing so online. However, this changed rapidly during the pandemic. Today, as many as 70 percent of deposits at surveyed FIs are being conducted using self-service options instead of with help from tellers.

In response, financial institutions are adjusting their customer service strategies at physical branches. Ninety-seven percent of FIs are planning to redesign their branches to meet changing customer needs.

Delivering Personalized Banking Experiences

Credit union members also place a premium on personalized banking experiences across all channels. Forty-three percent of individuals who did not renew their CU memberships in 2020 did so because of a lack of engagement with the institution. Members who were engaged, on the other hand, spent 22% more on average than disengaged members.

To offer an engaging and personalized experience, credit unions are placing self-service solutions in the forefront of the physical branch experience. This provides the convenience and speed consumers find appealing when banking digitally.

Building Out Digital Offerings

Credit union decision-makers are already aware of the starring role digital technologies will play in the future of banking. PYMNTS reported that approximately two out of three credit union executives agree that they will need to build out their digital offerings to stay “economically viable” by 2023, and 57 percent note that adoption of such tools for improving the branche experience was on their innovation roadmap.

Putting Themselves in the Customer’s Shoes

Traditional financial institutions must be ever cognizant of how they want the consumer journey to look, Lotz told PYMNTS.

“It takes some time to understand that customer journey, but then you can put yourself in the shoes of that member, and you can start to realize where something might not be perfect — or have another idea about ways in which you want that member to experience your credit union.”