RANCHO CUCAMONGA, Calif.–Big shifts in consumer behavior over the past two months are having short-term effects on how credit unions are responding, but it’s even more critical to recognize how strategies are going to need to shift in the longer term, according to one person.
“It’s time to boldly move with (changing consumer behavior),” Samantha Paxson, chief experience officer with CO-OP Financial Services, said in remarks to the company’s THINK20 Virtual event. “The winners are going to be the ones who are rapidly moving to transform themselves.
“In this time of COVID, where we are doing everything in a digital first, touchless manner, rapidly moving to transform is not going to cut it,” Paxson continued. “We need to get to our ‘next’ right now. (The THINK20 theme is ‘Activate Your Next.’) All these technology players are getting into the financial services space. Did they get in using lending? Or did you notice Apple and Facebook got in leading with payments? That’s because they understand what it means to be sticky in a member’s lifestyle. We need to be essential in the ways our members lead their lives every day. That’s how we activate our next now.”
A Consistent Theme
A consistent theme throughout the THINK20 Virtual event was how the coronavirus pandemic has accelerated certain trend lines and created immediate needs and opportunities, and Paxson said one great example of that is how consumers have turned to multiple providers to handle their finances, with no one overall picture readily available to them.
“The question now is, how do we serve the holistic needs of the financial consumer?” said Paxson. “Nobody does that today. The reason is the consumer is very, very comfortable cobbling together their financial life through a mobile device. The problem is that fragmented relationship leads to a fragmented understanding of how they are doing in their financial lives. And in a time of stress, that leads to even less understanding.”
Cornering the Market
What that means to credit unions, said Paxson, especially at a time when members aren’t walking into branches, is an opportunity to focus on every touchpoint to build engagement and trust.
“We have cornered that market,” Paxson said. “But what we also need is capability. That’s how consumers really test you: ‘Can you deliver what I need in my financial life?’”
To build that trust is going to mean departing from a long-time approach to serving and marketing to members, which is to build around life stages, such as a student loan, a marriage, a new home or retirement.
“Those stages happen over a period of years, but we need to build the engagement between those life stages in the day to day needs,” said Paxson.
A ‘Record Scratch’
Paxson, who referred to the coronavirus as the “record scratch of the year,” said it’s rare when a specific point in time can be cited for an abrupt change in consumer behavior. But the record scratched on March 11, 2020, said Paxson, when the World Health Organization declared the pandemic.
“People were in an air, water, and food moment,” said Paxson. “What is comforting is that we did not have to guess (at member behavior change). We could see the data in real time, which can help inform where you should be going. It has affected consumer confidence. (The data is) helping us to understand how they are going to need us.”
When Green Shoots Reappear
Where credit unions need to use that data to meet the challenge is in the shift in payments, Paxson said, noting that while there has been an overall reduction in spending, certain categories, such as groceries, have seen big increases.
CO-OP is also seeing a surge in contactless payments, Paxson added.
“I think we’ll start to see the green shoots come back as consumers start to feel more confident in their health and the fear of the virus starts to diminish,” said Paxson. “We have to just figure out how to help our consumers feel more confident, and how to demonstrate our empathy in this time.”