LAS VEGAS–In a financial landscape in which fintechs are nibbling around the edges in some cases and taking big bites of credit unions’ traditional marketshare in others, one person offered some encouragement here for how credit unions can respond. But it’s going to take some work.
“I want you to be fired up. You can grow, You can compete,” Samantha Paxson told the Underground Collision meeting here. “We are in a period of tremendous opportunity and the reason is you center everything you do on the member. I’m going to argue that your P&L is going to be centered around your member. It will tell you where credit unions are going to be in the next five years.”
Paxson, chief experience officer with Co-op Solutions, reviewed how the CUSO’s focus has pivoted over the last five years, moving from a model in which credit unions interacted with members every five to seven years at various life stages to being in “every moment.”
Moreover, Paxson said the company’s focus on PFI has transitioned, as well, away from the traditional concept of primary financial institution to instead being a primary financial interaction.
Moment by Moment by Moment
“You have to meet that member moment by moment by moment,” Paxson said. “Something we say at Co-op is, ‘Make every moment matter.’ The incredibly empowered consumer has the ability to download the fintech app use-case by use-case by use-case, which slowly disintermediates your member from you. So, how to you win walletshare moment by moment? You have to define the credit union by life stage and by lifestyle.”
As CUToday.info has reported and as Paxson noted, Co-op has conducted significant consumer research that has revealed the importance of “value bundles” and of using data to understand how members behave in their daily financial lives.
“Use that to inform what’s on your product roadmap and how that roadmap should go together, to understand this is where the market is going,” advised Paxson. “The big, big winners are focusing on becoming an ecosystem of value. How do I personalize my solutions sets in order to engage that member in every moment? We look at demographics, but we need to look at behavior and then design the credit union around that.”
Who’s Most ‘Trusted?’ It’s Not CUs
Paxson pointed to Co-op research it has conducted in conjunction with EY that shows members are choosing PayPal because it’s the most “trusted” relationship they have.
“They aren’t choosing PayPal because it’s the best deal around,” said Paxson.
So, how does a credit union create that “sophisticated, needs-based” system of value?
Paxson cited previous remarks she has offered and that CUToday.info has reported in which Co-op Solutions believes “payments are the path to growth.”
“It is how your members are engaging with you, how they are behaving. When you understand how they are behaving, you can help them create a better outcome in financial wellbeing,” said Paxson.
‘Slowly Fading’ Away
When credit unions don’t create that outcome and that relationship, the member begins “slowly, slowly fading away,” she cautioned.
“We need to be the center of their financial lives. We need to be centered on an audience of one. We need a credit union built for them. You build the credit union based on you,” Paxson stated. “Your value proposition isn’t to be the best deal in town, it’s to build the best financial outcome for members. Build a personalized, curated experience for each member. You are going to lean into payments. Members should get their liquidity from you. You are the good guys. You are going to do the right thing for them. Our members trust us to do the right thing. Do they trust us to have the capability to do it?”
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