SANTA ROSA, Calif.—One analyst cautions that a rush to make more products and services available online can be a mistake, resulting in wasted efforts, without first understanding members’ habits and needs around mobile and in-person transactions.
Karan Bhalla, managing director at data analytics firm IQR Consulting, emphasized that credit unions can’t afford to ignore—or even fail to prioritize—the digital banking experience.
“This is especially true for those cooperatives focused on acquiring a younger member base,” said Bhalla. “However, jumping in head first can lead to disjointed decisions that aren’t aligned with the expectations of members and prospects. Data analysis can point credit union leaders in the right direction, indicating which products and services must be online and which can wait.”
Bhalla stated that more credit unions are expressing interest in exploring the value of in-person transactions in a more data-driven way.
“Everyone’s talking about consumer patterns and how they indicate a strong preference for digital experiences—whether they’re buying a dress for prom or opening a checking account. Rather than simply accepting this as truth, credit unions should take a look at their members’ transaction data. What they find may be surprising,” said Bhalla.
Data Scientists
Bhalla explained that IQR data scientists recently dug into the transaction patterns of a credit card issuing client, and was caught off-guard by what they learned about in-person transactions.
“We weren’t exactly shocked to find a confirmation of increased online shopping,” Bhalla said. “What did surprise us, however, was a pretty wide variance among the retailers we examined. For instance, we saw dramatic year-over-year increases in the number of online purchases made at Nordstrom. Online purchases made at Saks Fifth Avenue and Bloomingdales, however, remained steady, with no spike in activity. Notably, these particular brands are well known for their ability to create highly engaging in-store experiences.”
Karan Bhalla
So as more consumers look to open accounts, manage loans, apply for credit cards and more online, there may be a tendency to assume the branch no longer has a place in people’s financial lives, cautioned Bhalla.
“But is that necessarily the case? What does the data tell us about the in-person banking experiences consumers still value?”
Upward Trajectory
When IQR’s team looked at this particular issuer’s digital banking trends, they found upward trajectories in every category—from online checking account to online money market account origination.
“Here again, though, we found a less-dramatic increase in online savings account openings,” said Bhalla. “Perhaps this is an indication consumers prefer to start a savings account with cash. Maybe it means the savings account is one of the first products opened and more new members want face time before going digital. Again, jumping in head first to digital can lead to disjointed decisions that aren’t aligned with the expectations of members.”