By Ray Birch
RANCHO-CUCAMONGA, Calif.—When it comes to serving members best, it’s not so much about paying attention to life stages anymore. Instead, it is about lifestyles.
It’s an important point credit unions need to be paying attention to, especially as the pandemic fast-tracks changes in consumer behavior, according to the President and CEO of CO-OP Financial Services.
Todd Clark spoke with CUToday.info about the challenges with service credit unions are now facing, especially as CUs have slipped below banks in at least one consumer satisfaction survey for two years in a row.
As CUToday.info reported, credit unions were rated below banks when it comes to consumer satisfaction, they also now sit at a “historic low” in one respected national survey.
Credit unions fell 2.5% to a score of 77 on a 100-point scale in the 2020 American Consumer Satisfaction Index (ACSI) conducted by the University of Michigan in conjunction with the American Society for Quality in Milwaukee and CFI Group in Ann Arbor, Mich. The nation’s banks achieved a score of 78.
“For the second year in a row banks have bested credit unions in the annual American Customer Satisfaction Index survey,” reminded Clark. “With the full support of our board we are investing and building fast to give credit unions the solutions and technology development needed to meet the expectations of today’s members. This is our task as a credit union service organization. This effort has been thoroughly planned and budgeted for so that CO-OP can provide long-term value to all our clients and the credit union movement as a whole.”
Issue Must Be Addressed
The issue is one that needs to be fully addressed by the industry, Clark believes.
“A lot has been happening over the last five years,” emphasized Clark, noting how aggressively the major banks have been investing in digital delivery. “And you have the neobanks that are digital only. They’re going after the everyday moments in their customers’ lives. And that’s what credit unions need to do—don’t just think about the life stages of your members, think about their lifestyles.”
Todd Clark
Clark said one needs look no further than the last year during the pandemic to witness the significant changes taking place in consumers’ lifestyles.
“For example, I haven't needed a new mortgage loan in the last 12 months or new car loan as we all hunker down during this crisis,” said Clark. “But what I do need is banking services and I need those services to work all the time. At CO-OP we're encouraging credit unions to operate on all fronts.”
Clark said credit unions need to be investing in enhanced digital offerings that make their members’ lives easier. As CUToday.info has reported, the definition of service is quickly changing in the minds of consumers as they see digital, speed and efficiency being more important than a friendly or familiar face.
Transparency & Control
“Give your members more transparency and control over the services they use from you; much more personalized services,” recommended Clark. “Reward them based on their lifestyle, not just on a single rewards card, but custom-tailor your rewards offerings.”
Over the last three to four years, Clark said CO-OP has been investing heavily in the CO-OP ecosystem to help credit unions achieve those goals.
“We have introduced our new API portal and a brand new COOPER fraud score system, which personalizes fraud prevention to an individual member’s behavior,” he explained. “We're no longer
throwing you into categories and saying you look like a green card member or gold card member, or just relying on neural network categories. We’re using true machine learning to look at the individual. While my wife and I carry the same color card, we're very different spenders, for example. What would look like fraud on my card is just a normal business habit for my wife and vice versa. We have to think about the individual cardholder and tailor our solutions to each member.”
Getting Personal
Clark emphasized credit unions must find ways to use digital to get personal with their members.
“And it’s not just getting personal with the traditional mortgage refi or student loan products,” said Clark. “Every day there are hundreds of thousands of cards being used. There are hundreds of thousands of payment transactions happening every second in this country. We need to be thinking about how we serve members every single second of the day. That's what companies like Chime and SoFi are doing. They are doing it in a truly digital format. These incredibly powerful devices we carry in our pockets are just going to give us more and more opportunities to connect with our members.”
Clark noted how consumers have become much less patient with the time it takes to conduct digital transactions of all types, including financial services.
“I tell this story a lot,” said Clark. “I travel a great deal each year. I take Uber everywhere I go. When I get back to the Atlanta airport, there’s always Uber cars available. But this one time I could not find one for about two-and-a-half minutes. So, I just downloaded the Lyft app and got a car because they could get one to me faster. That’s how a lot of consumers think about their banking transactions. I’m older now; think about how less patient a 25-year-old is. That's what's happening with the definition of service these days and all of us need to be paying attention.”
Investing in Partnerships
But to stay current with digital delivery requires an investment in technology that is not inexpensive, said Clark. It also means partnering with fintechs.
“CUSOs, like CO-OP, can help,” said Clark, adding CO-OP, in addition to the services it now offers, will introduce new solutions in 2021 to make credit unions more competitive. He also said the company is working on fintech partnerships.
“We're going to be we're investing heavily in the fintech partnership idea,” said Clark.