Editor’s Note: This column was written in response to a challenge by CUToday.info’s Frank J. Diekmann that members of Filene’s i3 group and other CU organizations lead the charge and help reverse the three year decline by credit unions, which have fallen bedhind banks in the annual American Customer Satisfaction Index.
By Shanda R. Reaves
Credit unions pride themselves on a high level of service, satisfaction, and face-to-face interactions. But has the idea been considered that as a whole, members may no longer equate good service to face-to-face interactions as much as credit unions think they do?
Recent surveys from the American Consumer Satisfaction Index have shown that credit unions are falling behind in member satisfaction. This is not because credit unions are lacking in the quality of service, but because the needs and expectations of members have shifted. Due to the pandemic, members value their time doing more meaningful things and, thanks to Amazon, members expect more variety and a quick turnaround time.
In order for credit unions to be sustainable there must be a shift in the mindset of credit union leaders. Credit union leaders must be proactive at looking at trends and investing money into solutions that will create longevity. Credit unions should passionately seek the best new innovative opportunities, even if they are non-traditional and execute these initiatives with enormous discipline. This is easier said than done, because face-to-face interactions and community is the bedrock of what credit unions are based on.
The Answer is Attainable
Nevertheless, the answer appears to be attainable.
Credit unions should consider:
- Shifting their focus from brick-and-mortar locations. The presence of a credit union should no longer be based on the newest or newly renovated branch but rather on the newest most innovative services and solutions that provide ease of use in the digital setting. Credit unions should focus more on their digital footprint.
- Credit unions should also consider reallocating the annual budget to improve digital solutions and find new ways to offer efficiencies. Some examples of the initial improvements credit unions could consider making are outlined below.
Members should be able to complete 90% of their financial transactions online. A credit union’s online and mobile banking platform along with its website should be an extension of the credit union. These solutions should be robust, reliable, user-friendly, and aesthetically pleasing.
For the transactions that cannot be completed in online or mobile banking that may require a credit union team member, members should be able to utilize another digital solution, such as video banking. Video banking is a great platform that will allow members to not only have the traditional face-to-face interactions but allows the member to have this interaction from the comfort of their own homes. If used properly, members will be able to do things such as account maintenance, receive financial advice from a financial advisor, apply for a new mortgage, even begin retirement planning among a host of other things.
A Digital Storefront
Credit unions should also consider investing in a digital storefront solution. A digital storefront could optimize the member’s digital experience and allow the credit union to offer a personalized curated suite of products and services for the member. A digital storefront could be the perfect platform for the credit union to showcase new alternative offerings such as medical credit cards, low-interest payday loans, etc. This would not only illustrate to members that the credit union understands all of their needs, but save the member time since they would not have to shop around for products. This will also ensure the credit union is the member’s first choice for all of their financial needs with a click of a button.
Lastly, this will also solidify member retention since the credit union will be the home of many of the member’s accounts and “sticky” products.
Due to the times we are currently in, a credit union’s new mission should be to anticipate the member’s needs. This requires an investment in different types of solutions. One new solution credit unions may find value in exploring is debt management. A debt management solution allows the member to understand all of their debts and prioritize on-time payments that will allow the member to get out of debt quickly.
Cumbersome & Lengthy
Over the years many credit unions have garnered complex processes that are cumbersome and lengthy. Credit unions should invest in revising or eliminating processes that have no value or are no longer needed. Revision of processes will not only allow credit unions to efficiently streamline procedures but ensure member-facing activities can be completed within two to four clicks. Every touchpoint a member has with the credit union whether it is digital or in the branches should be easy and able to be completed within minutes.
Get Younger
Finally, credit unions should consider revamping their leadership team to bring in younger viewpoints and perspectives. Many members of the Board and Executive team are higher in age with similar backgrounds and may be confined to an outdated method of approaching problems. A more balanced diverse team of both older and younger leaders with multiple experiences and backgrounds may ensure credit unions are forward-thinking while maintaining their fundamental values.
Credit unions should also leverage the feedback from their frontline team members. Since frontline team members such as tellers interact with members on a daily basis, they are one of the best resources to leverage when making future decisions. Members are not shy when it comes to sharing their likes, dislikes, and experiences with other competitors. Frontline team members are equipped to share this feedback and more than likely have a viable solution. Frontline team members can also provide insight into the cumbersome processes that may need to be revised or eliminated.
A Financial Renaissance
In closing, as an industry credit unions need to work together and share data on trends they are seeing that are working and efforts that have not garnered any results. Credit unions should also increase their tolerance for risk and explore new, unconventional solutions. As hard as it may be, credit union leaders should realize that what has worked for the past 100 years may not be the way of the future. Thanks to technology, we are in the middle of a financial Renaissance that will permanently change how consumers engage with their financial institutions.
Shanda R. Reaves is a project manager with Chartway Credit Union in Virginia and a member of Filene’s i3 program.
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