Laying the Foundation for Digital Success

Consumers are becoming more and more comfortable with making purchases digitally, both online and with their phones. The trend is evident when you look at consumer spending data from the 2017 holiday shopping season. Like other high-spend periods, the holiday period amplifies spending behavior changes that indicate a growing trend, and statistics from this past year point to a persistent and emerging gravitation toward e-commerce and away from traditional merchants.

The Power of Online Spending

Spending patterns from 2017 show a clear preference for digital:

• Mobile sales grew in 2017 by a chart-topping 34%;
• Card-not-present transactions accounted for more than 30% of total spend during the 2017 holiday shopping season; and
• Brick-and-mortar sales stalled over the holidays, posting an anemic 2.5% increase in 2017, versus 8% in 2016.

Shifts in Consumer Behavior

Beyond statistics, consumers are exhibiting notable shifts in behavior:

• The convenience and speed of digital spending continues to win over consumers, despite widely publicized data breaches and other privacy concerns.
• As streamlined transactions require fewer and fewer clicks to complete, consumers are reporting greater confidence and trust in using both their debit and credit cards to conduct online transactions.
• Consumers continue to research purchases online, but worries about deliveries or returns no longer drive them to visit a physical store location to complete their purchases.
• Millennials may have been the early adopters, but now all demographics have posted impressive increases in their digital spending.

Economies of Scale

If the numbers do not make it obvious enough that now is the time for credit unions to focus on digital, consider this: Big banks are investing billions in the digital channel. The main question then becomes: How can credit unions deliver great and memorable digital experiences to their members, affordably?

Many credit unions are partnering with CUSOs. Take mobile wallets as an example: The Apple companies of the world don’t want to work with thousands of different credit unions. They want to partner with CUSOs that have the expertise and economies of scale to help them implement cutting-edge mobile technologies.

Expertise and Innovation

Here is a quick glimpse at three ways in which CUSOs can help credit unions bring innovation to digital:

• Contactless transactions – Cards embedded with antennas that allow users to tap and go, instead of inserting or swiping, are already a major success overseas. For instance, nearly 90% of transactions in Australia right now are contactless. As the industry moves toward a virtual environment, CUSOs are working with Visa, Mastercard and others to ensure widespread adoption of contactless transactions in the U.S.
• Integrated financial information – With systems being more open for integration today, credit unions must find ways to create more convenient member experiences. By pioneering new ways to integrate financial information seamlessly into digital channel products, CUSOs can empower credit unions to rethink how they differentiate themselves through information sharing.
• Customized mobile portals and apps – CUSOs must continue adding new functionalities to their online and mobile applications, so owner credit unions have the ability to fully customize their members’ mobile experiences.

Blueprint for Success

Working with a trusted CUSO means credit unions can focus their resources on delivering better member experiences, while relying on their CUSO partners to support them by investing in new and progressive technologies behind the scenes. A trusted partner should stand at the ready to provide not only the blueprint, but also the tools, for credit union success.

Chuck Fagan is President/CEO for PSCU. He can be reached at 727-299-2504 or cfagan@pscu.com.