How Well Do You Know Your Members?

Know Your Customer (KYC) is often perceived as solely a compliance issue, where financial institutions require a lot of information from a potential customer or member to verify their identity before an account can be activated. However, KYC goes far beyond compliance.

Credit unions allocate significant portions of their budgets for attracting and retaining members, but to successfully maintain those member relationships, credit unions must deeply know them and understand their distinct needs at every stage of the relationship. This results in a better experience, which makes it easier to retain the members that credit unions work so hard to attract.

But, have credit unions’ efforts to meet heightened consumer expectations actually made it harder to know their members and deliver a top-notch experience?

Understanding Member Needs

In recent years, many financial institutions, including credit unions, have gradually approached digital transformation, where new digital banking products are implemented on a case by case basis. For instance, as demand grows for a mobile check deposit feature, a credit union might assess solutions from various providers and then select a solution to implement. This approach is often repeated for other solutions and services, eventually resulting in an assortment of channel-specific products, vendors and back-end systems to manage. This makes it incredibly challenging for credit unions to gain a complete, accurate view of their members and their current needs.

To truly know their members and establish longstanding relationships with them, credit unions must rethink their approach to digital. While credit unions have always strived to keep their members’ best interests at heart, this can be difficult to achieve without a complete understanding of their needs. Fortunately, the intel necessary to deeply understand members’ financial needs and challenges is at credit unions’ fingertips – it’s just a matter of gaining access to it.

More Digital Interactions Means More Intel

According to PwC’s 2017 Digital Banking Consumer Survey, 46% of consumers only use digital channels today. Of these channels, there are more ways than ever for members to engage with their credit union, including mobile, online, and even wearable technologies and smart assistants. With the landslide of digital interactions comes more ways to track and analyze member activities, providing greater insight into their needs and preferences.

However, to obtain that insight, credit unions must first gain greater visibility of their members across channels through a single back-end system. By doing so, institutions can access aggregated member data, regardless of the channel or device used, to obtain more accurate and comprehensive intel, strengthening their understanding of their target member. This is also valuable for individuals who have a business and retail account with their credit union. With a unified back-end, a credit union can connect those dots and deliver the services that best help the member accomplish both their personal and business financial goals.

Provide More Meaningful Products and Services

Analyzing member data from a single source, rather than via individual channels, enables credit unions to uncover patterns in past account holder behavior to predict future behavior, and identify the next service that will deliver the most value to members. This also makes it possible to make those next-best product offerings via the right channel at the right time. For example, a member may regularly deposit checks at the ATM without realizing their mobile banking app has remote deposit capture capabilities. The credit union can recognize this and engage the member by educating them on their mobile deposit feature, further strengthening that relationship.

Additionally, credit unions can better understand the member journey and therefore the member’s unique banking needs. With today’s digital banking technology, data can be analyzed to result in a click-by-click workflow of the member’s interaction with the credit union’s digital channels. By doing so, the credit union can quickly identify problems in their system and help remediate user errors. For example, a credit union may recognize that a large proportion of members start an application for a savings account on their mobile device but have to visit a branch to finish the process. With greater visibility across channels, the credit union can identify this trend and investigate to find out why, so if there’s a pain point in the process, it can be resolved immediately.

What About the Branch?

Lastly, the branch is far from dead. According to the aforementioned PwC survey, 62% of respondents felt it was important for their financial institution to have local branches. With a holistic view of the member and their past digital interactions, credit unions can also enhance the level of service provided in the branch. For example, beacon technologies can identify who a member is, along with their recent financial activity, as soon as they enter a branch. As a result, credit union employees can greet that member by name and understand the context of their visit to provide the highest-quality service.

Approximately 75% of interactions between an account holder and their financial institution occur through a digital channel, according to Accenture. This means it is more important than ever for today’s credit unions to offer a consistent and frictionless digital experience through the entire relationship, which hinges on how well the credit union knows its members. Credit unions that understand this will also be in a better position to elevate the branch experience, further strengthening member relationships.

Abhishek Veeraghanta is Head of Digital Initiatives for VSoft. He can be reached at abhishek.veeraghanta@vsoftcorp.com.