What Financial Consumers Actually Want

Since the Great Recession, financial institutions around the world have fought relentlessly to regain consumers’ loyalty, confidence and respect. While institutions have made inroads in building back their credibility, they have consistently struggled to identify and communicate consumers’ needs. According to a Cisco survey, “Forty-three percent of U.S. customers believe their primary bank does not understand their needs.” Unfortunately, the financial industry will face further consumer-facing challenges for the foreseeable future. For example, according to an EY report, banks are “facing increased competition from a range of new market entrants, offering high-touch and high-tech branch services.” Additionally, McKinsey & Company reported, financial institutions have “a stiff challenge to differentiate their offerings while reducing cost[s] and complexity for customers – and to do it at a profit.”

So, how exactly can credit unions overcome these mounting obstacles? Give financial consumers what they actually want!

Trust

Over the past decade, trust in banks has failed to reach pre-recession levels. This failure of trust can be attributed to issues ranging from the disclosure of fees and charges to serious concerns about financial institutions’ cybersecurity. Ernst & Young’s Global Consumer Banking Survey determined that a mere 32% of global consumers “have complete trust that their primary financial services provider … is providing full transparency about fees and charges.” Credit unions can begin remedying this negative perception by further instituting full and absolute transparency of prices and fees, as well as clear and comprehensible terms and conditions.

While complete transparency of pricing and fees is an essential element to gaining and maintaining members’ trust, studies have found an even more important factor: Data security.   Accenture’s Global Distribution & Marketing Consumer Study discovered that the “biggest driver of loyalty for banking customers is the ability to trust their bank in protecting their personal data.” Furthermore, the study found that 53% of respondents were more likely to stay with a financial institution when they had “confidence their personal data [would] be secure.” Clearly, credit unions have to ensure they are communicating to members the comprehensive safety measures being taken to protect their financial and personal data.

By implementing the above measures, credit unions will make significant strides in solidifying and bolstering existing members’ trust in their institution as well as creating a trustworthy foundation from which to attract new, long-term members.

Convenience

Since 1909, U.S. credit unions have shown a distinct proclivity toward providing their members with the latest and greatest innovations. Cutting-edge technologies, such as digital and mobile banking, have exponentially increased members’ ability to access and manage their finances – 24 hours a day, seven days a week. As these technologies have continually improved, financial consumers have begun demanding for more traditional in-branch services to become digitized.

For example, Oracle’s Financial Services Global Retail Banking Survey discovered that “86% [of consumers] want to make payments and transfers via digital channels … 62% [of consumers] want to take up their home loan or mortgage via digital channels … [and] 60% [of consumers] want to open a bank account online.” Undoubtedly, institutions cannot ignore the digital revolution that is underway within the financial industry. Credit unions must continue their unwavering commitment to investing in emerging technological innovations that provide members with a simple, seamless and convenient financial experience.

Advice

As financial systems have grown increasingly complex, consumers have struggled to grasp the ever-changing market landscape. Nevertheless, consumers are crying out for help. According to J.D. Power’s 2018 Retail Banking Advice Study, “Seventy-eight percent of U.S. retail bank customers say they are interested in receiving financial advice or guidance from their bank.” The same study also found that only 28% of U.S. retail bank customers “can recall recently receiving any type of financial advice [from their bank].” This is unconscionable not only for the due diligence owed to consumers, but also for the substantial gravity and weight consumers place on obtaining such advice. In fact, a consumer survey conducted by CGI Group found that 56% of respondents would switch financial institutions if they provided “wealth-building advice.” Fortunately, many credit unions are uniquely positioned to give members the personalized advice and guidance necessary to solve financial issues and thrive in the 21st century economy.

As competition continues to grow within the industry, credit unions must continue evolving to meet the dynamic financial demands of their member bases. Through an uncompromising member-first mentality, credit unions will remain the benchmark for fulfilling consumers’ needs.

Jami Jennings is Director, Digital Channels at EPL, Inc. She can be reached at 205-408-5300 or jami.jennings@epl.net.