Video Banking Provides Safety Today, But Is it the Future for Credit Unions?

COVID-19 has had a serious impact on the industry over the past few months. Although credit unions are considered an essential service, and while many branch locations across the country were permitted to stay open, there has still been an immense need to adapt procedures in order to fully provide safety for staff and members.

The challenge for many credit unions is that people often choose to become members because of the personal relationship and cooperative perspective that credit unions provide. Typically, this is represented by face-to-face interactions and tailored support for members, but what happens when “social distancing” takes precedence?

How have credit unions adapted to maintain personalized support, while keeping everyone safe?

Luckily, video banking was an easy and effective solution at the fingertips of many credit unions. Video banking isn’t new and has been an emerging trend for the past few years, but it has struggled to really lift off as consumer adoption has been slow.

That said, COVID-19 has created a perfect storm for the rapid implementation of video banking by credit unions, and encouraged a sharp spike in user activity by members who see the immediate value of conducting transactions without the risk of physical interaction. The vast majority of in-person transactions can also be completed through video banking, which makes this an obvious choice for credit unions that still want to provide personal support for their members while respecting social distancing precautions.

Encouragingly, most members who have tried video banking have had a positive reaction and are likely to use it as a service again. In fact, University Credit Union saw an increase of 46% in video interactions within the first few weeks of quarantine lockdown, and there has been a moderate shift in activity from call centers to video banking support. Most members who use video banking become regular users and they are using it for a wide variety of transactions.

This appears to be an early, but positive, indicator of a trend within the industry and could signal what member support will look like in the near future.

Despite all of the positive benefits that credit unions provide for their members, they have always had to compete with larger financial institutions on one sticky issue – delivering face-to-face interactions through a large branch network. Larger financial institutions can have branch locations on every corner, while most credit unions cannot.

However, video banking is a technological solution that gives even the smallest credit unions the ability to compete with the largest financial institutions on any level of face-to-face interactions. Members can conduct all types of transactions from bank wires to loan inquiries through video banking without any sacrifice of the one-on-one personal support that most credit union members love.

Furthermore, this is really just a small leap that relies on technology that is already easily available to credit unions. The learning curve for members is relatively low and it truly appeals to the younger generation of members who already have a propensity toward tech-driven customer support. Considering that these members are the future of credit unions, and based on the trends of current member behavior, it really is not a stretch to anticipate even further widespread adoption of video banking.

In many ways, financial institutions have been slower than many industries in their digital evolution, but the situation created by COVID-19 has begun to accelerate this change. While the transition to video banking was an easy choice due to the circumstances, it does appear that these adaptations are likely to persist based on the positive reaction from members.

The pandemic and social distancing measures will not last forever, but the changes that credit unions make during these times in order to survive and provide better service to their members will definitely have a lasting effect on the industry.

David Tuyo is President/CEO for University Credit Union in Los Angeles.