Letting Digital Drive Young Member Adoption

The importance of digital banking has accelerated in the past 15 months. According to research from BAI, 62% of millennials and 61% of Generation Z indicated “they would switch their primary account for a better digital experience” in 2020, an increase from 47% and 54% respectively in 2019. This demonstrates how the COVID-19 pandemic fueled a push toward digital adoption that would have otherwise taken three to five years to achieve. Members began using these tools to bank, and now have become accustomed to them – even preferring them – to the traditional branch in some cases.

Digital banking will remain vital for credit union leaders for the foreseeable future. We know millennials and Generation Z are digital natives. As leaders work to develop digital strategies, these groups must remain top-of-mind. To do that, credit unions must understand all elements of a true digital banking experience – including the role of communications and the impact of a well-built digital member experience for a credit union’s long-term viability. By keeping that in mind, credit unions will maintain a digital-first banking experience post-COVID.

Building Digital Strategy for a Post-COVID Environment

The need for digital banking strategy in the credit union industry was apparent prior to the COVID-19 pandemic. Credit union leaders were faced with a membership, particularly those members who identify as millennial or Generation Z, who were growing accustomed to digital experiences fostered by big tech companies such as Amazon, Google and Apple. Credit unions face the challenge of bringing this highly branded and intuitive degree of service to their members.

A well-planned digital banking strategy incorporates the appropriate member data to understand and support members who have individualized needs. It also uses the data stored in the core to create a personalized banking experience for the member. Add to this the ability for the credit union to engage members with their existing value points, and this creates the foundation for a true digital banking member experience.

Once in place, credit unions must focus on communication channels a member may use. Often the focus of this work centers on channels such as mobile, app and web while communications such as statements and notices are overlooked. Statement communications, unlike other channels, are federally required to be sent by the credit union and create 12 annual, natural touch points for the credit union to engage the member.

Incorporating Communications in a Credit Union’s Digital Strategy

A member’s experience must be consistent across the credit union. When communications on the digital platform look unsophisticated and lack consistency in design, it leaves a bad impression with the member. The online site must be responsive and mobile-friendly, enabling the member to bank on-the-go.

This can be done through a few steps. One key step is to guarantee preferences and settings are centralized in one place. Areas such as entitlement management, passwords, authorizations and verifications are prime for this. Remember, members are unaware that numerous third-party vendors are involved in making their digital experience a reality. When members change or update their settings, they expect these changes to occur across their account in real-time. Any delay or latency results in an inconsistent experience for the member.

Members cite short archival retention periods as a reason for electing to continue to receive paper statements. Communications archival is one of the most beneficial — yet overlooked advantages — for digital communications. Members may or may not refer to previous communications such as notices and statements regularly, but when they need them, they will appreciate the capability. Credit unions are not always able to pay for the server space needed to store these past communications, but if it is possible, it is a key area executives should consider.

The Appeal to Digital for Member Retention and Growth

Credit union leaders are looking to create digital strategies that not only satisfy existing members but attract new members. Digital communications can be a pivot tool for this member growth. According to Pew Research’s citation of U.S. Census data, millennials have surpassed baby boomers as the nation’s largest living adult generation. This group is approximately 25 to 40 years of age and grew up in a time when technology became the mainstay that it is today. Generation Z is also coming of age. The eldest of this group are approximately 24 years of age and entering the workforce. This group grew up not knowing a time before digital. What does this mean for credit union leaders? It means the largest proportion of new member prospects are digital-first.

Griffin McGahey is President of HC3, an Irondale, Ala.-based firm providing document design, marketing and user experience services to financial institutions.