Digital Push Leads to Lifts in Lending, Engagement

Heading into March 2020, many credit unions had already begun prioritizing the adoption of digital and self-service banking tools, and COVID-19 only accelerated their efforts. Now, 16 months after the initial pandemic lockdowns forced digital banking access into the critical-to-have category, credit unions are using the momentum of digital as a widely-accepted imperative to introduce new and easier ways for members to interact with them remotely.

Adapting and Picking Up Speed

Credit unions that made significant investments in digital pre-pandemic were happy they did once the world began to shut down – and were positioned to take their digital offerings up a notch at a time when members needed them the most.

The $1.9 billion Allegacy Federal Credit Union in Winston-Salem, N.C., which serves approximately 162,000 members, entered the pandemic with plans for a core conversion (or as Allegacy’s staff prefers to call it, a “core enhancement”). Despite the chaos that transpired in March 2020, the credit union’s leaders decided to move forward with the enhancement that went live Memorial Day weekend 2020 and brought more advanced capabilities to online and mobile banking users.

These included enabling members to make a same-day loan payment from an account outside of Allegacy, which benefitted indirect members and reduced call center volume; keeping credit card account information within the online banking platform instead of taking credit card holders to an external website to view their transactions; and adding enhanced functionality to its business online banking platform, explained Assistant Vice ­President of Digital Banking Treva Loyd. Allegacy has over 3,700 business members.

In addition, through online banking platform provider NCR’s integration of a mobile marketing solution from Dublin-based software company Pulsate, Allegacy introduced location-based messaging for members. In one example, Allegacy used the tool to promote its interactive teller machines (ITMs), alerting members when they were physically close to one via a push notification to their mobile phone.

“We had recognized the importance of digital prior to the pandemic, with the e-commerce companies and obviously the tech giants elevating the bar for what’s expected in the digital experience,” Allegacy EVP/Chief Operating and Digital Officer Ashley Kohlrus said. “We knew our members were expecting that ease of use, personalization, speed and convenience. And then of course the pandemic hit, which accelerated the pace of putting those digital transformation experiences into place and making sure we were there for our members.”

Out West, the $1.7 billion, Lakewood, Wash.-based Harborstone Credit Union had already begun working with CuneXus, a provider of an automated consumer lending platform to credit unions and community banks, pre-pandemic to streamline the loan application process for members. With CuneXus’s platform, members can see a list of loans they are pre-approved for, as determined by data within the core system, and obtain the loan in less than 30 seconds digitally, bypassing the application process. In April 2020, Harborstone ran a three-month pilot program with CuneXus, which began as a promotional campaign for the lending platform through email, direct mail and messaging within online banking.

A key benefit of the platform, CuneXus SVP Barry Kirby emphasized, is that it allows credit unions to guarantee credit to specific members, avoiding the deflating experience of being rejected for a loan after the member has been invited to apply as part of a typical preapproval campaign. “Sending [invitations to apply] to more people might yield more business on the books, but if it’s sabotaging the member experience in the process, then your long-term value proposition for your membership base is very thin,” he said.

The latter portion of Harborstone and CuneXus’s pilot involved using geofencing to send targeted messages to members inviting them to accept preapproved loan offers (like Allegacy, they leveraged Pulsate’s solution to execute the campaign). Members who enter a home improvement store, for example, might receive a push notification on their mobile phone stating that they’re preapproved for a loan to fund their home improvement project; they can then click on the message to accept the offer. The experience is similar for members visiting an auto dealership, where after perusing a lot for 10 ­minutes, they may receive a clickable notification from Harborstone on their phone that reads, “Shopping for a car? You’re preapproved.”

“Our main objective was to show up for our members where they were, and help them through the financial impact of the pandemic,” Ken Bloomfield, Harborstone’s vice president of marketing and member experience – digital, said. “That said, if you’re just reaching out to members and marketing to them in a traditional way, when the environment shifts so significantly, finding those who really need a lending message is a tough thing to do. But the CuneXus-Pulsate connection helped us find them at a relevant time and place for their lending needs.”

In Michigan, Warren Pattison, head of digital innovation and emerging technology for the $3.4 billion, St. Joseph-based United Federal Credit Union, was thankful to have several digital tools implemented that brought convenience to members’ lives when the pandemic hit. In 2019, UFCU rolled out an appointment-setting tool that members took advantage of during the early months of the pandemic to schedule phone appointments when branches were closed, as well as in-branch meetings when they re-opened by appointment only. In February 2020, it overhauled its online onboarding process, creating a mobile-friendly version of the new account opening section of its website that eliminated the number of steps new members had to take to open an account and reduced the time it took from about 40 minutes to around two and a half minutes, Pattison said.

UFCU also enhanced its online chat tools, which saw a surge in traffic at the beginning of the­ ­pandemic. Pattison explained that the credit union was already communicating with members through various channels such as text and Facebook Messenger, and just before the pandemic, it implemented a simple FAQ bot that could answer common questions about routing numbers, hours and locations. Then, just a few months ago, it introduced the capability to answer more personalized, transactional inquiries through the bot.

Digital as One Link in a Chain

With credit unions still valuing in-branch, in-person interactions, digital is not their be-all, end-all member service channel. But to create a high-quality experience for members, credit unions are taking steps to ensure members have the freedom to select their preferred channel and the flexibility to hop between channels seamlessly.

To help frontline staff better understand Allegacy’s digital technology and its value, the credit union launched Digital Ambassador, an internal training program that centers around how the physical channel complements the digital banking platform to create a common experience, and prepares frontline employees to educate members who visit the branch on which transactions can also be completed online or on mobile, Kohlrus explained. “Digital first does not mean we are looking to be digital only, as members want a blend of human interaction and technology,” she said. “We want our teammates and our technology to do what each does best and work together to best support our total member experience.”

At UFCU, staff ensures a streamlined experience for members as they move between different channels by recording “member stories” into the credit union’s customer relationship management system. The member stories provide background on an account holder’s activities, so an employee will know if a member recently used the mobile app during a system outage or experienced a duplicated transaction, for example, as they’re assisting the member.

“If a member was having an issue trying to transfer money on the mobile app and they’re going into a branch, it’s more helpful for frontline staff to know that through our CRM systems, versus treating every experience like it’s brand new,” Pattison said. “We want to be able to facilitate, and have that information available so that we’re providing solutions instead of creating an additional problem, or taking up more of the member’s time that they don’t have.”

Recording Results

Now that credit unions are over a year into the pandemic-induced shift to digital as an imperative, they’ve begun sharing results in the categories of loan volume, deposit account openings and member engagement.

From year-end 2019 to year-end 2020, Allegacy said it saw a 44% increase in its interactive chat volume. The credit union, which offers a live agent chat service during normal business hours through its website and online and mobile banking platforms, also saw an 11% rise in the number of mobile app users and a 9% lift in digital banking transactions over the same time period. Loyd noted digital banking activity remains strong among members, as many of them tried the channel for the first time when they were at home at the beginning of the pandemic.

“A lot of people who maybe didn’t use digital before realized ease of use, and so they’re continuing to use it,” she said. “So while we’re not seeing that big jump [currently] that we saw before, we’re continuing to see elevated usage of those services.”

UFCU experienced an 80% increase in online deposit account openings, a 66% uptick in online loan account openings and a 264% spike in the volume of members utilizing online chat in 2020 compared to 2019. Pattison said the growth can be attributed to three key factors: The need for digital access during the early days of the pandemic, increased demand for loans due to lower rates and the rollout of UFCU’s mobile-first account opening process.

“We’re definitely seeing some stickiness with members who are not only using our mobile app, but a mobile web browser to access us through online banking,” he said, noting that some members dislike apps for a variety of reasons including their frequent updates but embrace mobile web browsers.

Harborstone’s push of preapproved loans to members via digital channels also led to a rise in loan activity at the credit union, and Bloomfield shared that what he found most interesting about the results of its pilot with CuneXus was its ability to reach newer and younger members. In the second quarter of 2020, loans grew by 9% among members aged 26-35, fell by 9% among members over 55 and increased by 5% among members who have been with Harborstone for less than 10 years.

Bloomfield noted that Harborstone’s vision, which centers around humanizing the digital experience, communicating relevancy to members and providing seamless transitions between channels, was sped up as opposed to changed by the pandemic. And while it experienced an acceleration of digital and some shifting priorities, the credit union’s primary purpose has remained the same. “At the end of the day, we’re going to show up where our members are and help them achieve financial empowerment,” he said.