How CUs Can Optimize the Digital Member Journey Across All Stages

While member-centricity has long been a key differentiator for credit unions, in today’s increasingly crowded financial services environment, establishing competitive advantage has become more challenging. Shifting consumer demand toward an easier and more efficient online banking experience has created a new set of challenges for credit unions, especially as big banks have adopted and integrated digital solutions that enable a more personal customer experience.

Credit unions still have a unique advantage, but those that do not embrace digitization risk falling behind. Paired with the member-centric, community-based services they are known for, credit unions can continue to stay competitive by leveraging and investing in digital transformation to optimize each touchpoint of the digital member journey, from acquisition through account management.

Leverage Prescreen Solutions to Expand – and Better Understand – Your Audience

The first step toward improving the digital member journey begins before consumers become members, starting with expanding potential audiences. Leveraging alternative data can help credit unions further expand access to credit. This in turn can unlock opportunities for even more growth potential, while providing opportunities to potential members that may have otherwise been overlooked.

According to Equifax data, over 91.5 million consumers have thin credit files or are credit invisible, and even in tough economic times, nearly 20% of subprime consumers are financially durable. In other words, despite what their credit shows, these consumers may still be financially stable, with the income needed to consistently pay their utilities on time, for example. This group presents an untapped market of potentially attractive new members.

To really understand a consumer’s ability to pay, credit unions should examine more than one data point, and alternative data sources are opening the door to a whole new market of qualified prospects. Layering alternative data, such as income and employment data, into credit decisioning can help credit unions more accurately assess a consumer’s ability to pay and in turn, realize audiences eligible for new or better offers. By implementing solutions that leverage alternative data to verify and paint a complete financial picture of potential members, credit unions can discover new audiences to help grow their member base.

Once credit unions have expanded their potential member base, how can they ensure they are still targeting the right consumers? Prescreen solutions can help cut through the vast audience of potential members by using data to identify prospects that are most likely to respond to new offers. By tapping into market-leading credit files, third-party data and analytics, providers can identify predictive elements that help calculate a consumer’s member-attractiveness. Working with a partner that provides such data-driven insights can help credit unions strategically segment consumer groups for more tailored offers, confidently make pre-approved offers and drive increased lifetime value for new accounts.

By making the right offer to the right member at the right time, credit unions that make investments now in prescreen solutions can help cut down on wasted time and resources that could better be used elsewhere, while also growing share of wallet by targeting potentially profitable members. As credit unions look to foster growth, they can benefit by adopting digital prescreen solutions that help expand their potential audience – and focus on the right targets – to maintain their identity as a member-centric lender.

Optimize Each Member Interaction Through Segmentation

Once new audiences have been identified, credit unions can optimize the member journey from day one by leveraging segmentation to determine how – and when – to make initial contact with prospective members. With the help of a third-party vendor that provides data-driven insights and solutions, they can segment potential audiences to realize new opportunities – and develop messaging and offerings better tailored to new and existing members’ needs.

Tapping into data-driven insights through segmentation can also help credit unions understand how members prefer to invest, uncover hidden asset opportunities and spot members with the growth potential ideal for premium service channels or cross-sell offers, enabling them to build on relationship potential from day one. In a recent Equifax case study, for example, a regional bank leveraged segmentation to develop better relationships with new customers by optimizing their prospecting campaign to reduce the target audience by 90% and identify an audience of high-asset consumers with 500% more deposit opportunity.

To fully optimize each member interaction, credit unions can take segmentation a step further by investing in complementary products, such as wealth and economic insights suites, marketing insights and acquisition email solutions to launch effective campaigns that engage segmented audiences on the channels that reach them. If a credit union aims to identify and reach younger audiences likely to develop into profitable, long-term members, segmentation can enable targeted campaigns that more quickly and efficiently convert those prospects through the platforms they prefer.

Maintain Member Trust and Manage Risk to Drive Retention

As digital banking service offerings for members are adopted, credit unions need to ensure they are also implementing solutions to help mitigate fraud and reduce risk to members. Credit unions can more quickly and efficiently verify the legitimacy of a consumer’s identity by working with a partner that uses multidimensional data sources, such as phone number, address, email and mobile device verification. Adopting configurable identity data and solutions can help spot and negate unlawful activity stemming from factors like synthetic ID fraud, account takeover and transaction fraud, helping foster member trust by addressing all the ever-evolving ways fraudsters attack.

When it comes to improving the digital member journey and driving retention, credit unions can also benefit from continually assessing their portfolios to manage risk. By leveraging third-party portfolio monitoring and managing solutions to recognize which accounts are performing well, identify at-risk accounts and enable services for customers at risk of non-payment, credit unions can proactively manage the risk associated with existing accounts and more quickly mitigate losses.

Above all, as credit unions embrace technology to drive member growth and meet shifting consumer demands, they need to be mindful that they are still maintaining the member trust, service and engagement that differentiates them in the first place.

Aaron Long is Vice President, Financial Services, Credit Union Division for Equifax based in Atlanta.