Turning the Tide on Lagging Digital Experiences

Credit unions’ secret sauce has long been their emphasis on the relational, rather than simply the transactional. For years, this emphasis has manifested most commonly in their personable, in-branch member service.

But it’s no secret that the future of financial services is digital and that the number of branches is dwindling. So as credit unions continue to consider what strategies are essential if they are to remain competitive in the market, they must embrace new technologies that enable them to deliver their secret sauce to members at scale and continue to play a key role in helping their communities thrive.

Some innovative credit unions have already positioned themselves to meet this challenge, securing the technological infrastructure needed to provide uniquely tailored advice and direction for their existing and prospect members. At other credit unions, however, enhancing digital capabilities was not a priority prior to the pandemic and, when COVID hit, they found themselves quickly falling behind. Whether your credit union is looking to continue a culture of innovation or transform the existing culture into one that can help it pull even with competitors, 2022 will be pivotal.

Data from Finalytics.ai’s recent report on the digital experience at the top 50 credit unions uncovered a series of gaps and challenges impacting credit unions and their digital strategies. The team at Finalytics.ai uncovered the following gaps and areas for improvement:

• Although an increasing amount of consumers are expecting their financial institutions to provide personalized experiences tailored to their unique needs, the report found that only 14% of credit unions exhibited some level of personalization. In order to deliver timely, relevant offers and financial advice to their members, it is crucial that more credit unions apply a high level of personalization by leveraging emerging technologies like machine learning.
• Only 34% of the credit unions surveyed had highly customized analytics, applying a combination of Google Analytics, ad tracking and retargeting tracking. Those that leverage analytics are able to gain a complete understanding of user behavior, guiding improvements to the member experience as well as existing processes.
• The majority of credit union websites did not cross-sell products anywhere within the digital experience and only a handful of credit unions provided members with a holistic view of how their products can serve them in their financial journeys. When members engage with their credit unions through digital channels, any gap between their expectations and the digital experience offered can erode loyalty over time, causing many members to abandon their credit unions for mega banks, fintechs and digital-only banks.
• More than 60% of credit unions referred to their member segments within the navigation of their website (e.g., personal, business, commercial). The rest organized their websites around products, reflecting a product-focused experience that isn’t necessarily centered around members or their specific needs. Credit unions should offer each prospect or member products that they are actually interested in and will help their financial wellness. This can be done by engaging with them based on their previous behavior and patterns, rather than offering them products and services that are not tailored to their needs and irrelevant.

As members migrate away from the branch to be digital-first, credit unions are battling to retain members by offering them the level of innovation and sophistication they expect. When considering how best to meet these challenges, many credit unions see the value of emerging technology. Yet too often they lack the resources, capabilities and time to implement this technology to the benefit of their members. Meanwhile, new competitive forces are emerging, leading members to compare the digital experiences at their credit unions with what is offered by Big Tech and fintechs. In this context, credit unions must select partners that can provide the technology that is needed to transform digital experiences in a fashion that captures the best of the credit union franchise.

How Can Technology Help?

Technology partners that use AI, and in particular machine learning, can help credit unions develop a sophisticated level of intelligence that anticipates members’ needs from the first time they visit the credit union’s web page as a prospect. By using real-time data and analytics around consumer profiles and previous online activity and behavior, these emerging technologies can provide credit unions with a level of insight on both existing and prospective members that surpasses the information they previously gathered from face-to-face conversations in a branch.

Armed with this data, credit unions can provide unique, segment-of-one digital experiences to each member and cross-sell only relevant products and services designed to financially empower their communities. These experiences will go beyond the personalization members previously received in-branch and will ultimately improve retention, drive new member acquisition and increase wallet share, while helping the institution differentiate itself from the competition.

The challenges credit unions are facing also present a unique and timely opportunity to continue strengthening communities across the U.S. by providing digital experiences that eclipse those of mainstream banks. But first, they must acknowledge these challenges that are holding them back and identify solutions to fill in the gaps and catch up with the competition. Much of the technology being introduced by innovative vendors today is more accessible, less disruptive and does not require credit unions to invest in resource expertise. Credit unions must look to partner smartly with these new technology providers to migrate their secret sauce from the branch to their digital channels. If they do, the credit unions will continue to stand for the member – demonstrating they care for the member just as much in the digital channel as in the branch. In many cases, the future of the credit union itself hinges on getting this right.

Craig McLaughlin is Co-founder and CEO of Finalytics.ai, a San Mateo, Calif.-based provider of a customer-centric data platform for credit unions.