Optimizing the Member Experience in Today’s Digital-First World

Arguably, one of the largest transformations driven by the pandemic has been the adoption of digital experiences. Just about every business and industry has been affected by this shift, including financial institutions. This is especially true for credit unions, which have historically been recognized and applauded for having great in-person, “hands-on” interactions with their members.

This shift to digital has fundamentally changed consumer needs and expectations. According to Experian’s latest Global Insights Report (September/October 2021), consumers reported that they are online 25% more than just a year ago. Quick, streamlined processes are now the norm and have come to be expected by consumers. This shift is negatively impacting credit unions because they tend to have resource constraints and limited technology.

To  thrive in a digital-first world, credit unions must conduct internal audits and invest in cost-effective platforms to adapt to changing market and member demands. By integrating the right digital technology and automation, credit unions can improve credit risk management while providing an optimal member experience.

Conduct an Internal Review

Today’s credit landscape is more complex than ever and consumers may not be as loyal to companies as they once were. The Experian report found that loyalty to online businesses is waning as consumers begin to spend again. In fact, only 61% of consumers said they’re loyal to businesses they used prior to the COVID-19 pandemic, a decrease of 6 percentage points since last year.

What does this mean for credit unions? As the digital landscape continues to evolve and member loyalty wanes, credit unions have to change too. Credit unions should first do an internal review to understand what’s working, what can be improved and what tools are needed to remain competitive. External partners can help conduct these reviews and provide an outside perspective on ways to automate and help identify the right investments.

In our digital-first world, a vital outcome of this audit is to understand if a credit union’s current technology provides a frictionless member experience. This can be an indicator of future growth as member loyalty is key to the credit union experience and value proposition.

Optimize the Digital Member Experience

According to the Experian report, consumers rank their online priorities as security (82%), privacy (77%) and convenience (74%). This shows that members want online experiences that are seamless and safe.

Decisioning and fraud prevention platforms, which are now available on the cloud, address some of the obstacles credit unions face, like manual processes and resource constraints. Solving these issues is important for a credit union to deliver fast, secure decisions that are personalized to its members. The Experian report found that businesses have increased confidence in on-demand, cloud-based credit risk decisioning trending up from 72% to 81%. By integrating these solutions, credit unions can provide an online experience that can rapidly meet high volumes of members with different needs, while building a solid foundation of trust and loyalty.

These platforms can also help credit unions remain competitive by offering real-time credit decisions that harness the power of data, attributes and scores. This enables a frictionless user experience that takes members through a prequalification process while also verifying the consumer’s identity to mitigate risk for the credit union and its members. This gives members the ability to understand in real-time what type of credit is available without impacting their overall credit score. But credit unions are also benefiting from the improved lending experience. In fact, some credit unions are seeing a 26% increase in booking rates immediately after implementing these cloud-based real-time decisioning platforms, in addition to a 25% reduction in manual reviews.

The lending environment today is vastly different from our pre-pandemic world and will likely look different a year from now too. Integrated platforms can provide data-driven insights that empower credit unions to get to market much quicker and prepare for future growth. As businesses and consumers continue to get back on their feet, this will make a significant impact for credit unions looking to grow their membership and mitigate risk.

Gavin Harding is a Senior Consultant at Experian Decision Analytics, North America.