Leveraging Compliance to Improve Member Experience

The U.S. financial industry is one of the most regulated in the world and continues to evolve in ways that places new demands on industry players as well as state, federal and global regulators. Adapting to the many changes in technology and consumer preferences is challenging for financial institutions regardless of their size or resources, and many credit unions feel the strain of managing complex compliance processes while maintaining excellent member service with limited staff.

This is especially true for smaller, neighborhood institutions that often offer vital financial services to otherwise underserved communities. Their strategic initiatives may overlook compliance and the operational lift that can be achieved through its modernization – and it’s understandable. When something does not look broken, there’s no reason to think it needs to be fixed. A compliance program that is merely compliant, however, is not delivering value to either credit unions or their members. Labor intensive, manual compliance processes place constant burdens and stress on employees. Old-school compliance or doc prep solutions typically require duplicate data entry and run the risk of exposing members’ Personally Identifiable Information to data breach risks.

These traditional methods not only create difficulties for credit unions, but for their account holders as well. Financial institutions have invested in digitizing everyday banking tasks like depositing checks or viewing statements and account balances, but most still fail to consider the document package as part of the member experience. Consumers may start online transactions seamlessly, but once they encounter the documentation and compliance phase of the process, they are thrust back into dated, branch-based paradigms that assume compliance content is splintered into multiple 8.5 x 11” documents. The modern digital experience becomes an exercise in pinching, scrolling and clicking through dozens of separate pages. It’s awkward and inconvenient, and it makes it harder for members to read and make sense of the credit union’s policies, especially on mobile devices.

And problems for members naturally become problems for the credit unions who seek to serve them. Disruptions to the digital experience can lead members to abandon the account opening or loan application process and cause them to look elsewhere for service. Credit unions should seek to address issues hindering the delivery of compliance during the final stage of a transaction.

Lack of mobility: According to 2021 data published by Statistica, more than 43% of U.S. mobile banking users switched their primary financial institution because they were unhappy with their mobile banking offering. Compliance content needs to be designed for mobility – not to fit pages coming off the branch printer. If consumers are pinching, zooming, squinting and reorienting their device to process and comprehend the legal engagement, the institution is failing the last mile test. As consumers continue to fulfill their banking needs from the palm of their hand, speed and mobility, or ease of use on a mobile device, have become as critical as any product a credit union offers. To remain competitive in the market, they must reduce the friction consumers experience when opening accounts through digital channels.

Confusion and clutter: Mobile apps should be designed to speak the language of the consumer with a direct, user-friendly interface. Compliance documentation has to be held to the same standard. Credit unions should have the same objective for minimizing clicks in compliance content as they do when designing the other steps in their digital banking workflow.

Obstruction to financial journey: Compliance content provides an ideal means to extend and strengthen member connections. For instance, adverse action content can satisfy regulatory compliance with regard to the denial of credit while also promoting other loan products that might be an appropriate fit for the consumer’s credit profile. Guidance on how consumers can improve their credit scores could also be provided. Credit unions who consider the end-user’s needs first and invest in technology that meets consumer demand will reinforce trust and deepen those relationships.

Disintermediation: Consumers are seeing an ongoing convergence of buying and borrowing. Retailers have helped speed that convergence along with store-branded credit cards and retailer financing, and they continue to innovate in this space. This leads to missed opportunities for credit unions every time a member selects a different source for borrowing and financing. Retailers like Amazon that have simplified transactions, simplified the purchase experience, and built for mobile first have changed consumer expectations for the purchase and borrowing experience. Credit unions need to look for fintech partners that can help them maintain visibility as a financing resource throughout the purchase experience.

Increasing demand for digital engagement is providing many financial institutions with opportunities to rethink their technology stacks. Each component should be evaluated for its potential to address multiple business needs and provide important data management safeguards for members’ personal data. Compliance can provide credit unions with an opportunity to deliver a more complete, simplified, user-friendly experience while at the same time improving the speed and efficiency of their own operations.

Carrie Goodman is Director of Financial Institution Management, Compliance Systems, a Grand Rapids, Mich.-based compliance documentation and technology company serving the financial services industry.