To Enhance the Member Experience, CUs Must Stop Investing in Point Solutions

Credit unions occupy a unique niche in the financial services industry – they are non-for-profit organizations with a mission to ensure the financial well-being of their members and the communities they serve. They have thrived by offering meaningful, personalized and high-touch experiences, which have allowed them to build lasting relationships with members. But their operating model traditionally has relied on their employees going above and beyond to serve with limited support from technology.

Two key factors have significantly challenged this operating model: First, the evolving community demographics in the U.S. and second, the impact of the pandemic. The overall makeup of communities across the U.S. is changing every day, the result of a myriad of factors, such as members moving to look for better quality of life and also due to the emergence of new economic hubs. This has blurred traditional community boundaries and changed member segmentation. Second, the impact of the pandemic is more obvious; the volume of physical interactions decreased. To counter, credit unions were forced to open up digital end points to support their members and accelerate their digital transformation timelines.

Short-term Fixes Creating Long-term Problems

Although credit unions took a lot of positive steps to mitigate the challenges thrown at them, including investing in technology and making member experience transformation a key part of their growth, the overall execution has left a lot to be desired. The approach has been to prioritize short-term fixes to enable capabilities without thinking about end-to-end member journeys. This assertion is supported by the market share captured over the last two years by credit unions offering point solutions, such as chatbots, live chats, SMS and co-browse capabilities.

While these investments helped credit unions handle the immediate pressures of meeting digital experience needs and handling the incoming interaction volumes due to the pandemic, they also created several long-term problems, such as fragmented member journeys, increased vendor dependency and overall inhibited innovation.

As an example, members today want a connected, cohesive and personalized experience no matter the channel of engagement. With siloed solutions not integrated with each other, the member experience breaks down and leads to a lot of frustration. Siloed chatbots are a perfect example. When a member has to repeat everything and start from scratch, it leads to both member and agent dissatisfaction, on top of making the overall process highly inefficient. A better way is a chatbot smart enough to understand the needs of the member and to escalate the interaction seamlessly – with context – to a live agent when appropriate. Another example of a problem created by technology silos is that the credit unions have become extremely dependent on multiple vendors to help drive innovation. Over time, this dependency becomes cost, time and resource prohibitive for credit unions that want to embark on any member experience innovation initiatives.

There are several reasons these silos get created in the credit union ecosystem. First, with varying investment priorities and limited IT budgets, taking on large integration projects are not feasible both from a time and cost perspective. Second, a majority of credit unions do not boast of large IT teams with the talent or resources to build and manage these integrations. These silos, therefore, become an inhibitor for credit unions to bring any innovation into member experience to support future business growth.

Unified Member Experience Platforms Destroy Technology Silos

A recent survey by Cornerstone Advisors showed that 81% of credit unions consider improving the member experience to be their top priority. Modern member experience platforms offer credit unions an opportunity to rethink their current approaches of investing in point solutions. A “unified automation first” platform purpose-built to support their needs allows credit unions to future-proof their investments in the long term. While evaluating member experience platforms, credit unions should keep the following key considerations in mind:

• Is the platform cloud native and can it support open architecture?
• Does the platform have industry specificity built in and can it support credit union use cases?
• Does the platform offer all channels of communication natively, which allow them to seamlessly support a member journey across multiple channels?
• Is AI infused throughout the platform and does it elevate both member and agent experiences?
• Does the platform come pre-integrated with core banking and CRM platforms, which are key to enabling the member and agent experience?
• Is the provider committed to innovation and does it offer a white glove post-implementation experience?

Platforms and providers that can ace this evaluation offer the best long-lasting strategic partnerships to credit unions, which set them up for future success. By investing in a modern purpose-built solution, credit unions not only can accelerate time-to-value, but also focus on their core missions, to ensure the financial well-being of their members and communities.

Credit Unions Must Address Declining Member Satisfaction

Credit unions historically have had a higher rate of satisfaction among their members than banks have had among customers. But credit union satisfaction rates have declined from 91.7% in 2017 to 86.3% in 2021, according to a survey by PYMNTS and PSCU. Meanwhile, the customer satisfaction rates of digital/online banks climbed to 84.8% in 2021 and threaten to surpass credit unions in a few years.

Asked to cite the most important reason for being satisfied with their primary financial institution, “a greater share of non-credit union members listed factors like convenience, ease of use and transaction speed. Credit union members were more likely to cite their trust in the FI or cheaper fees,” Insider Intelligence wrote.

Enabling convenient, contextual and personalized experiences is the way credit unions will remain relevant in an increasingly competitive industry and allow them to compete with fintechs and banks. A modern and unified experience platform easy to implement and maintain will play a critical role in the ability of credit unions to delight, retain and attract members. It is high time credit unions stopped making investments in point solutions that create technology silos and deliver poor member experiences.

Rahul Kumar is the senior director of industry strategy for financial services at Talkdesk, a San Francisco-based call center software provider.