Exceeding Expectations: The Case for Transaction Migration in Credit Unions

Credit unions have historically served a critical role in their communities, offering more personalized and affordable services, but as banking preferences evolve and members migrate to a mix of banking channels, they will, too, need to evolve to promote more self-service options. By increasing digital adoption and remaining connected with their members in the channels that matter most, they can ensure they remain competitive in a quickly changing banking landscape.

According to internal Diebold Nixdorf data, self-service channel usage increased in 2022. However, many consumers are still using tellers to complete transactions that can be migrated to self-service channels. Transaction migration can help credit unions automate manual tasks that most consumers can do on their own, freeing time for tellers to build relationships with members face-to-face. While credit unions will still need to determine how to engage and deepen relationships with the small percentage of their member base who don’t visit the branch or interact with staff, the reality is that market research points toward a pent-up demand for more self-service options.

It’s critical for credit unions to strike a balance between automation and personalized engagement when migrating transactions from the teller to self-service devices. There will always be transactions that require teller intervention, especially for credit unions that rely on human connection with the community. Research conducted by Diebold Nixdorf further reinforces the pivotal role that human connections play in the customer journey and the need for excellent service. A recent survey found that 81% of consumers prefer to visit the teller at the branch if they encounter a friction point. The need for a great in-person experience is vital, as great customer service is consistently cited as the number one factor for customers when asked about what makes a positive banking experience.

However, many advanced transactions can be migrated to self-service channels to drive efficiencies. The ATM can take on a more prominent role and perform transactions like offering multiple denominations, onboarding, and accepting cash and check deposits to help credit unions transform into a more modern-day, contemporary banking center, where automation empowers tellers while enhancing members’ experiences. Our research shows that of consumers who deposit cash, only 10% have migrated all cash deposit transactions to the ATM.

A comprehensive transaction migration strategy is also crucial for credit unions looking to adapt to the evolving preferences and habits of younger generations. With the AI boom, digital banking craze and general conversions of cash usage declining, it might be shocking to learn that access to cash is still a major determining factor for consumers when considering where to bank. Analysis of transaction data, aggregated from various financial institutions in the U.S., found that amongst the three youngest generations (Gen XYZ), activity rates at the ATM are similar or higher than activity rates at the branch. The Gen XYZ segments accounted for about 55% of the customer bases from which the transaction data was sourced indicating a sizable portion of the current customer base is exhibiting a preference for the ATM channel. As Gen XYZ consumers replace older segments (like older baby boomers and members of the Silent Generation) we will see a greater preference and demand for self-service transactions, making it imperative that credit unions invest in the channel to retain members.

Proactive Steps for Future-Proofing Operations

A self-service strategy rooted in transaction migration allows credit unions to embrace innovative technologies that can enhance their offerings, improve member engagement and help to remain competitive in the evolving financial landscape. The integration of these technologies modernizes banking operations and creates more intuitive and seamless experiences for members, meeting their evolving expectations for convenience and accessibility – and allowing them to perform financial transactions how, when and where they want. Current trends and data dictate that transaction migration is a strategic move for credit unions to address operational efficiency and customer-centric objectives. This strategic shift toward transaction migration is not merely a response to industry trends but a proactive measure to future-proof operations and deliver enhanced value to members. In essence, it’s a pivotal step toward forging a more resilient, agile and member-focused banking ecosystem for the future.

Joe Myers is EVP, Global Banking at the North Canton, Ohio-based banking software and hardware firm Diebold Nixdorf.