In today’s post-pandemic world, what members want from your credit union has changed dramatically. It’s time to go after, “Activating Your Strategic Next.”
In CO-OP’s recent THINK Virtual Master Class, CO-OP thought leaders teamed up with consultants from EY to share three steps every credit union can take to identify and capture the most promising growth opportunities within their membership.
- With the migration toward digital, credit union offerings must consider trust, ecosystems and consumption.
Credit unions today should be moving toward a more dynamic trust framework that better serves members by delivering on their functional, ethical and emotional expectations.
Consider also that artificial intelligence-enabled financial ecosystems are converging, presenting opportunities for credit unions to consolidate services and more holistically nurture the financial wellbeing of members.
In this environment, consumption is an important concept for credit unions to embrace. What that means is this – Rather than focusing on bringing new products to market, credit unions might reframe their approach in terms of offering “the next subscription model,” one that unbundles products as they are currently offered and delivers more personalized, needs-based experiences and propositions to members.
- Keep your member top of mind when making strategic shifts at your credit union.
To create personalized, holistic services for members, credit unions need to invest in relevant core capabilities. This means first determining what is relevant to members by assessing their lifestyles and life stages at a more granular level.
Factors to consider include wealth tiers, age ranges and member attitudes toward earning, saving, spending, investing, borrowing and security. These characteristics can then become the basis for new member segments that reflect specific personas.
To help credit unions begin to think about their strategic next, CO-OP offered credit unions nationwide access to the Credit Union Strategic Investment Assessment Powered by CO-OP and backed by EY NextWave™. The assessment delivered results that identified opportunities within 11 primary member segments.
For example, the Starting Out segment includes members ages 18 to 34 who are just beginning their adult lives. This segment is further divided into two wealth tiers that typically reflect the financial status of younger members: mass market and mass affluent. Based on credit union input, Starting Out members also share these common characteristics:
- digital payments are integrated into every aspect of their everyday lives
- they have a propensity to move to a singular online payments platform
- they are new to financial wellness and value educational tools and guidance
- it is important for them to make progress toward their goals
By contrast, the Retirement member segment includes those ages 65 and older and is divided into three wealth tiers: mass market, mass affluent and high net worth. These individuals are characterized by a very different set of values:
- the importance of a human connection to uncomplicate financial services
- preference for a consolidated financial services experience that is handled by a single firm
- assurance that they can financially maintain their current lifestyle
Segmenting members in a more dimensional way allows credit unions to design and deliver more contextualized experiences for them – and deepen member trust as a result.
- Follow the “Wedge” approach – aligning products, features, services and capabilities to create a value proposition for the member segment.
Once member segments are established, credit unions should employ what is called the “Wedge” method, a strategy that identifies critical life events for members and targets use cases with the greatest growth potential.
For example, because the Starting Out mass affluent member segment statistically includes a high number of recent college graduates living with student debt, the ability to refinance their student loans is key to their financial wellness.
Credit unions are uniquely well positioned for this opportunity as they are able to capture the best rates. They are also viewed by members as more welcoming and service-oriented than big banks – so members seek out their recommendations more often.
By guiding their younger members through the refinancing process, credit unions can both help them achieve their life goals (important to Starting Out members) and deepen their trust.
Meeting Members Where They Are
Ultimately, serving members well starts with knowing them well. As credit unions better understand the nuances in member needs and expectations, they can build broader, more personalized financial wellness offerings that meet members where they are.
Members benefit by receiving a more impactful, personalized credit union experience, and credit unions can more easily – and effectively – grow member relationships across the many demographics they are called to serve.
CO-OP is hosting a series of free virtual events throughout the year designed to help credit unions activate their next. Don’t miss our upcoming CO-OP THINK Master Class: “Designing Your Financial Wellness Ecosystem” on September 17 at 11 a.m. Pacific time. During this 90-minute Master Class, hosted by bestselling personal finance journalist Jean Chatzky, attendees will discover actionable steps for strengthening member relationships by focusing on financial health. To register, visit here.