By Samantha Paxson, CXO
Today’s consumers want a financial relationship that can help them manage their daily financial needs and improve their overall lifestyle; but they haven’t found one yet. We know this because 40 percent of consumers are digital nomads. 60 percent of members that identify credit unions as their primary financial institution are using a bank for some type of financial service.1 And according to a 2019 Accenture study, having a “one-stop-shop” within financial services was the number one need identified by today’s consumers.2
How do we become that primary financial relationship for our members? As I discussed in a recent interview with PYMNTS.com, it all happens through payments. Payments represent 80 percent of the interactions a member has with their financial provider today.3 As a credit union leader that tells you that maximizing engagement and delivering an exceptional payments experience is the path to become your members’ PFR.
Getting in the Engagement Game
Maximizing engagement means focusing less on a members’ life stages and more on owning more everyday member moments. Think about it: we can only know so much about our members from the few interactions we have on the lending and deposits side. But understanding where and through which channels our members are spending everyday allows you to understand where to invest into your payments strategy, whether it’s rewards, digital wallets, or products that help drive engagement (like card controls). In our recent Quarterly Live Cast, CO-OP Chief Product Officer talked about how the rapid growth of P2P adoption helped drive CO-OP’s investment in our Zelle solution. Having a pulse on where your members want to engage can help guide your overall payments strategy.
Leveraging Payments to Deepen Member Relationships
Payments are often thought of as an “off-to-the-side” revenue stream; however, over the next five years there is $500 billion of incremental interchange revenue up for grabs through payments.4 Not only that, payments will become the primary driver of deposits and loans.
The credit union lending market just experienced its third consecutive year of growth decline largely because members have so many options when it comes to lending providers.5 But imagine being able to differentiate your loan products by knowing exactly when and for what amount a member needs a loan and then delivering that loan to the member on the spot. It creates a valuable revenue opportunity for your credit union but it also shows that member that you really understand his or her lifestyle and can anticipate his or her needs.
More Engaged = More Loyal
Which leads us to the most important part of PFR: trust and loyalty. Trust is the number one factor a consumer considers when choosing to do business with a brand.6 While members are engaging less with us in our branches and Contact Centers, they still want assurance that that we have their best interests in mind. Payments gives us that opportunity to deliver daily on that promise to our members, in turn driving engagement and loyalty among them.
For CO-OP, helping credit unions become their members’ PFR is the central focus of digital transformation over the last three years. We’ve invested millions into a payments ecosystem that can not only compete but stand alone in the financial services landscape. As many of you heard on our recent live cast event where our 2020 roadmap was unveiled, we’re planning to roll out a number of solutions this year that will actively strengthen that ecosystem and help bolster your payments offering. If you missed that event, I highly encourage you to watch the replay here.
I look forward to sharing our progress on that roadmap at our upcoming THINK 20 conference – August 17-20 in Dallas, Texas. Don’t forget to register before March 20th to take advantage of our special discounted pricing ($300 off).
2 Accenture 2019 Global Financial Services Study
3 McKinsey: “Global Payments Report 2019: Amid Sustained Growth, Accelerating Challenges Demand Bold Actions”
4 Accenture “Payments Pulse Survey: Two Ways to Win in Payments”
5 CUNA with data analysis by CU Times
6 Edelmen, “2019 Trust Barometer Special Report