Member centricity is in every credit union’s DNA. But putting member needs at your core in a digitally accelerated world calls for new understanding and new approaches. To better understand what members want and need from their financial services providers now, CO-OP partnered with EY to survey 3,000 credit union members and prospects. What we learned was eye-opening:
- Changes in needs, expectations and interactions: No surprise, the market has shifted permanently toward digital experience as the means and measure of a financial service’s worth. More than half (54%) of respondents say they expect to continue using digital channels they’ve adopted in recent years. Members are increasingly open to alternative providers: 40% say they would look outside their Primary Financial Relationships, even for core products like savings accounts. And, more than a third (36%) would switch more assets to their PFR if it offered more benefits and personalized features.
- Fragmented financial relationships: You are no longer your members’ one and only. The average member has five financial relationships.
- Building trust by fulfilling member needs. Respondents named PayPal as their most trusted financial brand—even ahead of their credit unions. How can this be? PayPal offers a convenient, secure, seamless payments experience respondents rely on over and over in their everyday lives.
How easy are we making it for members?
Fintechs succeed at lifestyle enablement by offering needs-based solutions—think of PayPal for secure, unlimited, low-fee transactions or Ally for easy-to-use direct deposit, bill pay and money transfer.
For credit unions, building engagement, loyalty and trust means bringing members’ lifestyles front and center. Payments provide an active path to growth and a key complement to traditional life stage products like home loans.
Understanding your members’ lifestyle needs can help you identify payments solutions that personalize the experience. For example, providing instant digital card credentials offers members an immediate way to transact when they’re waiting for replacement cards. A competitive rewards program keeps members transacting and offers another good reason to continue choosing your cards. New solutions on the horizon at CO-OP target cardholders who are trying to build credit, help their family members build credit or use credit creatively: CO-OP Pay Over Time Transactions lets cardholders pay for selected purchases as installment loans, while CO-OP’s Family Card Issuance solution enables cardholders to share a credit account—and credit-building benefits—with a spouse, partner or family member.
Moving from product-centric to member-centric
New products and solutions can help credit unions anticipate and respond to evolving member needs. But the goal is to be member-centric, not product-centric. As we look to build the member relationships that will fuel growth far into the future, here are three critical strategies to consider:
- Know your members like never before. Foster a data culture, so you can interpret your data and leverage behavioral science to better understand member motivations and uncover new member needs. Data gives you intelligence; it also empowers you to react and “pro-act” in real time. Look for new opportunities through micro-segmentation. Use data to ensure a seamless experience.
- Be their choice for every moment. Think like a fintech—the credit union way. You can still meet members at every life stage but consider the value of deepening relationships by being there at every moment. Here, payments are the path to active engagement. When you leverage data to create personalized experiences and prioritize payments to create constant engagement, you move your members from passive to active.
- Embrace the power of connection. Invest in a digital ecosystem to accelerate your relevance. Everything depends on it: your access to data, rapidly evolving solutions, powerful security, the best partner insights, integrated operations for better service delivery and more. Making the right digital investments can open up whole worlds of possibility, and you don’t have to do it alone.
How credit unions can find their core
CO-OP is making highly significant dollar investments to help credit unions rise to this challenge. The stakes could not be higher. Our consumer survey found that without additional investments in lifestyle banking, credit unions could lose nearly all their market share. But, with the right strategic investments, credit unions can compete and win against fintechs, big banks and wealth firms.
Putting members at the center of your organization means offering them the tools and features, security and trust they want from their Primary Financial Relationship. That’s not in place of the member-centricity that’s always been at the heart of the credit union movement, but together with it. Give yourself the capacity to evolve and respond, so members can put you at the center of their financial lives.
For a deeper dive into CO-OP’s research on the importance of driving growth through payments and active member relationships, view our latest white paper, “CU PaymentsOutlook: How active member relationships drive long-term growth.”