As demanding as getting your credit union up to speed with the digital tools may seem, a great future awaits for those who embrace it. We get it, innovating and staying current can feel like a burden. But we also wholeheartedly believe that, in this case, "What does not kill you makes you stronger," and want to share why. Let's start by taking a closer look at the credit union landscape.
The number of credit unions (CUs) in the US has actually declined since 2008. Some of the smaller ones have closed, and some of the larger ones have merged and consolidated to create conditions for greater efficiency and competitive edge. This can make one feel threatened or uneasy, to say the least. But what happened to the ones who didn't close?
Many widened their services, and by using digitalization to leap-frog over their previous geographical restrictions, they have found new members. Some merged with another credit union or, depending on the purpose of the union, found methods by which new members could join, such as a subscription to an interest group. While all these were good, adaptive responses, we think the greatest challenge is ahead of us, not behind.
The "digital imperative" was coined by Boston Consulting Group a few years ago to describe fundamental actions around digital strategy and transformation to avoid extinction. So CUs are right to be concerned - staying quiet is not an option. Even if only baby steps are taken, embracing digital transformation has proven to increase the chances of survival.
Some credit unions were able to attract a younger type of member, who is technically savvy, but willing to switch service providers the minute something goes wrong. Younger customers tend to claim instant attention, hands-on guidance about usage and products, and personalization. While daby steps get you in the game, now it's time to think of transformation as a journey.
The Stanton 2018 Report says credit unions are moving more slowly towards digitalization than commercial banks. That credit union leaders want to keep the level of personalization they achieved pre-digitalization, and many are still skeptic towards algorithms. They find it difficult to believe that they can do better with technology, and even fear technology may increase the distance with their customers. At Prisma, our point of view, based on our experience, is that technology can deepen and expand the relationship. One of the ways it does it is by capturing data at all the touchpoints between members and the CU. Technology also allows a CU to improve the relationship through the member's perspective.
Many credit union leaders also find it hard to accept that digitalization alone can level the playing field between large and small players. But they are also faced with the problem that the traditional benefits of being a member of a CU are not enough to meet today's expectations. Young members want a first-rate digital experience more than an in-person one. Even older demographic groups are becoming so accustomed to digital technologies that they expect to find them every time they carry out banking transactions.
Non-banking companies like Amazon and Google are setting the standards by which all are being judged. And that's not going away.
Another fear is that technology will force CUs to continually change to offer the latest "in fashion", which may not be their style. We get that too. That's why we believe it's important to choose a technology not based on features, but on the vision it supports, so it can grow with you, align to your changing needs and integrate with what you already have. And it has to be backed up by people who understand where you stand and where you want to go.
According to the 2018 FIS PACE Bank Executive Study, only 38% of credit union leaders viewed digital transformation as a priority, which was the lowest percentage among all bank types. Furthermore, 28% of credit unions already believed they were spending too much, and 8% had already decided to cut back on that spending. We find this really concerning. That's why we work together with credit unions to improve that experience and create a more positive and empowering vision.
Leveraging digital contact with their members without losing the personal touch that has characterized the credit union relationship with its clients for so long is not a minor challenge. But we believe it's worthy and doable. At Prisma Campaigns we have developed a powerful platform that uses your data to coordinate and execute segmented and personalized campaigns through all digital channels, at scale.
Whether your priority is to acquire, convert, satisfy or retain customers, Prisma Campaigns allows you to create a personalized and relevant experience for your members that honors your CU's reputation for excellent service.
It's a new paradigm, and we look forward to helping you embrace it.
Image credit: shutterstock.