Credit unions leverage digital tools to grow

Credit Unions (UC) are historically known for their service – the tellers who know you by name and the call center employees who will take the time to make sure your questions are answered.

As they expand their services to other channels, it can be difficult for credit unions to recreate these interactions during digital engagement.

“I think it takes thought and purpose as to what kind of experience credit unions want their members to have, regardless of channel,” Denise Stevenssenior vice president and chief product and digital officer at PSCU, said PYMNTS. “That’s always a credit union’s challenge – they have to recreate that in every channel, whether it’s digital, a branch, an ATM or a call center.”

Leverage the right tools to create personalized engagements

Taking a digital experience and completely personalizing it isn’t just nice to have anymore, Stevens said.

Members accustomed to dealing with Amazon, Netflix and Spotify require it. These tech giants and others have achieved high digital engagement, even though they probably never spoke to the customer.

“They’re leveraging the right tools, especially in data, to create personalized engagements — and consumers love it,” Stevens said.

CPUs, too, have always used data. When direct mail was the primary means of communication with potential members, UCs used data to determine the best offer and the type of card the recipient qualified for.

Now, it’s not just about a target audience, it’s about a personalized experience. To achieve this, companies not only use data from credit bureaus or a FICO score, but also information about a potential member’s personal habits, affinities, and life stages.

“So really, it’s about finding a partner that can provide the momentum and the tools that credit unions will need, because it’s a lot harder to go about it individually,” Stevens said.

Read more: Credit unions team up with FinTechs to compete as one

Understand member needs

PYMNTS research found that about half of UC members also do business with other financial institutions, although many would prefer to do business with just one institution.

Stevens said members are looking elsewhere because of cost, convenience and specialty services. For example, these members may want a lower interest rate or a specific option such as buy now, pay later (BNPL), so it is important for CUs to survey customers to understand their needs.

“So I think it’s really up to credit unions to look at what their high-performing financial products are against the needs of their members,” Stevens said.

Because UCs are community-driven, they are successful in reaching everyone in their community. With the acceleration of digital, they have also been able to reach people who were previously unreachable.

Having the right products and services available across all channels is important because it provides options for those who can’t get to a branch or are uncomfortable with an ATM.

“So really, it’s about, ‘How can I deliver products and services in every channel to meet all of the opportunities that are out there, to meet their needs?'” Stevens said.

Leverage the strengths of credit unions in new markets

UCs are also well positioned to serve small businesses, although banks have always had a grip on this segment.

“I think it could be a game-changer for credit unions if they get it right,” Stevens said.

Digital will remain a key priority for UCs for a long time to come, advancing further into the spaces of artificial intelligence, data and payments. As they strive to understand the kinds of products that drive engagement, trust, and convenience, UCs need to ensure their boards and employees are both well-equipped to have conversations with the members.

“I think it just allows them to take on that trusted advisory role that so many of them have to their members,” Stevens said. “If they’re not ready for certain types of new financial services that might be risky or just new, help educate them until they’re ready. I think it’s a huge opportunity for them.

See also: Convenience pushes consumers to open the banking system

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NEW PYMNTS DATA: ACCOUNT OPENING AND LOAN SERVICE IN THE DIGITAL ENVIRONMENT

On: Forty-two percent of US consumers are more likely to open accounts with financial institutions that facilitate automatic sharing of their bank details upon sign-up. The PYMNTS study Account opening and loan management in the digital environmentsurveyed 2,300 consumers to explore how FIs can leverage open banking to engage customers and create a better account opening experience.