How UCs Can Leverage Member Loyalty Rewards

Credit unions (CUs) are well known for their customer service, but they are often overlooked in favor of the flashier digital services provided by traditional banks and FinTechs. For example, a recent study found that 40% of financial institution (FI) customers are likely to leave their primary FI if its digital experience is not comparable to an online shopping experience, and CUs do not exception to this potential attrition.

CUs work to reduce this potential attrition through rewards and loyalty programs, which offer members cash or other incentives to stay with their CU as their primary FI. Those who lack such incentives could quickly see their membership base dwindle in favor of traditional banks and FinTechs.

In October Credit Union Tracking®PYMNTS explores the latest in the world of UC, including how rewards programs work to retain members, new collaborations between UC and FinTech, and how UC is working to integrate the latest digital banking technologies.

Worldwide Developments of Credit Unions

An example of a CU loyalty program comes from the Navy Federal Credit Union, the largest CU in the nation. CU announced that its new card will offer 1.75% cash back on all purchases, with an additional bonus of $250 for new cardholders who spend $2,500 within 90 days of opening the card. account. Navy Federal card product manager Justin Zeidman said in a press release that the program is intended to reward CU members for choosing him as their primary FI, build customer loyalty and discourage store closures. their accounts.

PSCU also strives to foster CU member loyalty and reduce churn. The company recently unveiled a new prepaid card platform for this purpose, allowing members to view their transaction history, check balances and receive real-time alerts through the PSCU My Card Manager mobile app. . This prepaid card option was also inspired by the ongoing pandemic, which the PSCU says has prompted increased customer focus on money management.

Digital banking is another promising avenue for retaining members, but some CUs are still hesitant to jump on the cyber train, with 15% of CUs still not engaged in digital strategy, according to a recent study. Some of this hesitation can be attributed to the pandemic, with some CUs waiting for a less volatile industry and economy before committing to long-term change; however, most CUs have found that digital partnerships have driven steady growth.

To learn more about these and other CU news, download this month’s Tracker.

VyStar on Combining Rewards Offerings and Member-Centric Services to Build Loyalty

Rewards programs can go a long way in building member loyalty, but they’re only one part of a multi-faceted approach to getting there. CUs must also provide exceptional customer service, including occasional, one-time surprise incentives, to keep members engaged. In this month’s feature, PYMNTS spoke with Melissa Thomas, Senior Vice President of Payments and Operations at VyStar Credit Union, based in Jacksonville, Fla., about how CU leverages rewards cash and features such as advance direct deposit to encourage member retention.

In-Depth Analysis: Improving Member Retention with Loyalty Programs

Member attrition is an ongoing concern for UCs, with large banks and FinTechs poaching customers through engaging digital services. Keeping those members with CU is essential for long-term success, and many have found that rewards and loyalty programs are key to achieving this. In this month’s Deep Dive, PYMNTS explores how UCs reduce member churn by offering cashback credit cards and other loyalty systems.

About Tracking

the Credit Union Tracking®produced in collaboration with PSCUis your go-to monthly resource for updates on trends and changes in the credit union industry.