This article on credit union evolution addresses the following key topics:
- Optimizing your digital banking experience to create a digital-first environment
- Using local branches as a storefront for community outreach and sales
- Reviewing and fine-tuning your target market for resource efficiency
- Considering fintech partnerships to enhance your digital offerings to customers
The pandemic escalated the rapid technological innovation taking hold of the financial services sector. Customers expect a modern, convenient, accessible, digital-first approach from financial services providers. This impetus places pressure on credit unions to evolve to compete and survive.
The primary challenge for credit unions that recognize the importance of evolution is figuring out where to begin. The following is a look at some of the vital ways credit unions can evolve that matter most.
Nothing matters more to survival for credit unions than optimizing your digital banking experience. The financial sector was already in the midst of a digital transformation before the pandemic, but the health crisis accelerated the pace. Banking customers want easy, convenient access to all of your products and features from their digital devices.
The following are some of the key facets of a comprehensive digital user experience:
Your digital platforms must provide the information, resources, and products and services that your customers want. A personalized dashboard allows you to customize the experience for each customer, including a view of applications in process and current accounts.
Support across all popular communications channels is now a customer expectation. People want the ability to connect with your agents wherever, whenever, and however they want. A unified communications system is necessary to support your team members and their ability to seamlessly shift interactions across channels.
There are a lot of security and privacy risks that come with digitized financial products and profiles. Therefore, it is imperative that you provide your team and your customers with the most advanced security features, including multi-factor authentication.
The evolution of virtual banking has led to a gradual reduction over time in the number of physical branch locations for many banks and credit unions. However, the branch closure and decline trend has slowed somewhat over the last few years.
Credit unions have shifted away from the conventional model of using branches primarily to facilitate routine banking transactions with customers. Typical services are still available to customers. However, branches are more often used as storefronts to establish a presence in the community and promote the products and services of the business.
The changing structure of branches allows for a smaller space with a leaner operation. Controlling costs is also important to staying competitive and achieving profit. Frontline representatives focus on engaging prospects for accounts, loans, and other financial products. A newly designed credit union branch is helpful in trying to overcome the stigma that credit unions are old and outdated.
To compete, your credit union needs to maximize resource efficiency. Part of resource efficiency centers on your promotional budget. To design your business, products, and promotional strategy for success, it is necessary to precisely identify the target market or markets for your business and products.
Many credit unions have turned their attention toward small businesses in recent years. Part of the government funding for COVID relief centers on small business loans, and lawmakers have urged banks to support small companies trying to get back on their feet following pandemic disruptions.
Whether your goals are to attract consumers away from traditional banks, gain business with the small business market, or both, clearly communicate with local customers. Help them understand the nature of your products and why credit unions are a sensible alternative to the traditional bank.
FinTech has infiltrated the banking system at a rapid pace. Application providers offer products and services on a standalone basis, or partner with banks to enhance the value of their financial products and services. The rapid growth in fintech has created both challenges and opportunities for traditional banks and credit unions.
Buy-now, pay-later programs have grown in popularity. These are point-of-purchase financing offers to buyers that allow them to make a purchase with flexible payment options. Direct access to financing at the time of purchase is much more convenient for customers than having to access loans from another source. Most of these types of programs involve a collaboration between a retailer and a fintech application developer. Fintech companies have also led to more banking competition in the form of virtual banks.
Despite the temptation to view fintech as a competitive factor, it is better to consider how a collaboration could contribute to your evolution. The goal of most of the fintech-bank partnerships to date has been to offer customers seamless financing in conjunction with a purchase or to enhance digital offerings to customers.
Evolution is no longer optional for credit unions. You must adapt or die in the modern financial arena. If you haven’t already done what you can to grow in the ways discussed here, the sooner you do so, the better.
Building up your communication technology infrastructure is one of the best places to start your process. A unified communications solution is central to efficient and effective interactions among employees and between your representatives and your customers.
RingCentral has one of the best cloud-based, cross-channel communications solutions available. It enables seamless transitions from one communication method to another, while ensuring security and privacy for your customers. See how it works and learn how it can help you fast-forward in the evolution process.
Originally published Jul 07, 2022