A challenge and an opportunity: the future of UC lies with the member

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The banking landscape is becoming more crowded and fragmented every day. New fintech challengers continue to emerge, and the market for neo and challenger banks is estimated to reach $578 billion by 2027, according to a Facts & Factors research report. The reality is that credit unions now face an existential threat from growing competition from fintech platforms that offer more simplified, streamlined and personalized banking experiences, all on consumers’ mobile phones.

However, with every great challenge comes a great opportunity. The challenge presented by the booming fintech market also presents an opportunity to transform their businesses, close the gaps that fintech challengers are still leaving in their wake, better serve consumers’ banking needs and become the choice consumer favorite.

The credit union that succeeds in this regard will be the institution that creates an experience centered on the full life cycle of retail banking – from member onboarding, to ongoing financial well-being, to financial highlights. – on a single and unified platform accessible from anywhere, from the branch on the member’s smartphone. In other words, the credit union that is there for its members every day, with easier, faster, and more personal banking, will be the institution that will survive and thrive for years to come.

Fast and bulk origination

It all starts with the first impression. First impressions count, so it’s no surprise that delight members start by gently bringing them in. Seamless onboarding and origination means making the experience completely digital, eliminating friction, and onboarding members in a way that wows them. However, Marous’ research showed that only 50% of institutions engage in customer onboarding. Automation and digitization are key here. Providing a superior digital experience means making the best possible first impression, which becomes a self-perpetuating cycle. Consumers will keep coming back if their experience is high quality from the start.

Credit unions therefore need to remove the traditional pain points of onboarding and product creation and create instant member satisfaction. One of the most important factors here is allowing members to perform digital identity verification – traditionally one of the most painful parts of onboarding where financial institutions see the most downside. Using instant photographs of an ID, then having the member complete a live verification via self-recorded video, credit unions can onboard them in minutes.

Digital onboarding can go a step further, however, and allow members to create multiple products at once, which increases member loyalty and loyalty. By putting multiple product offerings in front of the member in the app, in a clear and helpful way, credit unions can offer a bundled approach to onboarding. This allows them to cross-sell and up-sell and provides value to both the member and the credit union. For example, with the right digital experience during signup, a member could be prompted to simultaneously open a checking and savings account or even add a credit card, resulting in instant engagement. However, for this approach to be successful, execution needs to be nearly instantaneous, which means members need to be able to track signup in just minutes, with minimal inconvenience.

Foster a healthy financial life

Once a member is at the door, the challenge is to retain them – again, this reflects the increase in the number of fintech challengers competing for attention and providing additional value elsewhere. Credit unions therefore need to shape their day-to-day digital banking capabilities to sustain member interest and grow engagement in the app. It depends on the ability to provide maximum value throughout a member’s financial life.

With the right digital technology in place, institutions can offer smart app features that give members value they can’t get elsewhere, like deep insight into financial well-being to empower their day-to-day decisions. By providing a holistic view of all accounts and financial products in one place – including an overview of all accounts or products with other financial institutions and fintechs – credit unions can provide unique and meaningful information to help members better manage their overall financial well-being.

But true financial well-being depends not only on having an overview of all accounts, including investments and debts; it also requires an understanding of the impact of new decisions on overall financial health. Digital technology allows credit unions to add features such as smart savings features, which help members analyze their transactions; set new, lower budgets for certain expenses (like their daily latte); and reallocate the extra money saved in separate savings accounts for the things that matter most to them, like vacations. Additionally, by providing an instant view of a member’s credit score through their app, credit unions can digitally suggest actions a member could take to impact their overall financial situation. This could include suggestions for consolidating credit cards or creating a digital budget to help control spending behavior in certain areas. Using analytics and automation, credit unions can deliver in-app experiences like this, empowering them to advise their members on how to make better decisions for their financial well-being and instantly show the potential impact of change. This is the type of above-market value that will result in member loyalty.

Personalize experiences at crucial moments in life

Key moments in our lives are always tied to financial implications. That’s why, to deliver more value and become the banking app members love, credit unions need to better understand how their members’ needs change at pivotal times in life and anticipate the personalized services that can be offered in response.

Meaningful, digital, and well-analyzed data can empower employees to create more impactful member interactions. For example, using data and automation, credit unions can provide personalized advice on cross-selling and upselling opportunities that align with key milestones members are experiencing. And these touchpoints can be executed through different digital channels, such as via a push notification on a member’s mobile phone, which invites them to subscribe to a product that is hyper-relevant to their needs. Better and faster access to data means harnessing the power of the cloud, enabling institutions to be proactive. That being said, a recent IBM report indicates that while 91% of financial institutions use cloud services, a gap is missing where only 9% of critical regulated banking workloads have moved to a public cloud environment. This is a much lower number than other industries. By having a clear, aggregated view of all member data in one place – tracking their habits and logging every previous touchpoint they’ve had with their financial institution – while combining this with smart analytics and l With automation, credit union employees can be more productive and efficient with member relations. They can send in-app prompts that give members the ability to create new products that support key moments in their lives, such as car loans or mortgages.

Customer banking for the future

It is not enough to be competitive in today’s banking environment. To survive, credit unions must be the orchestrators of simple yet personal digital experiences, creating engagement with members that goes far beyond what they currently get from basic banking services. Financial institutions must personalize each facet of the banking experience in order to improve the daily lives of their customers or members, while increasing their operational efficiency. And this can only be achieved by taking a platform approach to technology, where all data, products, channels and touchpoints are centralized and feed into each other to create digital experiences that are intuitive, intelligent and , above all, pleasant.

Vincent Bezemer Vincent Bezemer

Vince Bezemer is SVP, Strategic Business Development at Backbase, based in Atlanta.

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