There is a common misconception that “going digital” will put a cap on the depth of relationships that CUs can have with their members, but this just isn’t the case. If credit unions are seeking long-term, engaged members, they must be willing to adapt to changing technology.
Over the last 10 years, consumer financial behavior has evolved from taking long lunches for physical branch visits to utilizing digital transaction technologies on the go. Today, consumers expect a personalized experience, and often prefer these interactions using mobile apps and digital payment options.
Juniper Research predicts that by 2024, the number of digital-banking users will exceed 3.6 billion, up from 2.4 billion in 2020. That is over a 50% increase.
Mobile Banking Isn’t Just for Young Adults
Competitive financial institutions have already invested in and continue to place a focus on mobile banking. Allowing members to complete personal finance transactions via a smart device like a phone or tablet is a preference that many Millennials and Generation Zers have made commonplace.
Mobile banking is multi-generational. While 97% of Millennials use mobile banking, 91% of Gen Xers and 79% of Baby Boomers also appreciate the convenience.
Building Member Confidence in Digital Transactions
While it may sound fairly simple to digitize your transactions, a perfect digital experience is more than just an advertised product or service with an integrated payment box.
Your members must trust your mobile app or website to engage. Creating a consistent transaction experience that is catered to your member data and providing enhanced security to protect their information is critical for improving customer experience.
Keep your digital transactions consistent with help from consumer lending forms for credit cards. Find a partner who keeps up with changing regulations, so you don’t have to. Your forms may be customized to your needs, which will instantly improve your customer experience.
Digital Payments Overtake Traditional Payment Methods
In 2018, for the first time, the number of ACH transfers (16.6 billion) exceeded the number of physical check payments (14.5 billion), as recorded in a study by the Federal Reserve. The rideshare company Uber, made waves regarding digital transactions by allowing users to pay through the app, removing the need for a wallet or purse to use the service.
As consumers gain more confidence in digital transactions, credit unions should use mobile avenues to market new products and branded electronic statements.
Fraud is one of the biggest hurdles when increasing your digital transactions. It is important to invest in adequate fraud prevention to remain proactive when your competitors choose to be reactive. Your members are top priority, and vowing to protect their personal information at all costs can be a huge relationship booster.
Upgrading the User Experience
Standing out in a digital world requires attention to the end-user, your member. Adding creative digital features that improve the user experience can inform members of more relevant products. This translates to more loyal members.
Use your mobile app to apply these three critical engagement builders:
Advertising products and services on the mobile log-in screen
Personalized UI, addressing member by name, custom colors
It is important to note that digital changes should always keep members’ needs in mind. There is no one-size-fits-all approach to a personalized digital experience.
Only making surface changes will not result in higher engagement, overall. Rethinking the member experience may involve efficiency or accommodation changes to your current system. For example, this could entail aggregating data so that a member’s multiple bank accounts could be accessed for a simplified mortgage application process.
Refrain from copying another credit union’s generalized digital upgrades. The features their members need might not be the right solution for your branch. The more you can differentiate your CU from the next, the better.
Preparing Your CU for Future Digital-Savvy Members
While the current core groups of member engagement are Millennials and older generations, Gen Z and Gen Alpha are not too far behind. According to the infographic provided by McCrindle, Generation Z includes all people born between 1995 and 2009, and Generational Alpha includes those born between 2010 and 2024.
Gen Z makes up nearly 30% of the world's population, and by 2025 will make up 27% of the workforce. They are also the first generation to be influenced by the 21st century, the internet, and connected through social media.
This influence means Gen Z has no recollection of life before the internet and mobile phones. Nearly 100% of Gen Z consumers own a smartphone and spend over 4 hours a day online, making more than half more insecure without their phone than their wallet. And the oldest Gen Zer born in 1995 is younger than the introduction of Amazon, which turned 25 in July of 2019.
However, with the luxury of choice comes fatigue. Compared to Millennials, Gen Z prefers to have fewer choices to mull through in regard to apps and streaming services. Honing in on a single credit union app and simplifying forms can increase engagement with Gen Z.
Known as "digital natives,” Gen Alpha is the most technologically literate. They are a generation fueled by automated cars and smart speakers.
In 2034, when Gen Alphas are in their 20s, it is predicted that the global population will reach 8.8 billion. That's double the population of their parents' generation in the 1980s.
While Gen Alphas are still too young to generalize, predictions are starting to be made. Gen Alpha is said to be more impatient than their predecessors since digital technologies have been provided for them since birth. After polling current 7-9-year-olds, they are also said to be more socially conscious than Millennials or Baby Boomers were at their age. This is perhaps an observation of current events regarding social, economic, and environmental unrest.
While most observations of this generation are premature, it is safe to say that Gen Alphas will more than likely be conducting transactions with their voice, and expecting their financial institutions to fully automate a personalized experience and participate in global social causes.
How to Increase Your Digital Footprint
A complete digital overhaul is impractical, but it is easy to take steps in the right direction. Useful technologies such as “Pay by SMS,” web bill payments, and IVR (interactive voice response) are all beneficial ways to take that first step. Adopting these technologies can improve payment collection and security verification.
Digital onboarding should be as simple as possible. Don't ask too many questions, or the member may get bored or fearful during the process.
IVRs are an easy way to allow members to call in at their convenience. Perfect for targeted marketing, and a reduction in time and money spent on outbound calls.
High-risk members will benefit from timely bill reminders and increasing the methods of payment you accept. This automation can decrease the cost of collecting payment and increase customer satisfaction.