Credit Unions Must Do More Than Respond to Consumer Expectations – They Should Lead Them

This article was originally published on CUTimes. ‍

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When I look back at all that happened in 2020, and what it could mean for the credit union industry, there is one thing I can say without a doubt: credit unions rose to the challenge of circumstances no one saw coming. Those circumstances, of course, were providing vital financial services during a global pandemic. But, I wonder about the circumstances we have seen coming. When it comes to the technological sea of change in the financial industry, can credit unions move beyond reactionary mode and lead? When a public health emergency necessitated contactless adaptation, some credit unions made it happen. However, I can’t help but think about the preceding years, when shifting consumer behaviors were making a statement, just less loudly and urgently than the coronavirus did. This year we saw the obstacles, objections and excuses that held many credit unions back for years vanish almost overnight. The takeaway from 2020 is that credit unions can effectively respond to any change when it is critical and necessary. The question for 2021 and beyond is whether they can lead change before the circumstances demand it, and avoid a return to complacency when the pandemic is no longer a driving force. The continued need for aggressive change is just as important as what credit unions did to respond to the pandemic. Here's why.

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Big tech is coming to banking.

In recent years, Google and Amazon have made strategic moves into the financial services space. Does that make you uncomfortable? It should. Amazon in particular has the resources of a small country, deep relationships with an estimated 126 million Americans, and is by all accounts relentless in its ambitions. There is little doubt there will be major collateral damage if Amazon starts offering financial products in order to enable consumers and businesses to buy more from Amazon. Credit unions must start yesterday – er, now – to strengthen against competition by providing members the convenient customer focused experience Amazon delivers, combined with the caring community touch it doesn’t.

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Traditional branches aren’t the future.

If I were starting a credit union today, I’d have one headquarters building and zero branches. Now, I get it – no institution is in the fortunate position of starting fresh today with the knowledge of a pandemic would exacerbate the trends already impacting the role of branches. But, credit union leaders are in a position to consider future investments in bricks-and-mortar strategically. Credit union branches aren’t going to disappear – but they should definitely be re-imagined as members’ banking methods and preferences continue evolving. Sometimes, people like having the option to visit a branch – but I’d argue very few today are pleased when they HAVE to go into a branch to complete a transaction – especially for simple tasks like completing signatures.The omnichannel banking of today blends online and offline member experiences seamlessly and efficiently. Before putting more dollars into physical space, I’d first look at whether your credit union has made the technology investments to offer the tech-driven solutions that meet member demands and expectations.

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Member service doesn’t mean what it used to.

When you ask most credit unions what sets them apart from the competition, they proudly answer “member service.” It has become such an ingrained response that I often wonder if credit union leaders pause to think about what it really means today, and if they are truly delivering it. Thoughtful service will always be a hallmark of the credit union experience, but as mentioned above – it must translate equally across channels. It is much more encompassing than cookies or a popcorn machine in the lobby, a smile at the drive-through window, and even offering the lowest rates and fees. The warm fuzzies fade in the face of annoyances that just don’t sync with modern expectations. At a minimum, credit union members should be able to make contactless payments and complete a validation-driven loan or insurance application that doesn’t require remembering when the house was built and how old the roof is. And wait – you want a pay stub and a W2? Isn’t there an API for that? (Yes, there is.) Can you give your members the status of their home equity loan application, beyond “it’s in underwriting?” Are you processing and underwriting a real estate loan in five days or less? Answers to these questions will tell you if you’re well-positioned for 2021 and beyond. Great member service means an outstanding experience through every interaction with your brand. Ask yourself: if a member never steps foot in a branch, will they still feel “wowed?” In 2020, credit unions were there for members like never before, but retaining loyalty and primacy will require more forward-looking leadership and imagination. This year, credit unions showed where there’s a will (or a pandemic), there’s a way.