Consumers’ lives are becoming more digitally focused, which means it’s natural and expected that credit unions (CUs) are feeling the pressure to raise the level of their services across channels. This fact is borne by data in the latest edition of the Credit Union Tracker, a PYMNTS collaboration with PSCU, which found that 59.9 percent of customers reported that having a mobile app is “very” or “extremely” important to them in terms of their CUs’ offerings.
Moreover, PSCU’s SVP of Product Denise Stevens told PYMNTS in a recent interview, credit union operators can feel the direction the digital winds are blowing. Consumers are shopping, gaming and streaming entertainment online — everything is increasingly becoming digital-first, particularly for younger consumers, and credit unions nationwide know they must compete on those grounds.
The challenge lies in the “how.” The customer isn’t just looking for a slick app on mobile devices, over the phone, at a branch on a desktop or at an ATM. The member wants a consistent experience that follows them, whenever and however they tap into it. They want it to be easy and intuitive, and to assume it will be safe and secure.
“It’s not an easy task for credit unions to drive an experience, and they are often partner-reliant because doing it themselves is usually not the right, or even a realistic, strategy,” Stevens said.
That means it’s critical to make the right partnership decisions — and credit unions need to resist the temptation to get pulled into many different directions from pursuing a lot of initiatives. The right first step forward is often a step back, Stevens noted, so operators can see beyond the individual projects to the total experiences they are trying to construct.
Finding Friendly Ground With FinTech Firms
The latest edition of the Credit Union Tracker included a statistic that can seem scary for credit unions, particularly those contemplating their future of partnering with FinTech providers: 79 percent of credit union members reported that they would stray from their CUs to access fast, convenient services from a FinTech provider.
“That is a big revelation — fundamentally, it means that when people are planning their future, saving for retirement or planning a loan for a home, they are willing to trust that to a FinTech simply because of ease of use and access,” she said. “Credit unions need to really pay attention to what a customer truly values in an interaction.”
However, she added, for all the disruption that FinTech firms have brought to financial services in general, they aren’t an adversarial force in the market for credit unions. Rather, they are potential partners in filling the gaps in the service offerings.
That requires specific types of partners, Stevens noted — those willing to integrate within a credit union’s existing products and systems. Branding is also easily underestimated, but is something credit unions need to keep front and center in the consumer experience because the expanded offerings are only as valuable as they are a recognizable part of the credit union experience.
The trust-based relationship is what tends to distinguish credit unions from other financial service offerings, Stevens noted. If that relationship can be extended through digital channels with partner assistance, and all of that “is still wrapped around the safety and security credit unions have always promised members,” she said, it’s a pretty powerful offering.
It can be a better offering going forward.
Using Data To Build What’s Next
Technologically integrated credit union services create more and better data, Stevens said, and the data itself is the secret ingredient to creating better customer experiences and security protections. Today, CUs can offer consumers an easy user interface and experience when they access their accounts on mobile, or perform a mix of functions on a phone or at an ATM.
“When [we go] a step further, we can use that data in ways that are actionable, and go the extra mile for the consumer,” Stevens said. That might be in the form of offering more information or education, or pushing products. “Credit unions build relationship[s] and loyalty by having members’ best interests in mind, and data can help us predict those interests better and react to them.”
Better data is also key to repelling those who do not have members’ best interests at heart (cybercriminals), she noted, but in a way that does not negatively impact the users with a ton of false-positive fraud readings when they are trying to shop.
The dual-edged sword of technology in fraud-fighting, she added, is that fraudsters can also use technology in their efforts to evade systems. In PSCU’s recent partnership with Pindrop in its call centers, the bank has learned that raising the number of fraud factors that can be tracked can keep its account takeover fraud figures low.
“That extra Pindrop technology in call centers can check the IP address, where the call is coming from, what cell towers it is pinging, the voice pattern of the caller, any background noise — and can evaluate all of that to make sure [the person] calling is who they say they are,” she said.
The year 2018 was a good year for credit unions — membership came in at 115 million, and Stevens said the expectation is for more growth in 2019. Getting there depends on helping credit unions to meet member expectations, and exceed them whenever possible. It is not easy work, she noted, but it is guided by a simple principle: “how we lock it down so that everything the member wants becomes something they can easily do.”