Optimism Grows Among Credit Unions In A Major Refocus On Member Preferences

Credit unions (CUs) are keeping in step with — if not a step ahead of — account holder preferences and desires in the shifting digital sands of the 2020 pandemic.

That posture is, in turn, helping to ignite optimism and growth across the sector.

PYMNTS November Credit Union Tracker® done in collaboration with PSCU, observes that “Several key factors appear to be driving this growth among CUs. A recent report found that the financial sector is expected to see consumer churn nearly double by 2022 as customers switch banks to access no-fee accounts and higher rates on money market accounts and CDs. The study found that credit unions are likely to buck this trend, however, as they are better able to keep members satisfied and typically offer lower fees and better rates than competitors.”

It’s “experience” by another name, and a tailwind that CUs are riding to keep their intimate connection with members at a time when financial institutions (FIs) are getting traded like over-the-hill pitchers.

Recreating Branch Aplomb Online

Credit union members are, of course, having the same socio-cultural difficulties under the pandemic as everyone else. Perhaps for this reason a great many are staying close to their CUs for the sense of comfort and community they offer. Plus, CUs are doing more with digital.

“Despite the upheaval caused by the COVID-19 pandemic, consumers still want to conduct normal banking activities. Many credit union members who previously preferred to make in-person trips to their local branches now conduct those same activities from the safety of their homes,” Jeff Chambers, president at Lumin Digital, a PSCU company, told PYMNTS.

However, Chamber added that members still want the comfort of the familiar. “This means consumers are looking to their trusted financial partners to provide a personalized and customized level of service, as well as ease of use and convenience. Investing in the technology to effectively aggregate data will enable credit unions to better serve their members with the personalized level of service they have come to expect. Credit unions should use data to identify member preferences and how they can position cards and other offerings to meet their evolving needs. This is critical to provide an engaging, immersive experience that offers easy access to relevant solutions while attracting new members and retaining existing ones,” he said.

Careful With That Data, But Use It

Using member data — or any consumer data for that matter — is a sticky wicket these days, but credit unions are managing it by leveraging their unique relationship with members.

“A recent study found credit union members’ most sought-after features include integrated products for one-stop shopping as well as seamless sign-up for checking accounts, home and car loans and insurance,” according to the November Credit Union Tracker®. “CU members are also willing to share their personal data in exchange for discounts, and many value personalized services based on their spending habits. CUs often have access to the data that can provide a window on members’ financial needs.”

CUs that present consumers with customized products and services on their websites have conversion rates that are 3 to 8 times greater than those standard offerings, per the Tracker.