Through an ongoing process of habituation over the last two decades, consumers have come to not only want certain types of seamless experiences in their commercial interactions — they’ve actually come to expect them. Anyone who has a Facebook account, uses Gmail, orders from Amazon or has ridden in an Uber is used to an easy onboarding process, fast transactions and instant delivery of services. Most critically, CO-OP Financial Services Integrated Product Line Senior Vice President Nish Modi told PYMNTS, they are used to being able to navigate it all from an app on the phone in their hands.
When they look at their financial services providers and start deciding on their primary financial relationships, he said, they expect to see those delightful experiences mirrored — otherwise, they won’t be interested. That’s why, as Modi noted, the world’s biggest banks are spending hundreds of millions and even billions of dollars to upgrade their legacy infrastructure to build out those service offerings themselves — or buying up FinTechs to provide it. It’s not a bad strategy if one can afford to pursue it, he said — but for nearly the entirety of the credit union (CU) population that CO-OP serves, it is not even remotely realistic.
“They have the strong desire to be competitive, but individually, it’s hard for them to invest those kinds of dollars in creating those experiences and creating a competitive landscape for themselves,” he said.
That is why in a sense, CO-OP invested in them by developing and rolling out the CO-OP Developer Portal last year. The intention, Modi said, is pretty simple: to offer credit unions a centralized integration hub where they and their vendors can easily access a suite of application programming interfaces (APIs) that allow them to build richer, more fully realized customer experiences in the configuration of their choice, and at a manageable pace.
Credit unions have a massive opportunity when it comes to their member base in terms of what Modi called the “enormous war chest of trust.” Members like their credit unions and enjoy their interactions with them, but to make the jump to serving as the consumer’s primary financial relationship, he said, CUs need to be technologically ready to accompany their customers through more of their lifestyle journeys.
Creating An Innovation Hub
The two primary issues the CO-OP Developer Portal had to solve for, Modi said, were robustness and security. Security is obviously a value that speaks for itself — it doesn’t matter how powerful one’s product offerings are if those services don’t offer a secure landscape.
Robustness is the more challenging offering, he noted, because the needs of credit unions are diverse. The APIs in the portal are designed not to force CUs to build any particular user experience, but instead to provide the building blocks they need to custom-create that experience.
And those upgrades, Modi noted, aren’t necessarily high-tech, complicated changeups. One simple example is activating a new card. In the old-school approach, the consumer calls the number on the plastic strip on their new card, navigates a voice queue to authenticate themselves and is off to the races. Not a terrible process, he said, but out of step with the fact that most customers prefer to complete the process from their mobile apps.
“It is the same basic function and achieves the same end, but is a much different customer experience,” Modi said. “And that is just a very simple and basic example of how credit unions can take these APIs and build experiences that translate better to their members’ movement.”
And when they can move with their members and interact with them more efficiently, he added, they will likely find that they transact more with them.
Tapping The Trust War Chest
Credit unions’ advantage over almost every other player in financial services, Modi said, lies in the trust between them and their members, which primarily buys them time. Those members see the CU as their ally in managing their financial services, and are willing to give them the benefit of the doubt in a way that big money center banks won’t get from their customer base.
That is a powerful starting point in any relationship, but credit unions now have to figure out how to turn all that goodwill into more robust relationships with their members — which requires updating and enhancing the member experience.
It’s those updates that keep the members coming back, said Modi. Not just for services like small business loans, mortgages and the like, but also for their day-to-day payment needs in general. For credit cards and personal loans, the goal is to look at the member’s lifestyle and then create a suite of offerings that best complements his or her lifestyle events. If firms can combine the trust in the credit union relationship with the experiences consumers are ever more loudly saying they want, there is the potential for a host of truly powerful CU offerings.
“If you stay engaged with your members through different lifestyle events, you will be at the forefront of their mind when they come to a life stage event,” noted Modi. “That might be buying a home, it might be getting a loan – it all sets up credit unions to engage in higher-value, revenue-driving opportunities. But it can only happen if they can keep in touch with their members and what they need.”