The ‘Omnichannel Credit Union’ is Not Only a Thing, But It’s Working Too

Given that most members interact with their credit union (CU) about 100 times a month, innovation in payments solutions is the single biggest product or service offer that CUs can use to prevent member defections, Brian Scott, senior vice president and chief growth officer at PSCU, told PYMNTS in a recent interview.

Whether those interactions are done through some sort of payment device, through a credit or debit card payment, writing a check, conducting an ATM transaction or using bill pay, these daily touches are a major retention and acquisition opportunity.

“So, making those payment options personalized, simple and secure is really important,” Scott said. “That’s where, in my opinion, credit unions should be focusing to prevent that true loss of a member — not just having them moonlight and try out another solution, but the true losses.”

Most Members Are Moonlighting

He noted that a lot of credit union members moonlight by trying out other options in the marketplace and exploring that experience. Most consumers have a second account somewhere, perhaps because they got a better mortgage rate or auto loan rate somewhere.

Indeed, 55% of credit union members have used a product or service from a different bank or financial institution, according to the Credit Union Tracker produced by PYMNTS, in collaboration with PSCU. Scott noted that this figure has been over 50% for awhile.

“I don’t know that we’re going to necessarily prevent [members] from trying out [competitive offerings] or moonlighting, but I do think we can prevent [them from] truly taking all of their business somewhere else,” he said.

Credit Unions Are Prioritizing Innovation Budgets

The Credit Union Tracker also found that 66% of credit union members want to take out second mortgages with their credit union, but not a single credit union that was surveyed was eager to innovate second mortgage products to boost member retention.

“First of all, it’s a great compliment to those credit unions that 66% want to take out a second mortgage with that credit union, and that may actually mean credit unions are doing okay in that space,” Scott said.

He noted that every credit union must prioritize its innovation budget, and many prioritize auto loans or payments and cards. So, there may not be a need to innovate or create additional technology around second mortgages.

Omnichannel Approach Boosts Member Satisfaction

Another area in which credit unions are doing well is member satisfaction with the lending experience. Research from Fannie Mae shows that 93% of recent home buyers are happy with the credit union lending experience, compared with 90% for traditional banks and 85% for mortgage banks.

Scott said credit unions have been taking an omnichannel approach that merges the in-branch experience with personalized digital tools, so a member can start in a digital channel and finish in a branch or vice versa. Many also use artificial intelligence (AI)-based decisioning tools that allow them to complete loan transactions in seconds.

“Whether it’s digital, online, in-person, in-branch, it doesn’t matter — that experience, that omnichannel experience, is the same,” Scott said. “I think that’s where credit unions have done a really good job blending those.”

He added that if AI-based decisioning tools are to work well, they need good, clean data. That gives credit unions a competitive edge.

“Credit unions have years and years of data, they have a long history worth of data with their members, where a lot of FinTech solutions, as they’re just starting up, they don’t have that rich data solution set,” Scott said.

Call Center Volume Remains High

Another way credit unions have been competing is by using digital tools to reduce call center volume without sacrificing member satisfaction. The Tracker found that call center volumes spiked during the pandemic and remain higher than they were pre-pandemic.

Scott noted that the pandemic has significantly reduced branch traffic and driven a whole different generation of credit union members to get used to interacting on the phone. This is another opportunity for credit unions to provide an omnichannel experience.

He highlighted two technologies that can help here. One is PSCU’s Unified Agent Desktop, which enables a single agent in a call center to easily answer a multitude of questions and provide a broad range of services. The other is caller authentication, which provides additional security by validating the member by their voice, the phone number they’re calling from and their experience with the credit union.

Digital Tools Reduce Basic Questions, Enable Valuable Conversations

Scott added that digital tools provide members with transaction information, such as their balance, so what people are calling about now are more complicated questions regarding how to manage their financial journey through life. Those, he said, are the conversations credit unions want to have with members.

“I think that’s the real advantage that digital tools have enabled; they allow credit unions to have those really valuable, high-impact, high-touch member conversations,” Scott said.

Looking at the big picture, Scott said credit union members are continuing to increase their spending and their use of both credit cards and debit cards, and “that speaks to a continued level of confidence that credit union members have – in both … credit unions and … the economy going forward.”