As is the case with any entity, banks’ relationship with their end customers is only as strong as the trust that exists between the two, and in satisfying the priorities of their members.
And right now, credit union members want to be reassured that their data and their money is being kept safe. As detailed here, last year, scams have become the leading form of fraud, surpassing digital payment fraud. The share of scam-related fraud increased by 56%, financial losses from scams rose 121% and the percentage of banks that posted a boost in dollar-denominated fraud losses stood at 42%. That’s a jump from the 29% of financial institutions (FIs) that had said the same in 2023.
In the report “Retention Roadmap: Credit Unions Drive Member Loyalty via Priority Alignment,” done in collaboration between PYMNTS Intelligence and Velera, we found there are real advantages in meeting expectations — as top-performing credit unions (CUs) have markedly low churn, at 1.7%. Higher digital adoption, as members demand new tools and services, offers a number of benefits, too: CUs can engage members at the points where they want to be met, namely on digital devices and cellphones.
Read more: Velera Warns Credit Unions of ‘Consumer-Engaged’ Fraud
CUs are prioritizing what matters most to members: security and self-service. The two can go hand in hand. Security can leverage the very notion of the self — where biometric authentication uses the unique attributes of a finger or facial scan to use the banking apps that power everyday financial lives. CUs with proactive innovation strategies, which would include security, and a high degree of innovation readiness, achieve active mobile banking user rates that are 20% higher lesser performing peers. Sixty-four percent of CUs plan to offer biometric authentication or digital identity in the next three years, which still leaves some room for improvement, as roughly a third of CUs are yet to join that biometric authentication pantheon.
PYMNTS Intelligence data shows nearly one-quarter (24%) of consumers say security features are the most important investment for their primary FIs to make in the next three years — a greater share than for any other feature. Given the fact that security features and self-service digital solutions are also the top two priorities cited by 24% and 22% of small to medium-sized businesses (SMBs), respectively, there’s also a need for credit unions to examine how they serve their commercial clientele. Business email compromise and artificial intelligence (AI) deepfakes are all tools in the fraudsters’ arsenals.
The consumers who have, unfortunately, been on the receiving end of fraud attacks are still sanguine about their CU experiences. The data show that last year, a whopping 77% of CU members report being satisfied or very satisfied with how their FIs have handled their fraud situations. That’s up by 14 points from the previous year, which indicates that the tech-driven advances are bearing fruit.
As for the self-service options that are then on offer once the security protocols are in place and all checks out (and members are free to interact with the CU), 55% of CUs surveyed by PYMNTS Intelligence and Velera plan to offer self-service digital solutions in the next three years.
Trust is the glue that binds customers to their credit unions, and biometrics can be an added layer of reassurance that CUs are going the extra, tech-driven mile to increase that trust.
