How Digital-First Credit Unions Can Break The Impersonality Barrier

The financial world has become more and more entrenched in digital channels, much to customers’ delight — 59 percent of FI consumers want to open banking accounts online rather than do so at a branch. That number is higher among millennial and Generation X respondents, at 77 percent and 63 percent, respectively. Nearly one-third of millennials would prefer to do their banking exclusively online and eschew branch locations entirely. Digitally-focused CUs are reaping the rewards of this market demand and saving money by limiting the number of branch locations and ATMs that need to be maintained.

One power player in the digital CU space is Chicago-based Alliant Credit Union, which was founded in 1935 as the United Airlines Employees’ Credit Union. It exclusively served United Airlines employees and their families, but expanded its member base in 2003, making it the eighth largest CU in the U.S. and the largest in Illinois with more than 450,000 members and $11 billion in assets. Alliant maintains one publicly accessible branch location and conducts the vast majority of its business online. This has not been without its share of challenges, according to Allison Videtti, the CU’s director of marketing. Digitally focused banks can incur an aura of impersonality, a challenge Alliant meets with personalized customer engagement and a far-reaching social media strategy.

Does digital banking sacrifice personal touches?

One of the biggest challenges to Alliant’s digital-first strategy is the “Amazon effect,” named after the eCommerce giant that has been disrupting the retail space for 20 years. Amazon’s ease of use and near-limitless offerings have spoiled customers with impossibly efficient online experiences.

“People are used to having the right thing in front of them at the right time,” Videtti explained. “They’re used to being able to quickly log in, get what they need, get out and have more of a transactional relationship.”

This approach is an efficient use of time and resources for both Alliant and its members, but it is a double-edged sword. Quick, transactional relationships have caused some members to feel as though the financial industry is losing its personal touch, she said.

“[Although] you’re interacting mostly with our app or with a computer screen, rather than with a person in a branch, [banking] is still a really personal experience,” she noted. “Even as technology becomes more important and things like machine learning and AI get more integrated into member experiences and banking in general, it’s really important to remember that it’s people, and it’s their money and that money is really important to them.”

Social media for member engagement

The key to countering this appearance of impersonality is outreach, Videtti explained. Members want to know that their finances are being looked after and that algorithms are not the sole governors of their savings. One of the most important aspects of outreach is social media.

“We’re positioning ourselves as a resource — for members and for nonmembers — for educational financial content,” she said. “We focus on sharing content that helps them learn more about how to manage their finances and how to bank with us. We start to build a relationship with them over time — whether it’s members or non-members — so that we stay in their mind.”

Moderation is important, however, as spamming can turn consumers off. Social media enables actionable feedback from members, granting CUs insight into which posts people are clicking on and which ones result in visits to their websites.

“Rather than just blasting the same message out across all of our channels, we’re really strategic about what content we’re posting when on which channels,” Videtti said. “Within social channels, we’ve really taken a look at who are the people that are on those channels, and the content that they’re interested in. And then we can tailor the content specifically to those channels and those audiences.”

Social media for customer service

Customer engagement on social media is more than just clicking on posts, however. Many Alliant members proactively reach out over social media to have their issues addressed and resolved.

“We want to meet our customers where they are,” Videtti said. “Often, they’re engaging on social [media] and finding it easy to just reach out and ask a question via Facebook or Twitter. [We] make their [lives] easier in that way, so … we’re not making them call us or email us and taking them out of their preferred channels.”

Social media is often used to respond to individual inquiries, but Videtti believes its hidden strength is that it can aggregate customers’ feelings. Each interaction forms a data point that Alliant uses to make holistic changes to the CU.

“[If we] start to see that a lot of people are complaining about a certain thing or a lot of people are happy about a certain thing, we collect that data,” she said. “Then, we make a process or product improvements based on the data that we’re collecting.”

A CU as large as Alliant needs to stay nimble to adapt to the changing digital ecosystem. FIs would be well-served by expanding their customer engagement strategies to counter the impersonality that consumers may be feeling. The digital banking industry is more competitive than ever, and such personal connections go a very long way.