Cobalt Credit Union’s Data-Driven Innovation In Member Services

Modern credit unions understand all too well that loyalty innovation is critical to staying in business, and that those that do not prioritize it risk losing a significant share of their members. Loyalty-based innovation is a top concern for many credit union (CU) members, as outlined in the latest Credit Union Innovation Playbook. It found nearly 40 percent of them would consider leaving their current CUs because the financial institution provided inconvenient services or was unable to address their problems and data security concerns, among other reasons.

Given the high stakes, it is clear that credit unions must pursue the innovations members value most. This leads to a challenging question for CU decision-makers: Which loyalty innovations will deliver the greatest returns on investment? Some credit unions are going right to the source to understand their members’ innovation preferences. This includes Cobalt Credit Union, a CU with 26 locations across Iowa and Nebraska that holds more than $1 billion in assets. The right mix of member engagement and data analytics is among the most effective ways to understand the innovations members will value, according to Cobalt Credit Union President and CEO Gail DeBoer — and to determine which will deliver the highest payoffs.

DeBoer recently spoke with PYMNTS about how Cobalt’s communication and data analytics strategy informs its innovative pursuits, including its recent move to implement interactive video services through its web and mobile channels.

“Technology is not cheap,” DeBoer said. “You want to make sure the things you are buying and implementing are meeting whatever members have told [you] they like.”

An Interactive Innovation

In early July, Cobalt introduced an interactive video banking service for its web and mobile channels that enables members to engage with the CU in real time. The interactive solution allows them to perform a wide range of banking transactions, including applying for loans, opening accounts and holding real-time conversations with members using web and mobile-based interfaces. These services can help change long-held perceptions of credit unions, DeBoer said.

“Credit unions have a reputation for not investing in technology as readily as the big banks,” she explained. “This [technology] shows we can compete with our banking counterparts. I don’t think that’s always been the reputation CUs have had.”

DeBoer added that the video banking service can be accessed via smartphone, and that Cobalt staff are available to train members on how to use it. Rural members may find it especially helpful, because the connected video technology can spare them from traveling miles to the nearest branch location to conduct financial business. Access to services via web and smartphone also enables Cobalt to more effectively engage with its member base.

“Our members really like that face-to-face contact,” DeBoer said. “They want us to know them, and they want the ability to have that person-to-person relationship. This really solves that problem.”

Gleaning Data Directly From Members

Cobalt is eager to hear directly from members as it works to deliver the more personal relationships they want, DeBoer said. The CU conducts an annual survey featuring more than 100 questions to gain deeper insights into the state of member relationships and how they transact with the credit union.

“We ask our members often how we are doing and how we’re meeting their needs,” she said. “That’s important to continuously have that feedback.”

Receiving insight from members helps the CU determine the types of innovations that will deliver the highest return on investment.

“There’s no reason for us to implement something that nobody’s going to want,” DeBoer explained. “Asking them what they want is really important, [because] then [we can use] that to set our strategy.”

Cobalt plans to more heavily invest in data analytics in the near future as part of its broader innovation plans, she said. The goal is to use the data to better understand who its members are, what they are doing in their financial lives and how the credit union can help them make more informed decisions.

“We want to make sure we target [members] where they’re at in their life stages, where they’re at financially, and present them with things that are beneficial to them,” DeBoer said.

She urges other credit unions to take the time to understand the nuances of data analytics as they pursue their own innovation agendas.

“You can’t go half in,” DeBoer said. “You have to go all in with data analytics and really understand what you’re doing with it. That’s been the biggest conversation with CEOs, is [understanding] what [you are going to] do with it.”

Having access to this kind of information and using it to drive loyalty innovation strategies can help CUs find the most effective opportunities to provide assistance to their members. Those that invest heavily in the technology and solutions that provide enhanced communication — and ultimately more insightful information on how credit unions can best serve their members — could stand apart from the pack, especially in an increasingly competitive financial landscape.