Why the Country’s Second Largest Credit Union Is Finally Going ‘All In’ on Digital

Consumers now have more options for getting loans, making deposits and transacting across digital channels. And they also have higher expectations based on the type of digital experiences they receive from their preferred brands, including travel, fitness, payment and social media.

Their expectations are no different for their financial services providers.

And as a result, credit unions are facing more competitive pressures than ever, NCR Digital Banking President Doug Brown and Jim Hayes, president and CEO at North Carolina State Employees’ Credit Union (SECU), told PYMNTS’ Karen Webster.

SECU, in particular, has seen the impact of these evolving and higher member expectations, with more members preferring to interact through digital channels.

SECU is the second-largest CU in the country, and as Hayes noted, members state time and again in consumer surveys that they’re loyal, stalwart supporters who trust the credit union to give them the financial services and products they need.

But the data has proven otherwise, revealing that SECU members are transacting with other, more digitally focused, financial services providers that offer the services and experiences they expect.

“Historically, digital had not been a big part of our focus,” Hayes said. “And we started to see members move ‘away’ from us to do business. They were getting loans elsewhere and moving deposits elsewhere.”

SECU — with 2.7 million members, $50 billion under management and an 85-year operating history across North Carolina — faced a key question: How to get those members back? A goal of any financial institution, SECU included, is to become the primary institution for members. But, as Hayes said, there’s the reality that more members are using multiple providers to satisfy their daily financial services needs, so meeting as many member needs as possible is an important strategic undertaking.

“We need to give them products, service and delivery channels that are appealing … so they’ll use us for more transactions and payments,” he said of these members. The fact that consumers can — and do — conduct business with firms from anywhere, just so long as there is an internet connection handy, means a retooling of the SECU model is in order.

“If we don’t provide those same options,” he said, “we’ll get left behind. … We need to meet people where they are.”

Meeting Members Where They Are — Digitally

To be sure, the credit union business model itself has endured the turmoil of recent months that has been the hallmark of the banking sector (only 9% of SECU’s deposit base is uninsured, so there was none of the existential crisis that marked other firms). But the time is ripe for building the digital services that will continue evolving as members’ financial needs evolve.

To that end, SECU embraced a new strategic plan focused on member and employee experiences. In the case of consumer-facing initiatives, SECU will be broadening the digital and physical channels available to members. In the case of the latter, the focus has been on giving employees the technological tools in the back office. Behind the scenes, they can glean data-driven, real-time insights into SECU member preferences as they transact on their phones and bring digital experiences into the branch setting and how to meet those preferences.

To aid in turning the board of directors’ strategy into reality, SECU said last month that it is working with NCR to modernize operations and its digital banking efforts. The CU — after a yearlong due diligence period — is leveraging NCR’s digital banking platform to expand its mobile and online banking operations, specifically through NCR Digital Banking, a cloud-native, API-based platform, complementing its 274 brick-and-mortar branch footprint.

NCR’s Brown said that the digital enhancements are not meant to replace branches but to enhance the overall member experience — and thus, retooling is not a wholesale revamp. “Members want to be able to visit a branch but also want to be able to do business with the credit union over their phone or tablet,” he said.

Indeed, as Hayes said, there’s no desire to convert SECU into a digital-only credit union — a revamp of the digital presence and expanded in-app capabilities will build on the branch settings that have been mainstays of credit unions across the country.

“SECU’s 100-county footprint is a part of our strength, and it is one of SECU’s primary differentiators,” Hayes told Webster. “We’re going to continue to have branches and make the member experience within the branch smoother, faster and more seamless with greater digitization.”

The joint efforts between SECU and NCR, said Brown, are proof positive that SECU will need to be bold in setting initiatives that will help them stand out amid a swarm of competitors.

Credit unions may have been around for decades, but longevity is not guaranteed.

As Hayes noted, with NCR’s input, “We’ll meet our members where they are, whether they want to come into a branch, call us on the phone, or just simply stay in their home and work with us through a digital app. We want to be able to do all of that.”