CUNA Mutual Group: 3 Near-Term Strategies for Digitally Transforming Credit Unions

Without question, the multi-year plan still has its place – even amid today’s unprecedented pace of change. After all, long-term planning is how leaders put meat on the bones of their vision.

At the same time, visionaries must also be nimble, pivoting to take advantage of emerging technologies and market opportunities. Executing the following near-term strategies can set the table for adaptability without letting shiny objects pull teams too far off course.

1. Reexamine your competitive advantage

Many credit unions believe member service is the core of their value proposition. In fact, when CUNA Mutual Group surveyed credit union leaders in Q2 2021, 41 percent of respondents said member service was a top-three source of their organization’s competitive advantage.

How many of those credit unions’ members would say the same? If you believe the data, fewer of today’s members feel their credit union is providing great service. It’s no secret credit unions have been trailing banks in customer satisfaction for several consecutive years. Yet, many credit union leaders continue to contend that member service is their greatest strength.

Credit unions that believe their advantage is member service yet find evidence to the contrary may want to reexamine their perceived advantages. That investigation starts at the very top, by checking on the relevancy of the credit union’s purpose, mission and vision. Are they still aligned with what members need?

From there, strategists can identify the areas in which the credit union must win to reach its North Star.

2. Ferret out points of friction

Even though credit unions are building out digital capabilities, many digital experiences are still filled with friction. Members are finding it harder to understand information about their accounts (down 7 points from 2018 to 2022) and harder to make changes to their accounts (down 6 points from 2018 to 2022)1. Strategists would do well to turn their immediate attention to those areas, looking specifically into how easily a member can move across channels.

Keep in mind that digital banking is not only for younger members. Anecdotally, I have a friend in his early 60s who could barely operate a smartphone prior to the pandemic, nor did he want to. Today, he’s much more comfortable with the supercomputer in his pocket.

Consumers of all ages increasingly expect to easily complete routine tasks, such as checking balances and moving money, through digital channels with little or no friction. They also expect seamless engagement across channels. Take my friend, for instance, who still very much appreciates face-to-face interaction. If he runs into issues with an online loan application, for instance, it should be easy for him to visit a branch and pick up in person where he left off online.

the more complex transactions aside for the moment, credit unions that focus on meeting expectations for routine banking tasks will be best positioned to win the loyalty of today’s members.

3. Partner to acquire key digital capabilities

Credit unions must present solutions to members’ problems, challenges, and needs. Fostering and maintaining a trusted relationship is key to achieving success. Enabling digital solutions that reduce disintermediation by placing credit unions at the beginning, middle, and end of the member buying experience is at the core of this approach.

The solutions that credit unions employ must enable an end-to-end experience that includes shopping, contracting, and funding. As institutions align to deliver these capabilities, they will likely partner with technology providers to enable digital tools that support these functions. These partnerships can allow credit unions to operate with competitive force and ensures the fast delivery of experiences that support today’s diverse member base, in their greatest moments of need.

Improving member experience

Consumers are selecting their primary financial institution much differently than they have in the past. Member experience is everything. By improving member experience, credit unions can keep pace with fast-changing expectations and help increase member satisfaction. The near-term strategies described above are well-equipped to help credit unions do just that.

¹ American Customer Satisfaction Index (ACSI) data, 2022, https://www.theacsi.org/industries/finance-and-insurance/credit-unions/

By Steve Heusuk, Director, Competitive & Market Intelligence, CUNA Mutual Group

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