Technology is driving the financial services industry. This includes credit unions. The emergence of fintechs and other non-traditional financial services companies are helping to push this momentum. Consumers can now handle all their financial matters online. Square, PayPal, Ally and even Amazon are offering consumers and business owners alternative deposit and lending options. Credit unions must compete not only with the competitor down the road but those in other states. While this is a challenge, it is one that credit unions can overcome with the help of a key advantage. Credit unions have an advantage over larger banks in that they know and understand their members’ wants and needs.
Is User Experience Really That Big of a Deal?
According to Amazon Web Services, 88% of online shoppers say they wouldn’t return to a website after having a bad user experience. In another survey by Comnio, 85% of adults think a business’s mobile website should be as good as or better than its desktop equivalent. This is where a credit union can leverage its advantage of knowing its membership. One of the worst experiences I had to address as a branch manager was a customer complaint about our website or mobile banking. What made it harder was that I agreed with the customers. Think of the reputational damage that can cause. If a member isn’t happy with your website or mobile app, will they be happy with you? According to these statistics, the answer is no. This is especially important as Millennials and Gen Zs grow older and enter the marketplace. These are generations that grew up with technology. Consumers expect to be able to handle all their financial needs through the use of their mobile devices or computer. They do not want to go to a branch and wait in line to deposit money. They want the convenience technology provides.
What About Our Staff?
This extends to your staff as well. Is your staff happy with your technology offerings? This can be a good gauge of whether your members are happy. If your staff struggles to understand how your website or mobile app works, chances are your membership does too. I remember working at one bank where the systems were siloed and disconnected. Depending on what information you needed dictated what system you used. It was not uncommon to have 4 or 5 different systems up on my screen for one customer interaction. I would routinely ask the question, “with technology today, why is it so difficult to get the information we need”. The answer was always the same, the bank didn’t want to invest the money for better systems. This same bank purchased another bank with better systems and customer friendly online banking experiences. This was replaced with my banks systems. The result was as you would expect. Onboarding employees from the other bank struggled to learn the new systems and customers left because they felt the technological services offered were a step backwards. Yet, at a smaller credit union I worked for, the systems were far superior. The core deposit system provided for paperless transactions. The online and mobile apps were easy to use and member friendly. Every member walked out of the credit union with online access. This credit union was even able to provide services offsite. I remember one of our financial specialists driving out of town to a CUSO to open accounts. She was able to take deposits, offer financial advice and even accept complete loan applications. All of this was done on a tablet. Was this credit union bigger or had more money than my previous bank? Not at all. They just knew their membership better. They invested in quality technology that served their members needs. It resulted in better service and higher member retention.
User Experience or User Interface
This comes down to user experience. Both user interface and user experience are important and should be addressed. While user interface has been a focus for several years, user experience is now becoming more of a priority for financial institutions. With statistics showing the importance, credit unions should focus on user experience to help drive technological initiatives. Web page design and ease of mobile devices are important drivers. Members want an easy experience. Credit unions are proud to have members that have been with them for 20 or 30 plus years. Older generations do use mobile devices and are becoming more technological literate. As a result, it is key to have easy online systems that are not confusing.
Credit unions pride themselves on knowing and understanding their members. Ask any credit union professional the difference between banks and credit unions and one of the answers is “they have superior member service and are focused on members more than banks.” This is one of the strongest assets of a credit union and should be leveraged as much as possible. Especially in technology.
This post was originally published by Charles Schwab (Analyst at Capstone) on CUInsight.