Canvas Credit Union On Providing Digital Banking Services For All Generations

Digital banking has become such a large part of the way consumers do business that for some, it has nearly done away with the need for banks and credit unions to have a brick-and-mortar presence.

Financial apps and the mobile devices on which they operate are so ubiquitous that many younger consumers have never set foot in front of a teller to make a deposit or apply for a loan. Credit unions must maintain face-to-face banking for members who are accustomed to the traditional, personalized services they offer. Nevertheless, CUs must balance this with adopting more advanced digital services that meet the needs of clients who prefer not to step into a financial institution.

“Millennials and Gen Zers seek instant gratification, so using the services they signed up for should happen on the fly,” Damian Jakubczyk, vice president of digital innovation for Denver-based Canvas Credit Union, told PYMNTS in a recent interview. “On the other end of the spectrum, more mature generations are homing in on ease of use, so the experience of those applications should be almost self-explanatory.”

Credit unions have been especially under pressure to compete with larger financial institutions (FIs) as well as nimbler FinTechs. As not-for-profit institutions, CUs must balance fees, interest rates, personal service and profits. Therefore, this can often lead to having less capital to invest in digital transformation than their profit-minded counterparts.

“Credit unions have to get better across multiple fronts to serve those members that FinTechs specialize in and try to grab,” he said. “Seamless experiences continue to be front-of-mind, as well as using the rich data that we have and putting it to good use to create that personalized member experience.”

The unique digital needs of different generations

Jakubczyk said that credit unions’ historical identity is that of the smaller, local banks down the street that older members enjoyed because of the personal interactions offered — and CUs should work to continue to take advantage of the physical presence. At the same time, younger consumers are used to instantaneous and remote services for opening accounts, applying for loans or buying cryptocurrency with little friction.

While more mature generations have embraced technology to help make their digital banking more convenient, many are still not comfortable with using it. Jakubczyk believes that CUs can play the part of educators to help clients understand how to use digital tools to their advantage. He said that representatives at Canvas, for example, are available to meet with members and walk them through the steps of using digital tools, whether on their phones or other devices, to help them complete transactions.

“When it comes to trying not to alienate our memberships, especially our older generations, we stand shoulder to shoulder with those members that require the additional assistance,” he said. “The key is that we’re not preaching to the member but really having a two-way dialogue. We’re teaching the member while allowing space for learning and addressing their specific needs.”

Credit unions and the future of digital technology

Financial technology and what members expect from it are evolving quickly, and Jakubczyk said that credit unions need to be cognizant of what they can and cannot offer right away. For instance, while it is crucial to provide digital capabilities such as bill pay, instant transfers and no-wait account opening, technologies that allow transactions using cryptocurrency may have to wait a while.

“Bitcoin and the underlying blockchain is a technology that has been disrupting or at least challenging the payments industry. We need to recognize that the new standards these technologies set compete with some traditional payment rails that exist today,” he said.

Another issue that he says will impede cryptocurrencies is liability. NCUA regulations insure most credit union deposits, for instance. Given that cryptocurrency is highly speculative, what happens if a member loses that money? Is the credit union responsible, and what will that do for the reputation of the organization?

The future of CUs competing with traditional FIs, Jakubczyk said, may lie in their ability to partner with FinTechs that have the same mindset and culture of serving members. Such partnerships can provide the technology infrastructure that meets member needs without requiring significant capital investments. In the meantime, CUs must continue to serve memberships the way they always have — but with an eye on improving the member’s digital experience.