Personalizing the Credit Union Experience Can Avoid Members’ ‘Fight or Flight’

Fight or flight.

The classic conflict winds its way through all many aspects of life — even financial services.

Turns out that some credit union (CU) consumers would rather vote with their feet than joust with their financial institutions (FIs) in a bid to get the personal touch they crave, and which is evident in so many areas of online interactions.

PSCU President and CEO Chuck Fagan, First Tech Federal Credit Union Chief Digital and Technology Officer Mike Upton and PenFed Head of Digital Banking Pari Bose told PYMNTS’ Karen Webster in an “On the Agenda” discussion that CUs need to do more to go the extra mile.

They need to get the relevant products and services into the hands (and across the phones) of individuals at the right time. Context, of course, is everything, and CUs walk the tightrope of relevance and intrusion.

Federal Credit Union’s Upton said that during the pandemic, most FIs had a low bar to hurdle.

“Most firms got decent marks just by being able to support transactions — but there was a lack of personalization, a warmth, a connection through the digital channel,” Upton said. “That had not been the focus.”

It’s well known that trust is the glue that binds the member and the CU together. And, indeed, PYMNTS’ own research shows that 39% of CU members cited trust as their primary source of satisfaction with their FIs. That’s in contrast with just 22% of non-CU members who said they trust their FI.

See also: PYMNTS Intelligence: Improving Credit Union Member Satisfaction

But the advantage is tenuous, said the panel. Roughly a quarter of respondents have stated that they’d rather switch than lobby for more personalized digital experiences from their credit unions.

Getting the right message out to the right person is essential, but it’s no easy task in an age of text messages and ads that come at consumers in a seemingly nonstop wave.

CUs, Upton said, have been caught a bit flat-footed as the pandemic has receded at least a bit, and so they’ve had to refocus on giving consumers a bit of extra attention.

That’s a crucial ingredient, agreed Bose, if CUs want to keep their rapid growth in client rosters healthy, and retain the members that went online to bank through the past few years. He pointed to PenFed’s own monthly growth of about 48,000 members to show just how fast some banks have been growing.

The litmus test has been informed a bit by the consumerization of so many interactions, as we’ve become comfortable enough with Uber and Netflix to use them as verbs — and we use those friction-free activities as yardsticks.

“That’s our competition,” Upton said.

To build sticky relationships, Bose noted, “We want to bring in the education, the support and the guidance that the member is looking for — and all of it has to be relevant.”

Crafting Context and Relevance

Fagan chimed in that relevance means giving CU customers consistency across channels and closing the gap that exists between the online and brick-and-mortar branch experiences.

Business is up across all avenues — in branches, online and even with call centers, he said — so uniformity of experience is a winning strategy to keep members loyal. Fagan also noted that the gap can be nicely filled with a combination of data and technology.

Read more: Credit Unions Advance Loyalty Through Innovation

We’re at least partway there, he added, with the rise of offerings like buy now, pay later (BNPL) and the usefulness of fraud alerts and controls that can be set by the consumer on a card-by-card basis, boosting, and self-service models that emphasize individuals’ control.

Running through it all is a constant flow of data — so much data that, as Upton jokingly said, it’s embarrassing. Getting the relevant data to craft relevant CU offerings is hampered a bit by the legacy systems in place at so many banks. Those legacy systems have traditionally operated in silos and have never been conceived to operate in a way that creates a hyper-personalized experience.

But, said the panelists, the wide availability of platforms and data analytics (and PSCU’s insight into 7 billion transactions across its CU roster) can cut across those silos and bring a better membership experience to the front end, to bring relevant services that go beyond selling products and help enrich members’ financial lives. Credit unions can move quickly, Upton said, due to their relatively smaller size and the trust that is already in place with members.

Fagan said payments serve as the connective tissue that binds the consumer to the CU, and mobile is of course part of the equation, too. Checking and deposits have their place, and CUs are now benefiting from forward thinking on provisioning cards into digital wallets and on loyalty programs that align with the commerce that is top of mind and in the moment for customers (including discounts on gas as we grapple with pain at the pump).

“These programs are intended to ease pain points,” Fagan said.

Related: 66% of Credit Union Members Want More Payment Capabilities

Because the CU’s relationship is changing, he continued, measuring the ROI on tech investments must change, too. If the CU tackles personalization in the right way, he said, there’s going to be growth in cross-pollination of services used and enjoyed by consumers, beyond car loans and mortgages.

In the end, noted the panel, the Holy Grail — the single view of the consumer — moves ever closer to reality and shapes an enterprise-wide holistic strategy for the bank itself.

Hyper-personalization and the CU, Upton told Webster, are as inseparable as Ben and Jerry’s, where personalization of a commodity is a hallmark.

As popcorn and movies, said Bose, where the bucket of the buttery treat is what makes the movie an unforgettable experience. As wheels to a car, posited Upton, as personalization of rims and tires makes a car the owners’ unique statement of self.

“Ultimately,” observed Bose, “the expectation from a CU members is that they want to know that we know them.”