Since most members interact with their credit union (CU) about 100 times per month, innovation in payment solutions is the greatest product or service offering that CUs can use to prevent no-shows. members, Brian Scott, senior vice president and chief growth officer at PSCU, told PYMNTS in a recent interview.
Whether these interactions are done through some sort of payment device, through credit or debit card payment, writing a check, completing an ATM transaction, or using bill payment, these daily contacts are an opportunity. major retention and acquisition.
“So making these personalized, simple and secure payment options is really important,” Scott said. “This is where, in my opinion, credit unions should be focusing on avoiding this real loss of a member – not just putting it in the moonlight and trying another solution, but the real losses.”
Most members moonlight
He noted that many members of credit unions work in the moonlight trying other options in the market and exploring that experience. Most consumers have a second account somewhere, maybe because they got a better mortgage rate or a better car loan rate somewhere.
Indeed, 55% of members of credit unions have used a product or service from another bank or financial institution, according to the Credit Union Tracker produced by PYMNTS, in collaboration with PSCU. Scott noted that this figure has been over 50% for some time.
“I don’t know if we are necessarily going to prevent [members] to try [competitive offerings] or moonlighting, but I think we can prevent [them from] really taking all their stuff elsewhere, ”he said.
Credit unions prioritize innovation budgets
The Credit Union Tracker also found that 66% of credit union members want to take out a second mortgage with their credit union, but no credit union surveyed was eager to innovate in second mortgage products to increase the retention of limbs.
“First of all, it’s a big compliment to these credit unions that 66% want to take out a second mortgage with this credit union, and that may actually mean that the credit unions are doing well in this space,” Scott said.
He noted that every credit union needs to prioritize its innovation budget, and many prioritize auto loans or payments and cards. So there may not be a need to innovate or create additional technology around second mortgages.
Omnichannel approach increases member satisfaction
Another area where credit unions do well is member satisfaction with the lending experience. A study by Fannie Mae shows that 93% of recent homebuyers are happy with the credit union lending experience, compared to 90% for traditional banks and 85% for mortgage banks.
Scott said credit unions have taken an omnichannel approach that merges the branch experience with personalized digital tools, so a member can start in a digital channel and end in a branch or vice versa. Many also use artificial intelligence (AI) -based decision tools that allow them to close loan transactions in seconds.
“Whether it’s digital, online, in person, in an agency, it doesn’t matter – that experience, that omnichannel experience, is the same,” Scott said. “I think that’s where the credit unions did a really good job of mixing them up.”
He added that for AI-based decision tools to work well, they need good, clean data. This gives credit unions a competitive advantage.
“Credit unions have years and years of data, they have a long history of data with their members, where a lot of FinTech solutions, because they’re just getting started, they don’t have this rich data set of solutions. Scott mentioned.
Call center volume remains high
Another way for credit unions to compete is by using digital tools to reduce call center volume without sacrificing member satisfaction. The Tracker found that call center volumes increased during the pandemic and remain higher than they were before the pandemic.
Scott noted that the pandemic has dramatically reduced branch traffic and caused a whole new generation of credit union members to get used to interacting on the phone. This is another opportunity for credit unions to deliver an omnichannel experience.
He pointed out two technologies that can help here. One of them is PSCU’s Unified Agent Desktop, which allows a single agent in a call center to easily answer a multitude of questions and provide a wide range of services. The other is caller authentication, which provides additional security by validating the member by their voice, the phone number they are calling from, and their experience with the credit union.
Digital tools reduce core questions and enable valuable conversations
Scott added that digital tools provide members with information about transactions, such as their balance, so people are now calling with more complicated questions about how to manage their life-long financial journey. These are, he said, the conversations credit unions want to have with their members.
“I think that’s the real advantage that digital tools have enabled; they allow credit unions to have these really valuable, high impact, high impact member conversations, ”Scott said.
Looking at the big picture, Scott said credit union members continue to increase their spending and use of both credit cards and debit cards, and “it speaks to a level of confidence. Continued that members of credit unions have – both… credit unions and… the economy moving forward.