Credit unions today face a number of challenges and this has even been characterized as being “in an Everything Everywhere All at Once world”. At the intersection of finance, customer experience, cybersecurity, and so forth, as well as economic circumstances, credit unions have a lot on their plate.
One thing is clear, though. Thriving credit unions, small or large, share something in common: a high level of member engagement. In today’s landscape where consumers have several relationships with financial institutions, credit unions have to meet members where they are and better understand their needs, both in terms of features and services, and in terms of trust and relationships.
In this article we explore the impact of member experience on credit union growth and how credit union professionals can leverage member data to build the kind of member engagement that drives sustained growth.
Trends impacting credit unions
Data in this article comes from a Velera report, “CU Growth Outlook: Approaching Member Centricity from the Inside Out” unless cited otherwise.
Member-focused credit unions currently outpace the industry average in asset growth by 131% (MemberXP)
The big picture: Let’s start by looking at the financial industry as a whole. Credit unions make up one part, sharing space with national and regional banks, fintechs, investment firms, and other financial institutions.
A few years ago, in 2021-22, the industry saw a huge rise in consumers going with fintechs as their primary financial relationship (PFR), which was widely considered to be a response to the pandemic.
Today, the rate of change for PFRs has flattened across all institution types, with consumer habits returning to baseline. This means for credit unions that the threat of fintechs has somewhat diminished.
However, credit unions are not out of the woods yet: On average, credit union members have 3x more financial relationships as non-credit union members. This fragmented experience indicates that credit unions are not meeting all of their members’ needs.
Cornerstone League reports in its 2023 Pain Points survey that a key obstacle for credit unions is the ability to leverage member data to personalize offers to their members. Unsurprisingly, many of the other pain points mentioned are related to maximizing this available data.
Consumer behavior is changing
What is important to banking consumers today, anyway? The economic downturn has increased debt and financial insecurity for many people, changing what matters to them when choosing a financial provider.
Trust means something new: For consumers today, trust is not only about security but convenience. Specifically, the ability to complete an interaction on one digital channel has become a major consideration for consumers.
58% of credit unions report data analytics and business intelligence among the top technology investments that they expect to make in 2024 (Velera)
With consumers putting greater weight on interactions, there is a widening distinction between interaction and relationship primacy. A consumer’s PFR may be the institution where they hold their money. But they may seek providers outside of their PFR for services like paying bills, making purchases, and managing money.
Consumers are creating a grab-bag of accounts to achieve different financial interactions. And we saw earlier that this fragmentation is exacerbated for credit unions at 3x the average for other institutions.
Relationships start from interactions, and interactions start from digital enablement. Unsurprisingly, by improving interactions, relationship primacy increases throughout the member lifecycle. Consumers move from making decisions based on interactions to making decisions based on relationships.
Convenience, which is now an integral part of trust, is enabled by digital channels. This is especially true for younger consumers. People in the 18 to 34 age group who are dissatisfied with their current financial provider point to the website or app as the top reason.
Member needs and consumer expectations have become clear over the last few years. Credit unions are in a unique position to build upon their core value offering, which has always been about trust and relationships.
In fact, according to a Filene report, “The Puzzle-Solving Approach That Enables Small Credit Unions to Thrive”, even small credit unions are thriving by sticking to this messaging and building out the digital means to support changing consumer habits.
Putting a member experience strategy into practice
As we saw earlier, most credit unions have already developed some form of member experience strategy. That likely involves surveying members with transactional or relationship surveys, to track KPIs such as member effort score, NPS, and overall satisfaction score.
These measurements can indicate member experience after key touchpoints such as engaging with a branch representative, or they can reflect general satisfaction levels compounded over many interactions. They are an example of structured data.
Unstructured data is the real goldmine, though, and data analytics platforms enable credit unions to dive into this data. We see more and more credit unions investing in this kind of BI technology because it yields actionable outcomes from leveraging member data.
With a text analytics platform that aggregates and analyzes open-ended responses from members, credit unions are able to:
✅ Unify data sources like surveys, contact center tickets, call transcripts, and so forth. Credit unions can get a holistic view of the voice of the member or analyze channels independently when necessary.
✅ Identify member sentiment around features, services, and experiences. This is the crux of a member experience strategy that aims to understand member satisfaction.
✅ Monitor trends in consumer expectations around topics like trust, convenience, and digital enablement. Member surveys can reveal broader trends about banking consumer behavior that are important for credit unions to stay on top of.
✅ Pinpoint root causes of issues such as why credit union members look to external providers to complete certain interactions, as seen earlier. Credit unions must consider the source of this fragmentation rather than simply releasing products and services without taking the time to understand customer mindsets.
✅ Segment members with metadata and sentiment analysis. For example, analyzing individual age groups or lifecycle segments to better understand how to personalize offers to these members.
Keatext supports the end-to-end work of anyone involved in member experience, whether in an analyst or manager role. On top of all the benefits covered in this section, Keatext automatically understands the context of your credit union, tailoring insights to your business situation and providing AI-based recommendations on what you can do that will have the greatest impact on member satisfaction.
This is an exciting time for credit unions to take advantage of momentum in the industry and reinforce their unique value offering as financial institutions that are truly committed to the quality of relationships with their members. By partnering with Keatext, you can strengthen the implementation of your member experience strategy.
Sales material: Download Keatext’s deck for credit union member experience that you can share with your team or manager.