Online Checking – Top Tips for Reaching Members in 2021
With news of COVID-19 vaccines around the world, the unprecedented health crisis that shook the globe over the last year may be inching towards an end. Yet the unexpected lockdowns transformed nearly every industry and a return to pre-quarantine business-as-usual may not be possible. Credit unions were greatly affected, as much of their business model centers on in-person transactions, personalized service and a physical location in their community. Exploring the lasting impact of COVID-19 on banking can help institutions understand what to expect for the rest of 2021 – and beyond.
The Biggest Change for Consumers
During the first half of 2020, members were suddenly forced to adapt to various lockdowns with no clear answer on when regular service would resume. This meant that even if they had little interest in digital banking and solely relied on in-person transactions in the past, they were forced to change their behavior due to these exceptional circumstances, such as by downloading their financial institution’s mobile app. While mobile and online banking was already on the rise, this situation accelerated this shift to new heights.
Will Consumer Behavior Revert After the Pandemic Ends?
Many industries are hoping that the moment the pandemic officially ends, consumer behavior will return to exactly how it was pre-2020. But don’t bet on this. Due to lingering concerns regarding safety, or even the new convenience remote banking has brought, some members may balk at the prospect of entering a credit union again. Such sentiments are understandable as certain areas experienced cycles of openings and closings, forcing consumers to find alternative methods of banking. It’s likely that even when COVID-19 is well under control, consumers may already be comfortable with their new digital access and be unwilling to revert their behavior. Though this sentiment will not apply to all consumers, even the idea of losing a segment of regular members is cause for concern.
Can the In-person Experience Be Replicated Online?
A significant concern for many credit unions is that their unique experience cannot be easily replicated in the digital space. This is understandable as on the surface, an online experience can be rather impersonal. However, in 2021 and beyond, the alarming fact is that credit unions will need to find a way to translate their brand to the online space effectively or risk losing their members, let alone attract new ones. Consider that some of the most popular brands that community institutions compete with have no physical locations but maintain a loyal clientele. Of course, branches will not disappear anytime soon, but they can no longer be the primary focus of an institution’s strategy for consumer engagement.
The ‘Amazon Effect’
The online shopping space exploded during the pandemic, as many turned to ecommerce as a necessity. The convenience, speed and options available in this medium may condition consumers to expect this level of digitization with all of their brands – even their financial institution. While that may be unfair to financial institutions that have greater regulatory constraints and wildly different services, it remains an unfortunate fact that today’s consumers will have less patience for a poor online experience because of the innovations available elsewhere.
3 Keys to Reaching Members Post-Pandemic
Since consumer expectations shifted throughout 2020, strategy must also change if a credit union wishes to retain and engage members. Critical things that credit unions will need to consider include:
1. Personalization: It’s important to understand what members want and to find the best way to deliver an impactful message. For instance, the demand for international payment services for both personal and business purposes is growing, but a number of credit unions limit these types of transactions to in-person requests only. This means their members must physically visit a branch to access these products, which is increasingly inconvenient. Going forward, financial institutions may need to remove barriers and manual processing or risk losing members or customers.
2. Data-driven decisions: Can you describe your member? Most users will interact with their financial institution through various channels: Online, in-person, through social media and more. To better predict behavior and meet demands, credit unions should utilize a complete view of their data to gain a thorough and full view of their base to uncover revenue generating opportunities. Especially today, there is no longer an “in-person customer” or “digital user,” rather they are both.
3. Optimize: Similarly, leaders should ensure communication across all platforms – so members have access to information regardless of their preference of channel –and design processes that allow any action taken in a branch to be performed in other channels (such as online or through telephone and mobile banking). In fact, those that embrace an omnichannel experience could retain more members than those that ignore this factor.
Why the Demands on Financial Institutions Are Higher Than Ever
After spending much of 2020 confined to their homes, consumers from all industries learned to rely on the digital capabilities of their favorite brands, including their financial institution. This shift is a cause for concern for credit unions that are well-known for their personal approach but less for their digital innovations. Yet it seems that consumers may be adopting new technology for banking during the pandemic with few plans to return to their previous actions. This means that financial institutions that wish to retain their base should mirror their celebrated offline experience with their digital one. Those who do not may struggle to keep their once-loyal clientele.
Stephen Kuhl, CFA is Head of Financial Institutions and Strategic Partnerships for Western Union Business Solutions in Denver.
Online Checking – Top Tips for Reaching Members in 2021
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