New technologies have given financial institutions opportunities to reach consumers in a wide variety of ways. While some consumers prefer traditional banking practices, like face-to-face visits and check writing, others are more drawn to mobile banking and other technologies.
The millennial generation is the primary driver of these innovative strategies, and it's becoming increasingly more important that credit unions and other institutions take note of younger consumers' preferences.
According to a study by Morphise, a legacy-to-cloud software company, 92 percent of millennial respondents said they would choose their financial institution based on online services and software. In other words, credit unions stand to lose the majority of their younger member base if they are not able to provide modern digital services.
Improving an institution's offerings is a process, and it's important that credit unions take the right approach to ensure the right services are available to consumers.
Update the brainstorm and research processes
The first step to deciding which services to improve or adopt is to do research. But as American Banker pointed out, services are not the only area that credit unions need to update. The actual creative and research processes are evolving as well.
Having an idea of a service that a credit union wants to offer is a good first step, but unless the institution knows it is possible to develop and deliver to its member base, it's not worth much. Credit unions need to make sure their current software and infrastructure can support the development and expansion of the new offerings.
Once a credit union knows that creating a new digital service or product is feasible, it must develop and test a prototype.
The traditional way to determine what consumers want is through focus groups and surveys. While there is a good deal of value in these research methods, in some cases they aren't the best ways to obtain real consumer sentiment. These methods can seem impersonal to the average consumer who wants to know his or her opinion is valued.
A more modern way to gather consumer feedback is by hosting intimate, hands-on experiments. Small groups of consumers use a prototype and explain what they like or don't like about it. Using this feedback will give the credit union greater insight into the specific concerns members have.
Above and beyond
Simply offering new digital services is a good start, but there needs to be further efforts beyond that. In one respect, this means ensuring all services are completely secure. While most millennials say they prefer institutions that offer high-quality online services, fewer than 10 percent would trust their bank or credit union if they knew their software wasn't up to date.
It's important that each and every transaction is secure. Consumers have heard far too many stories of stores getting hacked and consumers' identities and financials being put in jeopardy for them to trust an organization that doesn't keep its software updated.
In another respect, going above and beyond means implementing digital services in more than one way, such as making them available through a mobile app but also at a physical branch location.
Writing for American Banker, Rob Aulebach, ATM channel and retail distribution executive at Bank of America, pointed out that branch visits are decreasing, but that doesn't mean brick and mortar locations are becoming obsolete. Every day, consumers make their way to branches to accomplish banking tasks. However, many services done in person can also be accomplished online.
One way to meet consumers halfway is to downsize locations and expand the technology available at these branches. Interactive Teller Machines, which are essentially ATMs with greater offerings and two-way video and audio abilities, allow consumers to consult a banking assistant about tasks completed on the machine, and enable institutions to offer extended customer service hours at minimal cost.
As consumer preferences change, it's important that credit unions stay current on what their members really want from their financial institutions. Without this knowledge, credit unions run the risk of alienating younger members, which will one day make up the majority of their member base.
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