Originally published on CUinsight.com.
Last week I had the pleasure of attending an eye-opening lecture from one of the financial services world’s most innovative thought leaders, Mr. Brett King, author of Bank 2.0, at the 2012 NAFCU CEOs and Senior Executives Conference. It was interesting to see the reactions of a room full of credit union executives as he explained why the basic principle that many of them have built their credit unions on – that a physical branch is essential to growth and stellar service – is no longer a universal truth. Brett’s point was that computers, smart phones and the Internet have fundamentally changed the behavior of members. That is, how you take care of your financial services is becoming far more significant than where you take care of your financial services.
For some in the room there seemed to be some unease on this point, that we’re entering uncharted territory full of more technology and less physical face-to-face interaction. I know it is different, but is this new business model really all that bad? Does this evolution alter your credit union’s core value? I don’t think so…in fact, it supports the unique value of credit unions. “Change” is not a dirty word.
Throughout his presentation, Brett shared some staggering statistics about the future of membership – what your members expect, and what you should be planning for and implementing now as your credit union evolves. Did you know…
- 1 in 5 people used mobile devices for banking in 2011 and it will be 1/3 of people by the end of this year?
- The average American teenager (your future members!) texts 3500 times a month – that’s more than 100 times a day?
- 70% of Gen Y’ers will be mobile banking in just three years (by 2015)?
- Of the large number of “unbanked” people (60% of the population), over 75% have mobile phones?
- That people check their bank account balances most with mobile (20 times per month) versus at the ATM (3-5 times per month) or even online (7-10 times per month)?
- 80% of members start their mortgage search online?
The list goes on and on. The point here is that the world is changing and your members and future members expect your credit union to change with it. The fast convenience and inescapable transparency that members are now growing up with have become the norm – and waiting in line for a teller is becoming less and less meaningful to newer generations that are accustomed to instant gratification. To them, the old school way of doing things just generates friction. They deposit a check a second after they get it with remote deposit capture. They check Facebook on their mobile phone while on the go and see posts about a great book that their thousands of ‘friends’ are raving about – it just hit the shelves that morning and moments later it’s downloaded instantly to their e-reader. The first place people (your members) go to evaluate their next purchase, service provider and, yes, financial institution is online to reviews and social networks. People are thinking about things much differently and interpret any lengthy process (and when I say lengthy, I mean over just a few minutes…say, the time it takes to write a check) as friction that they try to avoid.
I’m going to be honest here – the last time I stepped foot into my credit union branch was to change my accounts to my married name (after trying and failing to do it online)…and before that…well, I honestly can’t remember. That’s not to say the branch is obsolete as technology grows – credit unions are famous for the exquisite service they provide inside the branch and when members do venture to a branch, they appreciate that it’s there and they received the top-notch service that they did.
But that doesn’t mean they preferred to go there. Maybe there are just certain transactions that are suited for the branch and others more suited for different (faster, more convenient, 24/7) channels. Have you ever asked your members why they came into the branch…is the answer that they couldn’t figure out how to do it online? That famous 5-star service and people-first attitude of credit unions can also be apparent from an easy to navigate website or highly convenient 24/7 mobile access to account information. The core values of credit unions don’t have to change; they have obviously stood the test of time and even the more recent test of economic woes and consumer distrust of other financial institutions. But the way credit unions offer services to members is evolving and your credit union has to be willing and prepared for the changes.
Brett King showed a great video of a 1-year old that couldn’t form a coherent sentence but she could navigate her way through an iPad. Then she attempted to push the words on a magazine page and became frustrated that she was given a “broken” device. At that point the whole room of credit union CEOs and executives knew Brett had it right – there is an evident and fast-moving shift to the expectation of DIGITAL, FAST, CONVENIENT and TRANSPARENT service. Your current membership is moving that direction and your future members are already way down that road.
One takeaway for your strategy is to make sure you have a digital, mobile, online, etc. strategy. Have a presence where your members are (online, in social media, on mobile). My favorite quote that ended Brett’s lecture is — “banking is not a place we go anymore, it’s something we do.” I’m excited for the enormous opportunity this shift in behavior and expectations presents. As they say, the only constant in this world is change, and if you expect to survive for the long-term your only option is to embrace it and evolve with your members.
Post written by Kirstin Orr, Senior Associate Director of Marketing, NAFCU Services Corp.
