How credit unions can use data to drive better digital experiences
Image credit: Sensibill
The ways in which members are banking has changed—and with it, their need for faster, more convenient digital solutions focused on helping them achieve financial wellness.
The pandemic has only served to fuel the shift that members are making to digital banking tools and services—something many FIs have pivoted to meet the demand for. Online banking has grown by 23% since 2020, while mobile banking has jumped up by 30%.
But the window of opportunity that traditional banks and credit unions have to drive engagement and retain members in the wake of this digital shift is rapidly closing. New technology and digital transformation may be providing members with ways to bank from wherever they want, whenever they want—but mobile banking apps and good CX are no longer differentiators for credit unions. They’re table stakes.
Translating the customer experiences and service that credit unions are known for into their digital channels and banking experiences is crucial to helping serve members who have every incentive to turn to big tech and challenger banks for their needs.
The question isn’t whether or not your credit union can pivot, but whether you’re prepared to become more than just a place for members to house their money. We think credit unions can be, and it starts with using data to create better digital banking experiences.
But first, let’s look at why creating digital banking experiences is so crucial to the success of your credit union (and its members).
Credit unions have to know their members to serve them
As spend becomes more digital, it also becomes more fragmented. Members are opting more for digital banking tools, forgoing traditional avenues like branches in favor of online and mobile banking as their spending behaviors and purchase habits change.
The thing is, big tech and alternative service providers already know this and are using digital experiences to learn about members. For example, Google, Amazon, and Amex are using their different payments, receipts, and banking solutions to gather the data they need to understand who customers are, how they’re spending their money, and what they need to do in order to serve up the pertinent products, advice, and experiences to these customers.
When people don’t get this same level of attention and service from their credit union, they jump ship to the digitally-forward banking solutions that meet their needs.
🥵 Just 18% of members consider their credit union to be their primary financial institution
🙏 Up to 80% of members feel it’s crucial for banks and credit unions to offer more customized financial guidance
💳 And 78% of members are happy to share their banking data if they get better banking experiences and services in return
The key to understanding your members really boils down to the data and insights you have around their spend and finances. In order to keep up with the big banks and big tech that are gunning for your members, you need to use your members’ data to better understand how purchase and spend behaviors not only match but also differ between your members, leading to more effective segmentation and personalization.
These data and insights are what will help propel your digital banking experiences so that your members engage with your tools and use them for all aspects of their financial management. Now, let’s dive into three ways your credit union can drive these digital banking experiences.
Image credit: Sensibill
Turn digital banking tools into digital wellness tools
When it comes to financial wellness, big tech and challenger banks are attractive to many banking customers because they focus on empowering them to take action with their finances, rather than simply encouraging them to hold basic spending or saving accounts where they can store their money.
In a way, these tools that encourage members to proactively manage their everyday finances aren’t just banking tools—they’re wellness tools. The aspect of wellness here becomes critical as more members seek out tools that will give them a holistic view of their spend, help them effectively manage their money, and enable them to perform virtually every banking task in one app. This puts financial wellness front and center for members, rather than basic banking products.
And the way to transform those banking tools into wellness tools is through data.
Consider this…
👀 33% of people believe they won’t even need a bank in the future—but what if your credit union was more than just a place to hold their money?
👀 Only 40% of financial institutions offer personalized financial management solutions and advice—your FI has an incredible amount of potential here.
👀 Worldwide, 42% of people who own a smartphone don’t even use mobile banking. There are opportunities for incentivizing would-be members to use your digital tools if they do more than the basics.
Using data can help inform how your digital banking tools function, so that mobile and online solutions benefit members on a financial wellness level, and not just a CX or UX level.
Use omnichannel to help drive personalization
79% of baby boomers and 89% of millennials prefer to use digital banking solutions where they can engage with their finances through tools that allow them to manage their everyday spend and savings.
But digital banking doesn’t just take place in your credit union’s mobile banking app; it happens across a range of channels where members are most active. This means you have to engage members across all channels through rich personalization that provides them easy, consistent, and curated banking experiences.
This is where omnichannel comes in: a seamless experience across all channels that members interact with. You’ve experienced it with shopping apps and streaming services, but it rarely happens in banking. There are a couple of ways in which you can do this.
👉 Use every channel: members should be able to access valuable insights and advice about their everyday spend and savings across all channels—not just through mobile banking apps. From mobile apps to desktop tools, and all alerts in between (think: email and push notifications), these personalized insights should be available at their fingertips (regardless of which device they use).
👉 Choose your timing wisely: promote the right products and solutions at the right time, through the right tools. Knowing what your members are struggling with allows you to personalize advice and solutions at the right time, right when they need help most through the channels and tools they interact with every day. Randomly promoting products to members that don’t fit their needs or the current stage of their financial journey is a recipe for churn.
Image credit: Sensibill
Focus on life stages (and not just milestones)
What your members need from you, and what their financial goals are, will always be in flux. And that means your members will always need you. Now, that demand is a good thing, but only if you can meet it. That’s where life stages come into play.
There’s a strong demand from members for their credit unions to be involved in their financial wellness, and because the journey to achieve this isn’t defined by milestones alone, it’s likely you’ll be a part of their lifelong journey towards financial wellness.
But life stages are a bit more involved. It’s easy to lump them in with major milestones and call it a day—however, life stages are defined by more than material purchases. So where, exactly, do you start?
Start by nurturing your members where they are right now
Your digital banking experiences are the perfect avenue through which you can pair data and insights with financial management to engage members in their financial wellness. Consider that your digital tools could be used to:
Deliver personalized insights, tips, and financial advice that help members make healthier financial decisions
Provide messaging and product recommendations that become more intuitive and tailored to the member
Engage members in managing their spend with receipts, expense management, gamification, and more
Over time, members are better equipped to manage and grow their finances, spending smarter and saving more wisely. Once you've started nurturing members with the right data and insights, you can go on to segment members. This brings me to my next point.
Segment members based on life stage
Segmentation really revolves around customer spend behaviors, which change over time as members enter different life stages. So, it makes sense that your approach to segmentation changes, too.
Segmentation allows you to take what you know and understand about your members and put it into action. It’s the key to personalization, where you can proactively identify customer needs by understanding their life stages, behaviors, and urgent financial needs.
Using your digital banking tools as a foundation, you can take what you know about a group of members and target advice, services, and products to them, all in your apps or tools.
Image credit: Sensibill
Market to different life stages
Members go through different experiences when they’re onboarded to and engage with a new product, feature, or tool—and that experience can differ based on life stages or segments. For credit unions, a lot of marketing happens digitally like, say, directly within mobile tools or web apps.
That’s why understanding your members’ journey and adjusting marketing and communication efforts accordingly is so important. If you communicate the same message and solutions to everyone with no consideration for how your solutions or advice and products will impact different customer segments, marketing can quickly flop. And that same marketing is responsible for ensuring members engage with your tools and, in turn, the help and advice you give them.
Image credit: Sensibill
Is your credit union ready to do digital banking differently?
Meaningful digital banking experiences are no longer nice to have—they’re a must-have. But creating these experiences can be a struggle when customers have been largely left a mystery for credit unions. Deeper data, paired with robust banking tools, can help your credit union drive digital banking experiences that nurture and retain members, keeping you ahead of big tech and challenger banks in the race to serve members’ changing needs. When 57% of members expect their credit unions to help them with their financial wellness, can you afford not to do digital banking differently?
Get even more tips on driving wellness through better digital banking experiences with our credit union webinar 👏
Meet the author, Has 🧙🏽♂️
Has is our Partnerships Director and works closely with each of our strategic partners. He’s spent the last 4 years working in various departments and has only just now, in 2021, watched all 3 Lord of the Rings movies for the first time (back-to-back-to-back).