Leaving Credit Unions Behind - Blog

Please Wait a Moment
X

Blog

31Jul

The Digital Transformation Revolution – Is It Leaving Credit Unions Behind? Part 1

The Digital Transformation Revolution – Is It Leaving Credit Unions Behind? Part 1

 

How the heck are CUs going to keep service and price advantages during the Digital Revolution!


 

One hundred percent of the retail world is going digital! While we may have slightly exaggerated that statistic, it is worth noting that only 50% of credit unions have a written and documented digital strategy. Compare this to the Financial Brand findings that 79% of banks are executing on a digital strategy and that 76% of millennials prefer mobile services over other channels. You can see why only half of the credit union industry planning for a digital future isn't nearly enough. 

 

A revolution with this level of paradigm shift requires a strategy which aligns service, operations and technology and an ability to identify and manage change. The digital revolution is also an unprecedented opportunity for credit unions to grow and compete. Embrace the positive and credit unions can compete and win across new markets and products that the industry could never have served in a retail banking world dominated by branches. 

 

Interestingly, almost two-thirds of the surveyed credit unions have a digital roadmap, but only 50% have a strategy. That suggests that 20% of the credit unions have roadmaps, but may not know what direction they want to head on the digital highway. Weird, right?

 

A few key questions can help you determine if your credit union has a strategy or simply a project roadmap. 

  • When a decision comes down to investing in a branch or investing in digital, do both get equal consideration? 

  • When looking at lending, do you see it as a digital platform for end-to-end interactions or as a better way for members to apply for a loan? 

  • Finally, when opening an account, does compliance win the day requiring manual intervention or, worse yet, branch visits or does frictionless service trump the old-school thinking?

 

Strategy drives performance, whether it is digital or any other retail model. Alignment creates execution and winning performance. If you are truly committed to winning in the digital world, you will find ways to answer those questions in a way that wins over millennial consumers and the entire membership.

 

Fifty-three percent of credit unions have an integrated digital and data roadmap. 

This is a very positive finding. BIG Consulting believes that one of the key drivers to success in the retail banking business is the creation of an integrated and interdependent digital and data strategy and roadmap. Each credit union is different in who they serve, how they serve and, ultimately, how they win. If digital is the channel that will drive 60% of the business, then creating a superior MVP (Member Value Proposition) through digital services will define the winning strategy .

A screenshot of a cell phone  Description automatically generatedA screenshot of a cell phone  Description automatically generated


 

Digital Investments are Making a Difference 

The good news is that credit unions are stepping up their investments in new digital services with 52% of credit unions  investing $250k or more and one-third investing $500k or more this year.

 

BIG believes this demonstrates that credit unions are serious about their digital investment. They are finding ways to put more of their budget into growing the channel and that demonstrates awareness and action!

 

A screenshot of a cell phone  Description automatically generated

Credit unions with a strategy, roadmap, and investments can overtake large banks and FinTechs have in digital services, but action needs to be taken now. 

 

You can download the full survey

 

For guidance, contact BIG Consulting: The leaders in digital, data and credit union strategy.

www.big-fintech.com or Kirk@big-cu.com.

About the Author

Kirk Kordeleski

Kirk Kordeleski

Chief Strategy Officer

Best Innovation Group

Strategy & Growth, Digital Transformation, Lending, Payments

Related

Credit Unions Should Build Brand Equity Now For Voice-First Banking

Credit Unions Should Build Brand Equity Now For Voice-First Banking

Nothing has an impact on customer engagement quite like brand equity does. A strong brand reputation...

Read More >

Creating Digital Ambassadors: Why CU Employees Need To Be Digital Wallet Experts

First impressions count, no matter how much you want to believe otherwise. This is true regardless w...

Read More >
Credit Union Member Growth

Credit Union Member Growth

Credit union membership growth! How do you measure it? It seems like a simple question, just like “...

Read More >
The State Of The Credit Union: Analytics Adoption – Part I

The State Of The Credit Union: Analytics Adoption – Part I

Large banks, Regionals, and fintechs continue to invest heavily in data management, analytics and de...

Read More >

SetIt And Citadel Federal Credit Union Join Forces To Improve Cardholder Experience

As consumers increasingly shop online and pay bills with debit and credit cards, it’s more importan...

Read More >
Studying Gen Z banking - from my living room

Studying Gen Z banking - from my living room

With 2 Gen Zs in my house, I'm really taking the opportunity to study who this generation is fir...

Read More >