Long lines, busy signals and "bankers' hours" are no longer considered the norm for consumers. By turning to online and mobile commerce experiences that are available 24/7 and seamless across channels, consumers have put pressure on credit unions to offer the services they want, and that means improving technology to stay competitive and relevant.
Consumers are at the forefront of payments innovation and right now, they want consistent, positive experiences that easily accommodate their lifestyles and ensure simple, secure, personalized transactions. Consumers are demanding anytime, anywhere shopping, payments, marketing, loyalty and financial accounts management through their smartphones and tablets-a trend we refer to as Universal Commerce.
These developments are creating a new opportunity to retain member loyalty among consumers who increasingly value technology and convenience over allegiance. To retain tech-savvy members, credit unions need to leverage technology that meets consumer demand by creating consistent commerce experiences across platforms. Technology and smart devices-such as smartphones, tablets, and even ATMs-are key enablers of Universal Commerce.
What One Study Showed
A recent study by First Data showed that 61% of Americans use a smartphone and that 56% of smartphone users use their smartphone to bank. Plus, almost one-third say they expect a mobile phone app from their FI.
Most respondents go online to bank (86%) and pay bills (81%) frequently. Yet, while web-based transaction services are now the benchmark, ATMs still play an important role in consumer transactions. Although consumers view ATMs traditionally-as devices that enable them to retrieve cash, deposit checks, and monitor account balances-there are new capabilities that enhance individualized communications to promote both cross-selling and customer loyalty. For example, people can buy tickets, buy or top-off a prepaid card, or buy a gift card at an ATM.
Indeed, nearly half of FI executives surveyed view the ATM channel as a differentiator and are looking to introduce advanced features, such as personalized offers and messaging that will improve the customer experience, according to an Aite Group study. The ATM is a critical touchpoint and presents opportunities to bring innovative functionality and create revenue-generating services.
Beyond ATM enhancements, enabling banking services on smart devices will improve and expand the member experience across platforms. When CUs leverage smart devices to bring banking to consumers, they increase member satisfaction, reinvent the branch experience, and help keep CU-owned payment products top of mind. Simultaneously, they lower the cost of service by enabling self-service and keep CUs relevant in the evolving market.
Therefore, the most important thing to act on today is get a robust mobile banking solution on members' phones. Ultimately, a consumer's smart device can become a virtual ATM when equipped with the right kids of apps, i.e., using a camera-equipped phone to photograph and deposit checks. They are also using them as marketing channels through SMS messages and cross-selling opportunities offered by mobile apps.
This and other kinds of advanced smartphone capabilities, such as mobile wallets, contactless technology, email and SMS receipts, and prepaid reloads may be farther down the road for most credit unions-but they should be watching these developments closely. According to one survey, most consumers would rather have a virtual wallet application issued by their own institution than any other entity. However, that preference is narrowing as consumers indicate increasing trust in alternative providers. Credit unions still have a role to play as a preferred mobile wallet provider, but the window of opportunity may be closing.
The Emerging Role of the Tablet
As smartphones move in to the mainstream, tablets are also increasingly commonplace in consumers' lives -- and becoming more powerful universal commerce enablers than traditional computers. Well-equipped tablets have all the functionality of computers, but they work anywhere. Outfitting tablets with the right applications or CRM interfaces in the branch can streamline workflow, reduce paperwork, and help staff sell more effectively.
Again-if credit unions cannot take advantage of tablets today, they should at least be aware of the opportunities. These updates will enable credit unions to function as self-service channels that improve efficiency and promote the personal interaction, convenience and control that consumers demand.
The New Standard
Technological advancements in the online, mobile and ATM arenas have fundamentally changed how consumers interact with credit unions. The same technologies that large banks use to attract and retain customers can be equally effective for credit unions.
Credit unions need to begin considering-and, wherever possible, executing against-the new avenues that technology and smart devices offer. Soon, cross-channel banking will be a socially-demanded standard all financial institutions will have to meet in order to win long-term in the payments space. They will need to comply in order to stay profitable and must decide whether they want to embrace online and offline convergence now or later.
CUs that do not adapt risk facing competitive disadvantages in the battle for leadership in their respective categories. However, a smart device strategy that embraces the aspects of Universal Commerce will optimize the member experience. Adapting to smart devices will enable credit unions to stay competitive and retain member loyalty while improving their convenience and value.
Bryan Kratz is senior vice president, community financial institutions with First Data.