Is your credit union ready to compete in the digital age? According to two leaders in the CU movement, not only do many consumers expect their financial institutions to be available online and via mobile device, the cost per transaction from those two platforms is dramatically lower than the same transaction done in-branch or via a call center representative.

Katherine Chicas, chief operating officer for Los Angeles-based Farmers Insurance FCU and Adele Glenn, emerging channels innovation architect for San Antonio-based Credit Human FCU, told a breakout session audience at the National Association of Federally-Insured Credit Unions’ conference in Seattle recently there are five key steps to moving a credit union to a digital institution.

Credit unions are good and are here to do good, Chicas said, but now they need to get from good to great.

Adele Glenn of Credit Human FCU and Katherine Chicas of Farmers Insurance FCU. The pair discussed digital transformation tips for credit unions during the 2018 NAFCU annual convention in Seattle.
Adele Glenn of Credit Human FCU and Katherine Chicas of Farmers Insurance FCU. The pair discussed digital transformation tips for credit unions during the 2018 NAFCU annual convention in Seattle.

Digital transformation isn’t just one thing, said Chicas, adding that it includes a credit union’s website,payments systems, e-mail, artificial intelligence and more. She said 80 percent of all financial institutions are stuck in a circle of complexity that hinders their move to digital. “They have legacy systems and legacy thinking, which equals a ‘that’s-not-how-we-do-it’ mindset. We have to be okay with change.”

When building a digital strategy, Glenn said, CUs need to remember cost per transaction is much lower on home banking and digital banking. The next step is capacity planning: having the right people in the right roles to achieve the desired results.

“At Credit Human we take capacity planning very seriously,” Glenn said. “We build models of how much each employee can handle, which helps us get things done without overstressing our employees.”

The pair offered a series of steps that credit unions can use to guide themelves on their digital journeys.

Step One: Define your brand. Chicas said a credit union needs to ask itself: What are we trying to do?

Glenn reported Credit Human FCU spent five years changing its brand. “We started by talking with our employees about our brand values. We knew we were going to change our name and colors, but starting with brand values allowed us to focus on the ‘why.’”

Step Two: Engage your team. This step is “all about the people,” Chicas said. “Your culture will define how well you succeed. Ask employees for input.”

Step Three: Website optimization. A credit union’s website is its largest branch, and it is open 24 hours a day, 7 days a week, Chicas said. “But there are some credit unions that have not put a lot into their websites. Ask your members if your website is user-friendly, meaning they can get to where they need to get in one or two clicks. If it takes four clicks to get somewhere, you are out of date. Ask members for feedback. Ours told us they could not find the routing number, so now it is on the front page.”

Chicas suggested CUs do member journey mapping by having members identify where pain points are in their interaction with the credit union. Her CU’s interactive voice response system had seven options, which was thought to be great because it offered lots of choices.

“No,” she said. “Members wanted two options: I want to talk to a person, I don’t want to talk to a person.” Search engine optimization also is important so potential members know can find the credit union when searching online. “Work with Google, Yahoo and Facebook to get your website to the top of searches,” Chicas suggested.

Glenn added Credit Human FCU went through its website to find ways to remove friction. “Fast is a minimum expectation today,” she said. “Our members want and expect things to happen now.”

Step Four: Channel optimization. Members want a unified brand experience. Whether they interact with the CU’s call center, branch, ATMs, online/mobile banking or website, they want the experience to be effective, accurate and quick, Chicas said. “Is your credit union active on social media? Our credit union has a social media person who replies to feedback on LinkedIn, Facebook and Twitter all day long.

Step Five: Educate the members. There will need to be a lot of education needed during the move to digital, because “no one likes change,” Chicas said. She pointed to Texas Tech CU, which used a concierge-first method in its branches to teach people how to do what they need to do with new technology. “Use your website and e-mails to be informative. Let people know new technology is coming and that the website will change,” she said.

Step Six: Keep it simple. “Find out what is most relevant to members and focus on that,” Chicas said.

Step Seven: Research and partner. The credit union industry is known for sharing information, Glenn noted. “Most of the innovative projects I have had the privilege of working on involved working with other credit unions. This is particularly important for smaller credit unions. The partnerships are there, all you have to do is ask.”

Collaboration is “the new competitive advantage,” Glenn continued. She said Credit Human FCU is getting ready to launch a platform to facilitate peer-to-peer lending. “We saw Digital Credit Union in Boston was way ahead of us on this. We partnered with them, which took years off our development time. That helped us respond to Hurricane Harvey last fall. The system proved out because we partnered with another credit union and we were able to help our members.”

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