Last year was a great year for credit union member relationships, but not for banks. A June 2016 Gallup Poll reported consumer confidence in banks at just 27 percent – and it clearly eroded further in the wake of the Wells Fargo fraudulent account scandal and other news. As we start 2018, customer confidence in the nation’s largest banks is slowly rebounding. Bank of America recently faced customer protests for putting in place policies that make it hard for consumers with low balances to have free checking. To put it in perspective, 71 percent of millennials would rather go to the dentist than listen to what banks are saying.
While the news may be bad for banks, credit unions are squarely in the sweet spot for membership growth, thanks in part to current consumer sentiment toward certain retail financial institutions and the trend of increased branch closures. In 2017, this led many credit unions to see the largest single-year growth in memory, with more than $1B in added deposits. Likely, this growth could have been even greater with better lead management, onboarding and service capabilities. Credit union objectives should focus on continuing to benefit from both prospective members looking for value, transparency and service, and increasing engagement and service to solidify relationships with members.
Following these four steps, credit unions can continue to grow from 2017, as well as increase overall member engagement.
1. Change the conversation
Shift the tone of conversations with members from, “How can I help you?” to “I can help you.” Credit unions need to equip frontline staff with member-centric technology and training to ensure that account holders’ needs and best interests are catered to in every interaction.
2. Foster an environment for collaboration
Encourage more collaboration. Credit unions should empower their team to work side by side with members, assisted by automation, to make interactions both frictionless and more valuable. Perhaps leverage tools like PFM (personal financial management) side by side with the member to have them open up and discuss their financial challenges and desires.
3. Improve lead and referral management
Use CRM to empower both the team and the member to grow the relationship. By better managing leads and referrals, credit unions can use these insights to anticipate member financial needs and ensure product fit — proactively present members with options that make sense for their unique financial situation.
4. Blend human and digital channels
Eliminate the artificial barriers between human and digital channels to provide members with improved service across all channels. Credit unions must reduce friction and make interactions efficient in the branch, by phone or via web and mobile.
For credit unions to continue building relationships with members as other financial institutions close branches and visibly reduce their in-person capabilities, following these four initiatives is key. Last year was a banner year for many credit unions, yet most only saw a fraction of their potential growth in membership due to less than optimal lead and referral management and tedious onboarding processes.
For some credit unions, 2018 will be their banner year. Clearly the market has shifted, and a broad range of people from millennials to retirees are searching for transparent, value-aligned relationships for their financial needs. Credit unions need to capitalize on this shift.