While most credit unions experienced growth during the pandemic, maintaining margins and differentiating remain strategic priorities. Smaller credit unions in particular are under pressure to accelerate recovery with improvements in member experience and contactless services.
Experts advise making rapid progress toward goals in 90 day increments, yet when it comes to digital lending and contactless services, many struggle to balance competing headwinds of advancing technology and limiting IT resources.
Key themes are emerging from leaders and challengers like Michigan Legacy CU of Wyandotte, Michigan have used the pandemic as a catalyst for a new strategic direction, investing in blending both physical and online member experiences. While Michigan Legacy’s strategic plan included a strong push for digital banking products, “the pandemic prompted a more immediate move to online banking, given the added and meaningful physical safety benefit.
We had a 38% jump in online banking from March through April alone,” writes Carma Peters, president and CEO of Michigan Legacy CU in an article appearing in Credit Union Times.
Like Michigan Legacy, many credit unions were forced to rapidly accelerate digital strategies such as contactless payments and loan processing in order to continue to serve members safely with essential services during the pandemic. Now that they are here, contactless services are expected to remain, becoming a core mode of delivery and part how credit union leaders differentiate from the competition.
Challenger brands are finding that contactless loan processing doesn't just mean e-signatures. Credit union staff and members need integrated workflows and tools to help streamline the process and create the frictionless interactions members expect.
Expectations have shifted. Clients expect a seamless experience.
While email has been the default for electronic processing of loan documents, it sets the stage for a poor customer experience and can’t compete with modern document portals and workflow solutions.
Older members may have trouble printing and scanning documents, or managing file size limits and bounced emails.
Younger members, the future loan market, tend to not use email and have a higher bar for what constitutes a good digital experience.
According to a Mckinsey & Co report, 62% of respondents felt that customers who have changed their behavior would keep their new behavior” meaning, digital delivery of lending services is here to stay. And for those CUs that are lagging in digital strategy, experts recommend they put in place strategies to reach improvement goals quickly, which may be difficult for smaller credit unions with smaller IT teams and high overhead.
These CUs can benefit from solutions that lower the cost of business, increasing margin by reducing employee effort and increasing customer loyalty. Cloud based, open API solutions can be deployed and integrated with back end systems with minimal impact on IT resources.