Fail Forward Fast: Credit Union Lessons from the Fintech World

There are a lot of fads that deserve to be forgotten. Fidget spinners are one example. The mannequin challenge and Harlem Shake videos are others.

Let’s not get started on eating Tide Pods.

But some trends show us that there are other ways of accomplishing goals. Sometimes, hopping on a trend is less about fitting in, and more about finding a better way of doing things. Without trends, we wouldn’t have text messaging, YouTube tutorials, or ridesharing apps.

Here are a few things that credit unions can learn from the fintechs with whom we partner (and against whom we compete).

 

1. Push the Pace

 

Did you know that Amazon makes a software change roughly every 11 seconds? That’s about 8,000 changes per day.

Granted, technology changes are one of Amazon’s core competencies, but still—that’s a lot of changes.

Amazon is helping countless startups, fintechs, researchers, and individual users embrace machine learning, natural language processing, cloud hosting, and more. These kinds of technologies could drastically disrupt our industry (as well as many others).

Meanwhile, many credit unions still aren’t on the cloud.

At what point should credit unions consider these technologies an existential threat?

Well, that depends. If your credit union doesn’t trust new technology and wants to stick with the old-fashioned, tried-and-true way of doing things, then you should consider emerging technologies and software changes a threat now.

However, if you’re an early adopter of innovative technologies and software changes, then the future holds a lot of promise.

 

2. Understand Trends

 

Remember all that nonsense about fidget spinners and Tide Pods? Sure, they were obnoxious, but they revealed something incredible:

People are willing to try things.

One of the more interesting trends that has emerged in the last decade is the pop-up business model. Pop-ups are essentially strategically-deployed short-term shops. Pop-up retail shops see higher sales than online stores. Restaurant and bar pop-ups pave the way for new brick-and-mortar establishments.

South Bay Credit Union decided to hop on the trend: we set up a branch for $2,300, and we’re using it to reach new members, provide another location for existing members, and help people near our pop-up location better understand their finances and financial options.

It’s a risk, but it’s a risk we’re willing to take.

Understanding trends means a lot more than hopping on bandwagons, though. Understanding trends also means being engaged with new developments and changing regulations.

Most importantly, understanding trends means understanding members. Listening to member needs is critical to the future of credit unions. It’s the credit union’s job to give its members what they want (within reason, of course). Often, adopting emerging technologies or rethinking old strategies is the best way to make that happen.

 

3. Think Like a Fintech

 

Again, within reason. Here’s why: 90% of startups fail.

The reasons for that are various, of course. Sometimes it’s a bad product. Sometimes it’s lack of money. Sometimes their competitors just get there first. Sometimes the development cycle takes too long, or the scope of the project gradually expands, hogging resources.

Nevertheless, many startups make it. The ones that make it share several attributes that allow them to overcome obstacles or changes in direction, like prioritizing agile processes and hosting hackathons.

Here are a few of the most common attributes of great fintechs and startups:

  • They have a great product
  • They don’t ignore things—they actively listen and seek out feedback
  • They work on the business not in the business (minutiae of the day-to-day)
  • They emphasize growth
  • They recover quickly from setbacks

Credit unions already have a leg up in most of these areas. Great product? Check! Our rates are better than banks, and our customer service is unparalleled. Seek feedback? Double check! Taking care of our members is priority number one.

On the other hand, credit unions aren’t exactly in the business of creating new products or technologies the way fintechs do. With that in mind, here are some ways that credit unions can still serve as incubators of innovative ideas:

  • Meet with startups and fintechs
  • Roll out live betas
  • Listen to new ideas
  • Communicate with partners
  • Look outside typical networks

As technology continues developing at a rapid pace, we can play our part by keeping up with it. As we do, we’ll come across products, services, and strategies that benefit our members, our credit unions, and our communities.

Plus, we won’t be stuck with typewriters and personal checks when the rest of the world is using ipads and Venmo.

 

4. Create a Culture of Innovation

 

Fortunately, we’re moving into an era in which people appreciate creativity, effort, and authenticity. At no point in history have humans had such a green light to experiment, try new things, pursue exciting avenues for growth.

We support each other’s artistic works in progress on social media. We cheer on our friends as they train for their first triathlons. We let people know we support their efforts, even if they don’t always make it. You will likely find more support if you try and fail than if you never try at all.

Creating a culture of innovation means incorporating the above three ideas into one. Credit unions have to be willing to try new things and fail like a fintech or a startup. They have to understand what people—and the market—need. And, perhaps most importantly, they have to do it quickly.

Here are a few suggestions about how your credit union can speed up:

  • Build a culture of experimenting
  • Budget for unknown opportunities and failures
  • Create trust with the board
  • Report progress
  • Keep contracts short or cancelable
  • Think of vendors as partners
  • Learn at every opportunity
  • Don’t be afraid to pull the plug

The ultimate question is this: are you putting yourself out there? The answer should be “yes.”

Not everything is going to work out. Sometimes, it might seem like nothing will. However, surprisingly often, pushing for innovation will help you to discover or create something really cool. Or, at the very least, you’ll distinguish yourselves from the status quo.

You’ll rise above a sea of complacency, and you might even have fun doing it.

 

Tasting Our Own Cooking

 

At South Bay Credit Union, we’re experimenting with new technologies and ideas. We may not be making a software change every 11 seconds, but we’re doing our best to stay on top of critical developments and changes in our industry.

We opened a pop-up branch in a business center. We introduced CU Live video chat to support video banking for our members. We introduced Lease Look Alike and Visa’s Credit Card MobiMoney for our members’ convenience.

Not everything we’ve tried so far has worked. But that’s okay. We’re not here only to learn how to succeed.

We’re also here to learn how to fail. And we’re failing forward.

If you’d like to learn more about some technologies that can help your credit union, then check out the following blogs:

Email Marketing vs. Automated Marketing for Credit Unions

What Credit Union Marketing Automation Is, and Why It Matters

Jennifer Oliver is the President and CEO for South Bay Credit Union. She was previously the CEO for California Bear Credit Union. Overall, she has 30+ years of credit union experience, and 22+ years executive leadership in credit unions, including a focus in progressive management, sales & operations.

 

CU 2.0 Fintech Friday: Coalesce AI

It’s CU 2.0 Fintech Friday! Today, Chris Otey sits down with Coalesce AI to discuss all things credit union, fintech, and digital innovation.

fintech partnerships

Coalesce.ai helps credit unions introduce the power of AI and machine learning into their operational ecosystem. Their platform utilizes User-Defined Machine Learning, which allows clients to train Coalesce.ai’s automation platform how to gain expertise in a certain set of tasks.

Coalesce.ai’s systems helps credit unions and financial industries reduce error and increase efficiency while saving time. By reducing or eliminating the possibility for human error and the necessity for manual labor, Coalesce.ai lets ten credit union employees accomplish the work of a hundred.

For credit unions, Coalesce.ai found that “the operations of a financial services firm like a credit union today requires—especially in the middle and back office—a lot of tedious, manual, repetitive work: opening spreadsheets, scanning emails, filtering through PDF documents. And with this new AI technology, we’ve been able to automate the way that some of that gets done at credit unions.”

If this sounds like an intriguing credit union–fintech partnership, check out the video and Coalesce.ai snapshot below!

Credit Union Fintech Snapshot: Coalesce.ai

Top 3 Problems Solved

  1. Workflow automation
  2. AI and User-Defined Machine Learning
  3. Streamline operations

Coalesce.ai Founder: Greg Woolf

Coalesce.ai Market Strategy

Credit Unions.

Credit Union Fintech: Coalesce.ai in the News

Coalesce.ai introduces AI elements to workflows

Coalesce.ai works with IBM’s Watson

Interested in seeing more fintech entrepreneurship? Check out the CU 2.0 fintech infographic, Death by 1,000 Cuts. You can see firsthand the impact fintechs have had on the credit union industry, as well as how fintech innovation can improve your income statement, balance sheet, interest margin, services, and more.

Credit Union 2.0 believes fully in the power of credit union and fintech partnerships. With the shared goal to redefine multifaceted financial services models look like to members, more credit unions are looking to partner with forward-leaning fintechs.

If you want to learn more about credit union–fintech partnerships, click here.

CU 2.0 Fintech Friday: Hound Software

It’s CU 2.0 Fintech Friday! Today, Chris Otey sits down with Hound Software to discuss all things credit union, fintech, and digital innovation.

CU2.0 credit union fintech partnership innovation

Hound Software accomplishes workflow automation for credit unions. They partner with credit unions, for whom they collect, integrate, and analyze member data. From there, they initiate and direct an automated workflow to guide members through relevant services.

Hound Software focuses on customer satisfaction and experience. Through data collection and analysis, they strengthen relationships between credit unions and their members. Hound Software helps credit unions stay in front of their members so they stay engaged and satisfied.

Hound Software’s primary roles are in customer retention, revenue management, and upselling. Hound Software helps credit unions create multiple-stage processes and workflows on the fly. Hound Software also integrates with communications, analytics, and machine learning systems to keep your credit union smart and well-connected.

If this sounds like an intriguing credit union–fintech partnership, check out the video and Hound Software snapshot below!

Credit Union Fintech Snapshot: Hound Software

Top 3 Problems Solved

  1. Customer retention
  2. Revenue management
  3. Upselling

Hound Software Founder: Manrique Feoli

Hound Software Market Strategy

Credit unions, financial institutions, commercial businesses.

Credit Union Fintech: Hound Software in the News

Hound Software debuts in Florida

Interested in seeing more fintech entrepreneurship? Check out the CU 2.0 fintech infographic, Death by 1,000 Cuts. You can see firsthand the impact fintechs have had on the credit union industry, as well as how fintech innovation can improve your income statement, balance sheet, interest margin, services, and more.

Credit Union 2.0 believes fully in the power of credit union and fintech partnerships. With the shared goal to redefine multifaceted financial services models look like to members, more credit unions are looking to partner with forward-leaning fintechs.

If you want to learn more about credit union–fintech partnerships, click here.

Credit Union Strategic Planning Facilitators Guide

The leaves are falling.  The smell of warm toner is in the air.  Yup – its budget season and credit unions everywhere are diving into credit union strategic planning.  If you hate strategic planning or think off-site workshops that align all of the stakeholders’ interest – then this post is not for you!  However, if you are a credit union board chair, CEO, or the person responsible for selecting a credit union strategic planning facilitator than this post will be helpful.

Credit Union Strategic Planning FacilitatorsStrategy Planning for Credit Unions

‘Every year 3000-4000 credit unions embark on an annual ritual of thinking of the future, determining BHAGs (big hairy audacious goals) and trying to think how our great credit unions might be disrupted.  In our experience having been part of credit union strategic planning sessions at credit unions, fintechs, CUSOs and as management, board, and facilitators – we have seen all sides.  There is nothing worse than a facilitator that doesn’t get our pain points, industry, process, or our underlying challenges from the past.   So here is a guide to 9 credit union strategic planning facilitators that “get it”.

Credit Union Solutions Group (CUSG)

CUSG is a CUSO owned by the Michigan Credit Union League  They do a great job helping credit unions focus on how to restart growth and find the right products and services for your members.   The process includes onsite facilitation, consumer research, business trends and disruptors, peer analysis, and best practices.

Dollar and Associates (Dennis Dollar)

Dennis Dollar is the former board chair of the NCUA.  Dollar Associates are highly knowledgeable on key issues such as mergers, field of membership and other legislative and political issues.  Their credit union strategic planning facilitators follow the SWOT (strength weakness opportunities and threats) approach to planning.  Session included key information on the “condition and future of the credit union industry”

Callahans www.creditunions.com

Callahan’s has a long history and background in the credit union industry.   Callahan’s has great peer level data and analytics that will help credit unions see critical insights and industry trend data that helps credit unions plan for the future.

Cmeyers

C.Myers is focused on engaging individuals and teams and focuses on the financial services industry.  Their visioning, leadership development and board development are focused on “creating relevancy, sustainability, differentiation” for their clients.

CU Strategic Planning (Mike Beall)

Mike Beall is a well-known expert and credit union knowledge source.  Mike focused on reviewing financials and looking at trends to develop strategies.   Loans, growth and profitability are key components of hiring Mike to be your credit union strategic planning facilitator.

Cornerstone Advisors

Cornerstone Advisors regularly helps credit unions develop and execute strategic plans.  Their process is more in depth then many and focuses on understanding the client, surveying executives and board members, performing an assessment and ultimately facilitating the meeting.

CU Strategies

Celeste Cook is a CU Industry Expert.  She focuses on one and two day plans for credit unions.  She works with teams to identify CSFs, critical success factors, focused on growth and retention.   Celeste is big on accountability and highlights her approach to building tracking, goals, and benchmarks in her process.

Credit Union 2.0 – Credit Union Strategic Planning Facilitators (Kirk Drake, Chris Otey)

Kirk and Chris take a unique approach to planning sessions. Our goals are to deal with some of the real issues facing credit unions.  These include:

  •                 Who is your ideal member?
  •                 How do we improve board governance?
  •                 How do we get our board to look more like our membership?
  •                 How do we deal with the onslaught of fintechs and technology?
  •                 How do we change our culture to be more like a fintech?

 As the author of Credit Union 2.0, head of a large technology CUSO, and founder of CU Wallet Drake has great insights from both his time working at a credit union through his entrepreneurship and board experience.

As board chair of South Bay Credit Union and former CU Wallet and Fiserv executive, Chris has worked with hundreds of credit unions to help them deal with board governance, CUSO, and other technology challenges.

Credit Union 2.0 -Options

DREAM (Based on the CU2.0 Book)

Credit Unions are under unprecedented attack from all angles.  1000’s of Fintechs are collectively hurting the bottom line.  Regulators are slowing the industry down.  Credit Union 2.0 outlines the DREAM (Differentiation, Repeat and Reinforce, Educate and Excite, Automate and Motivate) methodology that will help your CU begin the process of digitally engaging your members, building fierce loyalty and making them feel the CU difference.

The Credit Union 2.0 movement teaches why we need to change, key case studies from awesome credit unions, lessons learned from other cooperatives, strategies for creating fierce loyalty including – The ultimate first 100 Day Experience, Hacking your CU’s Repeated Mistakes, and Education = Trust | Trust = Sales.

Finally, CU2.0 will provide an optimistic outline of the CU of the tomorrow that Digitally engages members, builds fierce loyalty, scales gracefully, and make your members feel like they own the place!

PAINT 

Kirk Drake, a serial entrepreneur focused on CU technology and author of CU 2.0, reveals his P.A.I.N.T. strategy you can use to make your CU more competitive, more creative and more in tune with today’s digital expectations. If you have struggled with corporate culture, agility, moving faster or competing with the onslaught of new Fintechs – the P.A.I.N.T. methodology will help your CU quickly iterate, and apply key “Operating System” Strategies to better engage your members.

Take home these 5 tools:

  • Painted Picture
  • Analytics Plan
  • Innovation and Agility Hacks
  • Nimble Algorithms
  • Terminate

 

3 Good Reasons You Should Use Video Marketing

Video marketing is here, and it is here to stay. Video has become an integral part of online marketing that your credit union CANNOT afford to ignore. It is the most effective tool for sharing information and entertaining content with your members. According to Cisco, by 2020 video will make up 79% of all internet traffic.

With Facebook Live, Facebook Stories, Instagram Stories, and all the video we see popping up in our social media news feed each time we log in, it is clear that video is being used not only by consumers but also by businesses. However, throughout our content creation services at CU 2.0, we still find that many credit unions are not utilizing videos and that executives are hesitant to start. Many credit union executives share the same concerns about getting set up to successfully start video marketing.

  • What is the monetary investment necessary for my marketing team to start using video?
  • Even if we have the money in our marketing budget, where do we even start?
  • Do I need to hire more staff or do I need to outsource?
  • Do my members really care about video? I thought it was just for celebrities, social influencers, or for sharing cute videos of my dog.

So, the question becomes, do the benefits of developing, executing, and sharing a video marketing campaign outweigh the amount of effort needed to successfully do so.

The answer is YES. 100%, without a doubt.

Here are 3 reasons your credit union marketing team should be using video marketing.

1) Members love watching videos

Why does it seem that videos are popping up all over social media and in our email inboxes? It’s because people love watching videos. Our members prefer watching videos over reading long strings of text because videos have the ability to convey a ton of information in a quick and easy to understand way. Video also allows your members to connect with your credit union and receive the personal touch that they would not get with a text article. Youtube has over 4 billion video views per day and is currently the second largest search engine, after Google. In 2015, online videos accounted for 55% of all mobile traffic and are forecasted to rise to 79% by 2020. Video content online is only going to continue to grow.

2) Search engines are all about video

Video is imperative if you are paying attention to SEO (Search Engine Optimization). Your credit union is 53 times more likely to show up on the first page of a google search if you have a video embedded on your website. Since Google acquired YouTube, marketers have seen a significant increase in how videos affect your company’s search engine rank. Simply put, your credit union cannot afford not to have video on your website. You aren’t considered relevant by search engines if you don’t have video on your page. Click here to learn more about SEO.

3) Video helps to build a member’s trust

Having video on your website, social media channels, and marketing emails helps to put a face and personality behind your credit union’s brand. Video is a terrific way to build trust with your membership and connect with members when they aren’t in a branch. A terrific example of this is when a member first joins your credit union. Instead of sending a lengthy welcome email full of text, send a video welcoming the member along with a couple of helpful tips, links, and information that a new member would need.

Video can also be used in marketing campaigns to quickly and effectively grab a member’s attention and inform them about products and offers available to them. An email with a video embedded is likely to increase email click-through rates and improve email engagement. Video tracking also allows you to see which members opened the videos, who watched it all the way through, and who replayed it. Having this information will allow your marketing team to build out lead nurturing campaigns and thus build a more effective sales pipeline. Your marketing team will also have a better idea of what content your membership finds relevant, and this will help you build more successful campaigns.

Hopefully, you now agree that video marketing is imperative for your credit union. But how do you get started? CU 2.0 provides content creation services, and in our next blog, we will focus on some of our tips if you want to get started on your own. Keep an eye out!

Want to talk to an expert at CU 2.0 about our services and how we can partner with your credit union? Contact us here today!

Four Lessons Learned From the CU Leadership Convention

This past week I had the pleasure of speaking at the CU Leadership Convention in Las Vegas, Nevada.  This was the first year I have attended this conference, and it was previously called the CU Directors conference. Now that the organizers have opened the conference up to credit union management teams, the conference attendees have grown and the topics discussed have expanded greatly. Here are the top four things I took away from the 2018 CU Leadership Convention.

Cal Ripken is a great opener! 

Cal Ripken kicked off the conference and in his keynote, he shared terrific stories, wisdom, and thoughts about how he set a major baseball record for most number of games played.  I followed Cal in the second speaking slot, and Cal made my life easier by exciting the credit union attendees. My favorite story Cal shared involved how he managed through spring training and avoided getting hurt.  Over Cal’s career, he had nine coaches. So, when spring training started, Cal would proactively propose a training schedule that worked best for him and would take the workload off his Manager. The result was two-fold. There was a happy Manager with a decreased workload and a happy player who avoided early season fatigue and injury. This is a lesson that all of us should remember and put into practice. We should think about how to make our bosses lives easier by proactively proposing solutions to problems and managing ourselves.

Digital Engagement is Happening

When I am preparing my presentation for a conference I am speaking at, I look for examples of credit unions doing innovative things in the area of digital engagement and digital marketing. I am excited to say that this task gets easier and easier with each speech! Credit unions are following the DREAM methodology from Credit Union 2.0 (Differentiate – Recreate & Reinforce – Educate & Excite – Automate – Motivate) and quickly improving their social media presence, websites, video utilization, and connecting the dots between data and the member experience. This is exactly where we should be heading as an industry.

Use Humor and Empathy – They Go Together

Matt Kazam from They Laugh you Win, gave a great presentation on how to use humor throughout our day to day corporate lives. His methodology for joke writing, fusing audiences, and connecting person to person, provided a great framework that we can use in multiple areas of our lives. We can implement his method for better connecting with our boards, giving speeches, or just use it to have a little more fun at home.

Joe Mirachi, CEO of Launch FCU, and Deedee Myers, CEO, DDJ Myers, Ltd. know their Board Stuff!

I think a lot of us really struggle on how to help our boards be more strategic and less tactical. One small example of this is using an associate board member structure to develop a recruitment pipeline that allows for finding younger and more diverse professionals to help you take your credit union to the next level.

Overall, whether you are a board member or a credit union executive, the CU Leadership Convention is a great conference to attend. You are sure to pick up new ideas, network, and jump-start your credit union strategic plans!

credit union leadership convention

Three ways to better connect with your membership

As small niche financial institutions, it is imperative that we don’t lose sight of who we serve.  It is essential to your credit union’s survival to be highly focused on your niche and to customize and personalize your credit union’s solutions. One of the most essential ingredients in this process is how to connect with your member.  Now, what do I mean by connecting?

connect with member

Connecting is about being highly relevant and memorable at multiple levels.  This starts with the aggregate credit union brand, moves to the products & services, and ends with the individual member.   At the end of the day, if you can create continuity between all three levels you will have members that love you. This is the goal. Members who love your credit union then tell your story and bring their friends to you.

There are three things that can help you better connect with your membership.

Utilize video to Connect with Members

Video is becoming highly important in today’s digital world.  In the next few years, it is anticipated that more than 80% of all content consumed online will be in video.  Your credit union’s website, member interactions, and content should all be heavily reliant on video first.   Every website should have biography team videos, a video on the problems you solve for members, video member testimonials, and at least one video on EVERY page.  All these videos won’t happen overnight, but list out all the videos you need, prioritize, and start tackling the videos one at a time. Rome wasn’t built in a day, but it is time to get working on the foundation!  Videos are an essential way to connect with your member.

Connect with Members with a Blog

Now I know what many of you may be thinking, blogs are stupid and no one reads them.  Not true! A blog is simply a more frequent newsletter that allows you to maintain consistent communication with your members.  It is also a key way to train Google on the problems your credit union solves and the community you serve.  Your blog should not be an in your face marketing channel. Members will not click on and read your blog regularly if it is sales pitch after sales pitch. Regular distribution of educational content is a great way to connect with your member. Your blog should be simple quick articles, community news, and things that are relevant to your members. Don’t forget to optimize your posts for keywords and Google.

Use data and machine learning and other tools to hyper-personalize.

Amazon is an example of a company that is a rock star at this.  If you and I both pulled up Amazon on our computers right now, we would see different things based on our historical purchases and what Amazon believes might be interesting to us.  However, your credit union website looks the same to everyone who pulls it up.  The offers on your website are not personalized to the member.  To stand out and be relevant, credit unions should be using analytics, machine learning, marketing automation, and website design to highly personalize every interaction with a member.  The most important ingrediant to connect to your member is personalization.

Ultimately, connecting with members is what it is all about.  Seeing the difference your credit union makes for each and every member is highly rewarding.  Smart use of video, blogging, and data will allow your credit union to enhance those connections and make you highly relevant to your membership.

Originally published on August 1, 2018 on CUInsight

Getting Your Data In Order – A Recipe for Credit Union Digital Transformation

credit union digitial transformationData is fundamental to your credit union digital transformation. Customers must be able to efficiently and effectively manage transactions online. Credit Unions must be able to infer customer needs from those transactions and reach out to customers where they “live” online, whether through email, social media, or text. This blog post presents a simple recipe for getting your data in order as a foundation for digital success.

Step 1 – Unload the data you don’t need. 

Credit Unions tend to hold onto data forever, or at least long enough that it can become a problem. It is common for core systems to have database tables with hundreds of millions of transactional entries and years more data than needed for most operational needs.

Why? Fear of removing data? The effort to replace the data if you get it wrong?

Who tested that purge script anyway?

Shhhh. Is, “Don’t ask, don’t tell,” your data management policy?

OK, we all know that removing data isn’t on the list of critically important tasks, well, until it is. Removing data can make the overall management of your information system easier! Backups are smaller, and systems may run faster due to the smaller size of the database. It’s just less to manage.

The good news is that removing data, although challenging can be automated.


Step 2 – Clean the data you keep – for credit union digital transformation

Managing data in bulk is usually handled by IT teams. Managing data quality so your digital journey can be smoother is a front-line staff opportunity. The dirtier our data is the more each activity we want to embark upon causes exceptions. Having clean data reduces effort and increases performance by eliminating exception conditions.

How does data get dirty?

For example, complex core interfaces allow data entry errors to go unchecked and bulk imported data from a merger. I am sure you have other examples of where the data can and does go astray. Some kinds of data can be validated with scripts and tools, however, technology can’t fix all data problems.


Step 3 – Focus on data that supports digital engagement.

Ensuring the quality of member data like current email address and mobile telephone numbers is critically important for successful digital engagement with our members. It is important that names are correctly spelled, and that staff know how to pronounce names when they speak with a customer in person or on the phone.

Mapping member data help the selection criteria for digital campaigns, if your digital persona is a working woman who is the “CFO” of the household, you quickly realize that knowing whether your member is male or female is fundamental.

Do you have a report showing what percentage of your membership has an email in your system, a mobile phone number? This number is the upper limit of members your campaigns are able to address digitally.


Step 4 – For better member data, engage your members.

It takes time and effort to correct member data, and many Credit Unions are unwilling to ask members without some other offer or campaign. One option is to engage directly with your members to make sure their information is up to date. Train member service staff to pay attention to member data at every customer interaction. If key member information is absent or hasn’t been updated recently, have them ask members for updates.

The better the quality of your data, the easier your path will be to creating and managing the digital transformation.

 

Want to read more on digital transformation?

On the Digital Transformation Journey with Partners FCU’s CEO

Digital Transformation and the Old Fashioned Con

Digital Transformation and the Old Fashioned Con 

By Robert McGarvey 

For CU.20 

 

Suddenly there is a stampede of self-professed experts who want to guide your credit union through its digital transformation. 

Just one problem: quite a few of the experts may be bluffing.  Or full of wishful thinking. Or maybe they are just plaindigital transformation con artists. 

It puts me in mind of Odysseus and his voyage past the Sirens in the early part of Homer’s classic poem.  They sing enticing songs but sailors who heard them and sought to get nearer were lured into shipwrecks.   

What did Odysseus do? He plugged the ears of his crew so they wouldn’t hear and he had them tie him to the mast so that even when he heard, he couldn’t act. 

Some credit union CEOs really should think about having themselves tied to the vault to prevent them inking a digital transformation deal, and plugging the ears of other executives might not be out of line. 

Not when so many tempting, sweet songs are getting sung. 

Face this reality: just about every credit union needs to be plunging into a digital transformation because how and where and when we bank has been undergoing massive change in the past quarter century and the changes will continue.  Almost certainly, for instance, the main banking touchpoint for most consumers will become a smartphone.  For many it already is.  Many of us no longer write checks.  Many haven’t been inside a branch in a year or more.  The changes keep on coming. 

Credit unions need to react, to respond, to plot a path through the digital tomorrow.

Many credit unions won’t survive.  They won’t transform fast or thoroughly enough. 

But credit unions actually are well positioned to digitally transform – once they decide they want and need to, 

The typical credit union can be more fleet footed than most banks.  Banks have vast legacy branch systems that increasingly seem like so much deadweight.  But many bankers, by virtue of their personal pasts and their institutions’ balance sheet, are wed to their branches.  They will pay a price for that. 

How should a credit union digitally transform? 

It starts by knowing yourself. What does the institution stand for? What does it want to be in 10 years. Who are your members? What do they want from a financial institution? 

The next step: look at the institution’s digital contact points and ask how they can be better? Most credit unions have blah online banking, their mobile banking is equally blah, and, sure, there are plenty of excuses about this – but it’s probably not going to be good enough. 

Today’s comparison isn’t with the community bank down the street. It’s with Chase and, even scarier, with Amazon, Netflix, and the other big online players. Can you digitally compete with them? 

What’s your busiest branch?  Your online banking site. And the mobile app is the next busiest.  How much time do you spend optimizing those channels? 

You also need a digital marketing strategy, probably built around Facebook, definitely also a lively website. 

A small sign in front of a branch is not 21st century marketing. 

Most of us will start, and end, our search for financial institutions online. You need a plan for gaining visibility there. 

You can’t do all this alone? Just about all credit unions will need to bring in fintech partners – but know that last year’s technology partners may not be right for helping chart your digital transformation, 

Many credit union technology vendors reap profits from the status quo which, frankly, as far as technology goes is primitive in the credit union world. But the profits say it’s not in their interest to rock this boat and so they don’t. 

Understand this: it’s simply crazy that you can’t use the mobile banking platform you want because it doesn’t easily or cheaply interface with your core  And so a system that may be 20 years old, or is it 40, is dictating the technology landscape? 

But so it goes at many credit unions. 

What vendors can help you?  Search for partners with rich fintech cred.  Worry less about credit union bona fides and, for many credit unions, their first question always is, what credit unions have you worked with? 

That may not be good enough. 

What you want are guides who can lead you into and through the digital wilderness.   

Pick wisely.  But pick boldly. 

Some years ago the CTO of one of the world’s biggest banks told me what he did when his CEO tasked him with getting a mobile app for the bank.  He downloaded many of the most popular apps at the time, spent a weekend absorbed in them, went to the office on Monday with a list of the 10 or so he liked the best.  None of those apps were at banks. Not a one. He put HR on finding out the names of the key developers, they called in people for interviews, and within a week or so he had assembled a project team to get his bank on the phone. 

Was he concerned that none of the developers had banking experience? Not in the slightest. His bank, he said, had hundreds of executives who could add in banker smarts.  What he needed was people with digital smarts and he knew he wouldn’t find them at banks. 

Do likewise is my advice. 

Want inspiration for a credit union transformation? Read the story of Partners FCU.   

Credit unions are doing this.   

You can too.

Physical + Digital = Phygital

digital credit union

Phygital, it is a thing. And, it can be a very important concept in furthering the relevance of a credit union with an increasingly digitally savvy member base. As we walk down this digital transformation path as an industry, we overlook the physical aspect to competing digitally. Now, if you are of the mindset that financial institutions should have columns and vaults and project physical security, this may not be the best article you read today. However, if you are pouring money into competing digitally, this will interest to you because a bottomline message is that even in a 21st century digital world the physical still matters.

A lot.

Some AHA! moments to consider. Have you flown lately? What is your impression when you get on an older United plane with no in-seat video, no Wi-Fi, or no personal device entertainment? Now, what is your impression when you get on a newer United plane? Or a Virgin America plane? It goes beyond them simply having Wi-Fi or PDE. It is the physical appearance of the cabin as well. What does the lighting look like? Is it industrial white lights? Or, is it lights with color, tone, ambiance? You are taking the same flight from LAX to DFW, but it is a completely different experience when the physical appearance of the plane is combined with the digital amenities you need.

Think about first impressions. I tend to make snap judgements when I walk into any type of business. From coffee shops to credit unions to fintech startups, when I enter a building for the first time I immediately decide if this business is tech savvy. And it has a lot to do with the physical appearance. Is the furniture older than I am? Little things too, like the keyboard. Think about that, does your keyboard look the same as it did 20 years ago? No, it does not. It is rounded, cordless, and smaller. Even something as innocuous as a phone can send the wrong message. What does that phone look like? There are a ton of millennials out there buying homes and cars and having kids. These people  don’t even know what a dial tone is, or a busy signal. Many of them have never used a traditional phone. Telling them to dial 9 to get out is a completely foreign concept.

Now, think about your credit union. What do the branches look like? You may have the greatest mobile banking, internet banking, and digital marketing solutions around, but if your branches look like 1982 or 72 or 62 or even 1992, it might be time to update them. Have some secret shopping done. Hire a millennial to walk into your branches and provide feedback. It can be as simple as digital displays and as complex as selling older buildings off and starting over in new branches. For example, do you still have paper brochures in a display for members to grab? Is that really what people are looking for? Does your staff roam freely in the branch or are they confined to a desk with a computer? Enabling the staff to be mobile and digital is a big piece to the Phygital transformation. You cannot expect the members to adopt digital technology if the staff cannot adopt the technology. Each staff member could have a tablet with the capability to teach each member how to use the technology, email or text the member information, open accounts or perform transactions from the entire branch. Telling a member they have to go sit with Suzy Loan Officer or Tommy Teller to do a specific transaction is not exactly confidence inspiring. However, having a staff member with nothing more than a tablet being able to walk the member through every possible thing they could do in the branch is a confidence inspiring  approach.

Have you ever watched an Apple product introduction? Here’s one.  Apple wants to be seen as the digital company.  But it also projects a sleek but appealing physical image. Everything is sleek, contemporary, inviting and if you think anything you see is there by accident, think again.

Nobody is saying that your credit union has to look like an Apple video. But take a lesson from Apple and know that appearances do matter. So do first impressions. It’s a phygital world.

 

Want to know more about digital transformation?

Consumers Say Boo To Your Digital Banking Products – Now What Do You Do?

Wrestling with Your Digital Talent Gap