Customer Effort, Member Experience, and Credit Union Digital Transformation

The American Customer Satisfaction Index (ACSI) is an annual survey conducted by the University of Michigan’s Ross School of Business. It measures consumer satisfaction with the goods and services provided across a broad range of industries.

This last year, the survey found that banks surpassed credit unions in customer satisfaction.

While it certainly doesn’t sound the death knell for credit union claims of better member experience, it raises some interesting questions—and serious concerns. And, in many ways, it reminds us that digital transformation is still a pressing need in the financial realm.

 

Changing Customer Expectations

One of the biggest drivers of higher customer satisfaction with banks is changing customer demographics. Millennials and Gen Zers make up a larger portion of credit union memberships. And their expectation for what makes “customer service” are decidedly more digital.

“Service with a smile” is no longer the bar by which service quality is measured. Rather, speed and convenience are much more important to them. And it makes sense, too.

  • Why deposit a check in a branch or ATM when you can use remote deposit capture on a phone?
  • Why apply for a credit card in branch when it can be done online?

The best member experiences are often those that present the least hassle. So, lower rates are no longer people’s primary concern. Most consumers are willing to pay extra for convenience.

In fact, the need for convenience is hinted at by the Customer Effort Score (CES). CES surveys measure how much effort it takes for various member interactions. And there is a strong correlation between effort and customer satisfaction. With less effort comes increased loyalty.

 

Why Banks Are Winning

Banks generally have a bit more money to play with. Consequently, they’re a little more likely to invest in products and technologies that aren’t immediately necessary. Their investments in digital delivery are paying off.

Many banks offer peer-to-peer (P2P) payments, mobile deposit, online or mobile account opening, streamlined onboarding, personalization, and 3-minute credit card or loan applications.

These capabilities aren’t just easy and convenient—they’re fast, too.

If credit unions can’t offer similar digital experiences, how can they keep up? How can they provide the member experience that tech-savvy consumers and younger generations want? How can credit unions meet expectations in a digital-first world?

 

Credit Union Digital Transformation to the Rescue

“Digital transformation” has been such a buzzword for so long that we’ve stopped using it. And maybe that’s because digital transformation means different things to different businesses. But that doesn’t mean it should be forgotten.

Credit unions need a robust digital transformation strategy if they want to compete with banks. They should ask themselves:

  • What are our members’ expectations?
  • Where can automation streamline our processes?
  • Is AI part of our 3-year plan?
  • Which transactions take too much time or effort?
  • What are the first steps towards providing digital convenience?

For some, moving to the cloud and upgrading older ATMs might be the first steps. To others, it could be as simple as switching to Office 365 and increasing security. To a few, it could mean office automation, member-facing digital conveniences, or even custom software development.

 

How to Beat Banks Again

Getting started is the best first step towards credit union digital transformation. Fortunately, the first step is easiest:

  1. Admit you have a problem. Just kidding. Sort of. But paying attention to the numbers is important. Don’t wait until it’s too late to decide that digital convenience is necessary for survival.
  2. Think about which processes or transactions need improvement. Don’t slow yourself down by thinking of solutions yet (but if a few come up, that’s great). Just identify areas of need.
  3. Pick one thing to work on. Now start brainstorming solutions. Get as wild as you want. After you have your list of possible solutions, consider what you’ll need to support each solution. (For example, if AI is in your timeline, you’ll need to be on the cloud.)
  4. Choose people with a good mixture of ability and enthusiasm to work towards your digital transformation goals. Give them the support they need to succeed. And most importantly, establish a timeline and frequent check-ins to ensure accountability.

Often, we’re too close to our own projects. We get blind spots. We can’t see the problems that seem so obvious to others.

If you feel that your blind spots may keep you from seeing your biggest needs, or if you’re nervous about moving in the wrong direction, consider getting help with strategic planning. We’ve written about a few strategic planning topics to get you started, but you might also look at various strategic planning facilitators.

Or, if you’d like to speak with someone about your digital transformation or strategic planning needs, simply fill out the form below!