The Vanishing Credit Union Gets Bigger

By Robert McGarvey 

For Credit Union 2.0  

The April CUNA Mutual Trends Report drops a paradoxical bomb that leaves us confused: are credit unions getting bigger? Or are they vanishing? 

First the good news: more of us belong to credit unions, reported CUNA Mutual.  “Credit union membership growth was on a tear during the first two months of 2018, adding 850,000 new memberships versus the 650,000 reported in the first two months of 2017.” 

CUNA Mutual went on: “Credit unions should expect membership growth to exceed 3.5% in 2018. This will push the total number of credit union memberships to 117.6 million by year end, which is equal to 33% of the total U.S. population.” 

Roll back to 1960 and, per NCUA data, just 6 million of us belonged to federal credit unions.  A similar number belonged to state chartered institutions. That’s 12 million total, out of a US population of 180 million.  That’s about 6.7% of us, far below today’s one in three. 

Plainly, a lot more of us belong to credit unions now, probably because of expanding FOMs and also because many credit unions offer tempting deals – for used car loans, for instance, and in some markets home mortgages – that bring in members at least for those specific products. 

More credit unions also are working smarter and better at communicating that their membership is pretty much open to all. There remain some of us who believe they can’t join a credit union because they don’t belong to a union – but those numbers are shrinking. 

Member growth is good.  But do the CUNA Mutual data mean the credit union movement should pop open champagne and toast the good times? 

Maybe not. 

At least not just yet.  There’s more to digest in the CUNA Mutual data dump. 

Toward the end of the report, CUNA Mutual serves up these disturbing numbers: “As of February 2018, CUNA estimates 5,757 credit unions are in operation, down 240 from February 2017. The pace of consolidation in the credit union system is accelerating due to the following factors: retiring baby boomer CEOs, rising regulatory/compliance burdens, low net interest margins, rising concerns over scale and operating efficiency, rising competitive pressures, and members’ demand for ever more products, services and access channels. NCUA’s Insurance Report of Activity showed 9 mergers – 7 mergers were due to ‘expanded services,’ 1 for ‘poor[Text Wrapping Break]financial conditions,’ and one for ‘lack of growth’ – were approved in February with a merging credit union average asset size of $13 million. This is a fewer than the number of mergers reported in February 2016 with a merging credit union average asset size of $10 million. We are forecasting the number of credit unions will decline 250 in 2018.” 

Do the math. If the current rate of consolidation continues, by 2028 there will be a bit over 3000 credit unions. 

In 1960 there were about 10,000 federally chartered credit unions, per NCUA.   

As for the membership growth, CUNA Mutual sees it continuing, sort of.  “The membership gain was partly driven by the 502,000 new jobs created during January and February, according to the Bureau of Labor Statistics, and by the tremendous growth in credit union indirect auto lending. During the last few years credit union membership growth has been highly correlated with job creation with the seasonally adjusted annualized growth rate exceeding 4% over the last year. With job growth expected to slow slightly in 2018 to 2.2 million, we forecast credit unions to pick-up an additional 4.0 million members.”  (Emphasis added.) 

Many credit union executives, at least privately, of course grumble about indirect car loans because the “members” they bring in often limit their memberships to the car loan and they aren’t especially profitable. 

Add this up and what’s the meaning? Credit unions need to do a much better job of expanding their relationships with members.  It is great to have an expanding number of members, it is not so great not to be creating more solvent credit unions. 

The truly good news is that if one in three Americans belong to a credit union that is plenty of bulk to use to seek to grow the institutions organically.  For instance: get that indirect car loan borrower using a sharedraft account and a credit card and the credit union is onto something wonderful. 

The alternative is to join the thundering herd of dying credit unions, many of which are like wildebeest in the Tanzanian Great Migration, there essentially to be picked off by predators. 

Parse the CUNA Mutual data and just maybe the message is a double edged sword: grow membership, especially the right membership, and success may lie ahead. Or shrink into extinction. 

That is the stark choice in front of today’s credit union executives. 

Mobile Banking Rules – and Where You Still Stumble 

By Robert McGarvey 

For CU 2.0  

New research out of Javelin, sponsored by identity specialist Jumio, makes plain multiple facts and the central one is that digital banking rules and it does so across generations.  It’s not just a Millennial thing anymore. 

Another key takeaway: most financial institutions – eyes on you – stumble in many key places, particularly in deploying mobile banking. This is eroding member loyalty: they will sometimes simply flee to another institution. 

And security concerns continue to be a bother for many users, according to the Javelin research. Despite the fact that generally a mobile banking session over a cellular network is much more secure than one over an online network.  No matter. A lot of users remain very worried about safety and digital banking and the smart institutions are addressing these fears. 

What all this means is that mobile banking – increasingly the channel that matters in banking – is where credit unions have to double down on efforts to compete with the money center banks and the fintechs that continue to nibble at the user base of smaller, legacy institutions (talking about you, Amazon).   

Al Pascual, SVP, Research Director and Head of Fraud & Security at Javelin Research elaborated: “To capitalize on the growing demand for mobile banking as millennials grow in spending power, financial institutions must simplify user experience and address ongoing concerns around security and fraud.” 

Dive deeper into the report and the results can surprise.  For instance, although 76% of Millennials now regularly use digital banking, 77% of Boomers do – and, yep, that says Boomers have greater acceptance of the channel. 

But Millennials are way ahead with mobile banking. 62% use it monthly, compared to 34% of Boomers.  Also, claimed Jumio, “millennials report stronger satisfaction with nearly all aspects of mobile banking, compared to Generation X and Baby Boomers.”  

Millennials definitely have fewer gripes about mobile banking.  25% of them express concerns with the channel, compared to 33% of Gen X and 35% of Boomers. What kinds of concerns? 28% grumble about “hidden fees,” while 53% complain about ease of use. 

The study uncovered valuable findings when it focused on abandonment issues – why do we just close out when midway into a task in a digital banking session?  36% said they did so because “the process [was] taking too long.”  20% complained about authentication “being too time consuming.” 

Waste a consumer’s time – and the consumer is the judge of this, not a cautious credit union manager – and they will blow you off.  Just that fast. 

Here’s the kick in the head: “One-third of consumers respond negatively to their FI after abandoning a mobile banking activity,” reported Jumio. Understand: 7% decided to open an account at another financial institution.  And 13% shared their grumble about the experience with family and friends. 

That’s word of mouth you don’t need. 

In this regard, the Javelin research shows that account opening tools must cater to Millennials, mainly because they are the leading cohort when it comes to adding new accounts and services. Their chief complaint: it takes too long.  The antidote: speed it up. 

And make it easy to complete the tasks on a mobile device. That is becoming a crucial battleground. 

When it comes to authentication, Millennials in particular prefer biometrics, especially eye scans and facial recognition, according to the Javelin data.  Farther down the list are legacy modes such as QR codes.  Very probably institutions that want to stay on the cutting edge of Millennial acceptance need to roll out multiple biometric modalities. 

Another, key piece of advice from the research is: “Put security first (and make sure your customers know it).”   

“But… weave security into the customer experience in smooth, fast, intuitive ways.” 

Don’t make security into hurdles members have to jump – how many routinely forget passwords? – but do let members know that security protocols are always there, always protecting them. They want that reassurance even if they don’t want the hassles of dealing with in your face security challenges (what street did your father live on at age 6?).   

Sift through the Javelin findings and there is much to cheer credit union leaders. There is no way they can compete with money center banks in terms of branches – but they don’t need to.  What a credit union needs is top grade digital experiences, online and mobile, that include easy account opening and build in seamless security that will protect members. 

None of that is easy. 

But it all is doable at credit unions that embrace the digital mandate. 

MRDC 2.0 And Your Credit Union 

By Robert McGarvey 

 For CU2.0  

A new report from RemoteDepositCapture.com makes plain that mRDC now is a must for credit unions.  Declared the report: “mRDC is no longer a competitive differentiator, but instead a ‘must-have’ offering Financial Institutions need simply to remain competitive.” 

Without mRDC you just may not be competitive. That’s a stinging reality. 

This claim, incidentally, is underscored by a separate report, led by the Federal Reserve of Boston, that claimed 73% of the institutions it surveyed already offer mRDC and another 18% “plan to offer.”  Just 9% don’t have mRDC on their dance cards. 

Small credit unions are very much included among the adopters. Said the Fed: “ Even among the smallest respondents, 78 percent support or plan to support mRDC within two years “ It defined “smallest respondents” as < $100M in assets. And just 22% of them have no plans to offer mRDC. 

Big institutions are all aboard. Among institutions with assets >$1 billion, the Fed said 92% already offer mRDC and only 3% have no plans to follow. 

mRDC has become a must have.  That’s a key reality in today’s new reality where we have entered the era of mRDC 2.0. Now the focus is on new uses, more usage by members, and there also is a wholly new kind of thinking around mRDC fraud and how to combat it. 

A lot has happened to mRDC since 2009 when USAA debuted mRDC.  A handful more joined the chase in 2009-2010. But then the race was on at full speed inside most CUs to offer mRDC. 

Initially many credit unions grumbled about the fees associated with mRDC – fees charged by third party processors – but, by now, most larger institutions have simply decided to suck up the added costs, which incidentally usually are much, much lower than the costs associated with a paper check deposited at a branch. 

That’s a fact: mRDC saves a credit union money.  While expanding the convenience and utility of the account to members who now can make deposits while dressed in their PJs and sitting at the breakfast table.  That is cool and it ultimately is why mRDC usage will remain popular as long as paper checks circulate and these days about 17 billion of them get written in the US annually.  That number continues to slip down but it will be years before checks vanish (and aren’t we all waiting for the long predicted death of cash?). 

Face it: checks are hanging around and so will mRDC because it just is so much better than driving to a branch or to an ATM. 

John Leekley, CEO of RemoteDepositCapture.com, said many institutions have gotten increasingly more skilled at their mRDC offerings. 

A plus: Leekley pointed to data that shows a 35% year over year increase in mRDC transactions which means more checks are getting deposited this way. 

Are more fraudulent checks also getting deposited? Roll back the clock and that was a huge fear among many credit union execs, some of whom stalled when it came to rolling out mRDC.   

Today’s take is very different, said Leekley, who indicated that his survey found that “the vast majority (74%) of respondents indicated they had no losses directly attributable to mRDC.” 

That means zip. 

The big fear still revolves around duplicate deposits – depositing the same paper at multiple institutions – but the numbers don’t show there is a threat of any real magnitude. Leekley’s report goes on: “Exclusive to RemoteDepositCapture.com, the industry’s mRDC Duplicate Loss Rate in 2016 was just 0.035%, or 3.5 in every 10,000 items. To put this in perspective, according to the Federal Reserve, the industry’s overall return item rate was 0.4%, or approximately 40 out of every 10,000 checks deposit.” 

What’s next for mRDC? Most credit unions now appear to want to get more consumers depositing more items with mRDC. 

Leekley also indicated many institutions are giving a re-think to mRDC deposit limits. Traditionally, some institutions set very low limits, to manage exposure to fraud. But, said Leekley, more effective and more consumer friendly approaches involving smart use of big data are taking hold.   

Many institutions also are looking to increase business use of mRDC, added Leekley, who said this was a big frontier for many.  Exactly how will be a huge topic of discussion and exploration this year but know this: now is the time for you to begin to seek to push mRDC usage into new arenas. 

It’s a good tool, it works. Let its success fuel your institution’s.  

Rating the Mobile Banking Apps: How Do Credit Unions Fare? 

By Robert McGarvey 

For Credit Union 2.0  

 

The good news for credit unions in this year’s MagnifyMoney survey of mobile banking apps: Many do very, very well, even against money center bank competition. 

The bad news: Mobile banking apps, suggests MagnifyMoney, “have reached middle age.” That means, per MagnifyMoney, “overall, apps haven’t appreciably improved.” They have entered an era of complacency – and, listen up, that may well not be good enough. 

A point not in the MagnifyMoney survey is this: non banks keep buffing their apps, benchmarking themselves not against financial institutions but best in class apps such as Uber, Airbnb, Amazon, and Venmo.  Before patting yourself on the back with congratulations about the quality of your mobile banking app, ask yourself how you stack up against the really good consumer apps that many people spend hours daily using. 

Back to the MagnifyMoney data and the good news for credit unions: according to its survey, “in general, people still rate credit unions apps higher.  Probably unsurprising, as most CU users report a better experience in general. But traditional banks are catching up. 3 of the ten best overall apps are banks or direct banking apps. Last year all but 1 were CUs.” 

Not all is cheery news in the survey. Chew on this: of the 10 worst mobile banking apps, per MagnifyMoney, four are credit unions. On the dishonor roll are VyStar Credit Union, Patelco, Northwest Federal Credit Union, and Tinker Federal Credit Union. 

That means credit unions as a group can only get so giddy about their performance. Some appear to be in the same league as the worst banks. 

But credit unions do score high in the round up of most improved apps.  Among the top 10 are Teachers Federal Credit Union, CEFCU, America First Credit Union, Schoolsfirst, Alliant, and DFCU.  That’s six of ten. 

Among the top 10 most deteriorated apps are three credit unions: Desert Schools, Suncoast, and SECU of Maryland. 

As for the 10 best overall, credit unions on this honor roll include Eastman Credit Union, ESL, Redstone, SEFCU, Wright Patt, and Delta Community, Visions. 

The others in the top 10 are Discover, BBVA Compass, and Capital One. 

How reliable are these ratings? Probably not very but at least this is a start. The issue is that the MagnifyMoney ratings start by sorting out the 50 biggest banks and 50 biggest credit unions, then looking at user ratings for the apps in the two big apps stores (iOS and Android).  As far as that goes, it makes sense but let me ask: how many apps have you reviewed in the apps stores? 

Not many right. 

I scratch my head in trying to remember the last time I reviewed an app in an app store. And whatever it was it was because the app was just terrible.  Or I was angry for other reasons with the provider. 

So I’m unconvinced that app store ratings are the end-all when it comes to deciding the best and worst mobile banking apps. Nonetheless, my advice is to look hard at the top rated credit union apps – and by all means scroll through the actual user comments in the app stores. 

Do likewise for the worst rated. 

Now ask yourself the really hard question: what are we doing right now to keep our app fresh and relevant for a new generation of credit union members? 

What can we do? 

How can we press our vendors to really upgrade the app to help us better serve our membership? 

What do our members really want that they are not presently getting from the mobile app? Ask them if you don’t already know. 

There’s no rest for the weary. This just came in from Bank of America in an email blast to media about upgrades to its mobile banking app: “Express checking account application — With nearly one-quarter of all accounts opened digitally, Bank of America has introduced a new streamlined process for customers to apply for a checking account securely within the app. The enhanced, single-page design populates customer information into the application, simplifying the process.” 

Can you match that? 

What can you do to get there? 

What can you do to stay ready for the next wave of upgrades? 

The process just doesn’t end and, at many credit unions, there’s resistance to the idea that continuous improvement is a must with mobile apps. 

But give it up. Resistance is futile. With mobile banking, it has become improve or perish. 

Why MRDC Hasn’t Fulfilled Its Promise 

By Robert McGarvey 

For Credit Union 2.0

 

A new research report from Javelin on “Why Digital Banking Often Fails to Reduce Offline Volume” has an infographic that just popped my eyes. The subject: “Reasons Why Consumers Avoid Mobile Banking and Turn to the Branch or ATM for Check Deposits.” 

Javelin offers answers but, first, why do you think your members do this?  Especially when, in theory, nothing could be more convenient and simpler than using a smartphone at your kitchen table to deposit a check that came in the day’s mail. 

But lots and lots of consumers don’t use MRDC and even those who do, don’t always use it.  Why? The Javelin report explores that question. 

I can give you a hint about why. A few months ago I opened a new account at Arizona Central Credit Union.  I deposited a check for around $25,000, drawn on Capital One (closing an account), and I deposited it at a branch a few blocks from my apartment. 

Recently I opened the ACCU app to make a deposit and saw my MRDC limit is $500. I shut the app. 

I opened a Chase app, where my limit is many times that, and deposited the check. 

I’m not alone. 15% of the consumers who don’t use MRDC told Javelin they were afraid their check was too big. 

They’re probably right. 

Even Mitek, the principal MRDC cheerleader, in its 2017 Mobile Deposit Benchmark Report, moaned about this barrier to wider usage: “Deposit-limit policies at three quarters of FIs essentially represent penalties for customers who use mobile deposit, representing an unsustainable barrier to digital migration and growth….Many consumers state they have been prevented from using mobile deposit by the FI’s dollar limits, yet conversations with industry executives tell us that advanced risk management policies can enable customer-friendly deposit limits that also limit misuse.” 

Yep, and that’s been true for years. But still most credit unions retain absurdly conservative deposit limits. 

As for long holds – and I have personally seen holds as long as seven business days on a mobile deposit – there is no defensible reason for the practice, other than a desire to thwart MRDC usage. 

Could be that’s exactly what some credit unions want to do. Processing fees are involved with deposits via vendors such as Mitek. Force the consumer to walk the check in and there’s no Mitek fee. 

But maybe there also is no consumer, as the consumer does as I did and calls up a friendlier app such as Chase and makes the deposit. 

Note, too, Javelin said 17% of consumers who did not use MRDC said their reason was that “I needed the funds quickly.”  Long holds chase away members. 

Probably the biggest barrier to MRDC usage, per Mitek, is insecurity about the technology.  Reported Mitek: “Fear of fraud is the most powerful impediment to widespread mobile deposit[Text Wrapping Break]adoption, cited by 43% of non-users from large FIs. FIs must unequivocally assure customers that mobile deposit is every bit as secure as an ATM or bank branch. Immediate feedback and receipts upon deposit acceptance, and notification of funds availability will help resolve these fears. Walking customers step-by-step through their initial experience may also alleviate[Text Wrapping Break]worry, as fear over making a mistake is holding back 34% of non-users at large FIs.” 

According to Javelin, 14% of non users said: “I didn’t feel safe depositing a large check via the phone.” 

A last, huge obstacle to MRDC usage – fortunately seen at ever fewer financial institutions – is charging fees for MRDC. That never made sense and certainly doesn’t make good business sense today.  Reported Mitek: “In 2017, for the first time, none of the major banks reviewed charged a fee for standard processing of mobile deposits. Still, worries over fees remains a block to nearly one out of three FI customers. Therefore, marketing the costfree nature of mobile deposit is an imperative to boost channel migration.” 

Now, just maybe MRDC will never capture all deposits. Javelin research found that 27% of non users said they had to go to the branch for other reasons. 32% said they had to go to the ATM for other reasons (presumably withdrawing cash).  So they made their deposits through those channels. 

But there remains huge growth potential for MRDC if credit unions raise deposit limits, erase unnecessary holds, stop charging fees, and go on the offensive to assure consumers that MRDC is as safe as making a deposit at an ATM. 

That’s because, among those who do use MRDC, a consistent comment according to Mitek is praise for the “ease of use.” 

But there’s even hope for capturing non-users. Advised James Robert Lay, CEO of Digital Growth Institute who specifically addressed how to gain usage by those who so far are resisting MRDC: “What will increase mobile deposit use is credit union staff working with account holders that come into the branch to deposit checks. Hold account holder’s hands (and their phone) to guide them through the process. Heck, employees might find the account holder does not even have a credit union’s mobile app downloaded to their device.  

It’s a bit of a paradox but to increase digital product use requires human interaction and intervention as change is hard, even though the mobile deposit is easy.” 

So right. So smart. 

Credit Union Data Analytics: Put the Community in your Fees!

If you work for a credit union and are looking for ideas on how to leverage key data to improve your member service or overall credit union member experience, then this post is for you.

This is the first post of an 8 part series. If you want the full guide “Almost 99 Credit Union Small Data Hacks Guide” click here!

Credit Union 2.0 – A Guide for Helping Credit Unions Compete in the Digital Age covers in depth both big and small data for credit unions. There are six types of data that your Credit Union should be aware of:

  1. Digital Analytics – Desire
  2. Profitability – Fit
  3. Wallet Share – Depth
  4. Transaction – Triggers
  5. Design Data – Predictive
  6. Execution – IFTT (if this than that)

A hallmark of building trust digitally is personalizing data in marketing and service within the entire member experience. If you’re wondering where to start, there is one particular area that I believe credit unions can immediately to enhance the member experience: fee data. Here are 16 great examples of how to do this:

Data Point Problem Action
Overdraft Protection = Not Setup Charging a member an overdraft fee when they have liquidity is just like poking the member in the eye – be proactive and avoid the problem! Run a monthly report to determine any members with over $X in their savings account who do not have Overdraft Protection setup. Turn on the feature and then send an email to the member letting them know! Click here for more details.
First Overdraft Let’s face facts, the first time a member goofs and overdrafts, a credit union is going to reverse the charge anyway. So, make this process automatic and a positive experience for the member. You will score major member experience points! Watch for the first overdraft on a new member account – if triggered – auto refund the overdraft fee and send the member an alert (via email) that the credit union already took care of it.

 

Post a video or explanation of how to avoid the fee on your credit union’s website and include a link in the email.

Minimum Balance Fee Consistently charging a minimum balance fee is profitable but not in a member’s best interest. On the 3rd time you charge the fee, trigger an email to the member on how to avoid the fee or make a recommendation to switch to another account type to avoid it.
Paper Statement Fee Charging a paper statement fee repeatedly is painful and reminds the member of a negative experience. Most likely the member is simply too busy to make the change. Send an email on the third fee which includes a one click opt in to electronic statements.
Birthday Fees Sending a generic birthday card to a member isn’t really personal. Send a birthday card, but go one step further and reverse that member’s last fee or give them a coupon for their next one.
Foreign ATM Fee Charging foreign ATM fees does one thing: reminds your member that maybe you aren’t as convenient as they would like When a member gets a foreign ATM fee, send them a link to your “Foreign ATM Fee Avoidance Guide” on your website that helps them see

A) Closer ATMs

B) An alternate way to get cash without paying the fee

Cashier’s Check or Money Order Fee Nobody likes paying to get their own money. Period. Make this a social cause. So, if the member has to pay a fee then let them know that a portion of the fee goes to support a local charity or cause that benefits their community.
Card Replacement Fee It’s painful when your card gets lost…empathy or a gift from the credit union can go a long way. Waive the fee the first time a member loses his/her card and trigger an outbound email on key ways to protect a card. Make the email fun and call it your Credit Union Member Ninja Strategies Guide.
Check Image Fee This is a classic block buster fee. It is 2017…your checks should be digital and free through online banking. If the member wants the check printed in a branch, send them a link to a video showing how to pull the image through online or mobile. As a follow-up a week later, send an email on how to use bill pay or your peer to peer payment tool. Most members will appreciate the relevant education.
Stop Payment Fee You’re already having a bad day. You’ve lost your checks, and now you have to a pay a fee that may or may not accomplish anything.  Send the member a video via email explaining what their risk is related to stolen checks and also explain how to monitor their account.
Withdrawal Limit Fee If this happens once or twice, then the member most likely has the wrong account type. If it happens three or more times, it is just abusive. Trigger an email on the 3rd fee with a one click offer to switch account types and/or details on how to avoid the fee.
Low Balance Fee Sometimes members need change – be proactive about helping them easily solve that. Trigger an email on the 3rd fee with a one click offer to switch account types and/or details on how to avoid the fee.
Inactive Membership Fee Let’s face it, the member most likely has one foot out the door already…if not both. Create a “Member Save” package – Find a funny personal way to get the member’s attention. Perhaps it’s a meme or a personal video message from the CEO – either way – find a way to reconnect as a human and maybe you can turn it around and keep the member.
Return Mail Fee The person moved and didn’t tell you. It turns out you can get their new address if you have their old address. Go ahead and do this automatically and send an email alert to the member!   Check out how here
Wire Transfer Fee Sometimes they just need to send a wire Make it a little better by donating a portion to their favorite local cause (give them choice).
Late Payment Fee Nobody feels good about being late, and this fee can easily upset a member even if they were late. When it first happens, refund the fee and send the member an educational video/article on how to avoid the fee in the future. The second time it happens,  offer the member a skip a pay in advance for the fee. If it happens a third time, schedule a call to help understand the issue or provide an educational overview of how it might impact their credit score.

Many credit unions use fees to change behavior, and there is nothing wrong with that! While fees are an important tool, they are also a prime opportunity to embed compassion, empathy and education and turn a potentially negative member experience into a positive one.

Want to learn more about how your fellow Credit Union leaders are using data? We invite you to join our Credit Union 2.0 Strategist Group where over one thousand industry leaders comment on new news and trends while sharing and learning from one another.

This is the first of a 9 part series. If you can’t wait for next week and want the full “Almost 99 Credit Union Small Data Hacks Guide” click here!

What’s Not In Your Members’ Mobile Wallets

By Robert McGarvey for Credit Union 2.0

Two stats jump out of a PSCU and Javelin report entitled “The Credit Union Guide to Opportunities in IoT, Biometrics and E-commerce.”  Credit union members love their smartphones -80.9% own one. That’s roughly comparable to big bank customers – 88.4% of them own a smartphone. 

Where credit union members falter however is in mobile wallet usage. 46.3% of big bank customers have used a mobile wallet – such as Apple Pay – in the past 90 days. But just 10.8% of credit union members have. 

In the past week 3.7% of members have used a mobile wallet. 19.3% of big bank customers have. 

Those stats have to scare you. Credit union members have smartphones. They just aren’t using them to pay. Big bank customers are 4x more likely to pay by phone. 

Why are credit union members so slow to adopt mobile wallets? It’s all the more puzzling when so many big retailers have embraced Apple Pay and that typically also means Android Pay and Samsung Pay too. It’s now easy to go a day without ever using plastic cards, from coffee in the a.m. at Starbucks using its app through stocking up on dinner groceries at Trader Joe’s or Whole Foods with Apple or Android Pay. 

But there just aren’t many inside credit unions. 

Mobile wallet adoption is also fueled by an increasing number of online and in app merchants that have begun to accept Apple Pay or PayPal. That means a wary consumer doesn’t have to input credit card info and for some of us it’s a plus to just pay with Apple Pay.  

PSCU and Javelin said that the relatively low credit union usage of mobile wallets compared to big bank customers leaves credit unions “vulnerable.” 

So it is worrisome that comparatively few credit union members use mobile wallets. 

Partly this anemic usage is because credit union members skew older and the demographics that have most jumped on mobile wallets are younger 

Another factor: few credit unions have actively marketed mobile wallets to their members. Initially, when Apple Pay debuted, as credit unions rolled out the tools they blew trumpets to announce they had the latest technology. But now many are silent. Plainly they would rather tout other products to their members, in part because mobile wallets such as Apple Pay cost a credit union money while many other products – such as a credit union’s own credit cards – make the institution money. 

That’s understandable but also short-sighted. Mobile wallets are the future of payments and an institution that plans to hang around needs to be at the forefront of surging consumer usage. 

Look again at how much more mobile wallet usage there is at the big banks. The disparity with credit unions is frightening. 

At least some big banks have further fueled mobile wallet usage by doling out perks to customers who use them. Chase for instance has promoted mobile wallet usage with a promotion that adds a bonus point for every dollar spent with mobile wallets on some credit cards.  

Wells Fargo also has offered sweeteners to mobile wallet users. 

What’s a credit union to do? Definitely, think about offering promotional bonuses to encourage usage. 

But there are free tactics too. Start by reminding members of the wallets supported by your institution. Make it easy for a member to find this out. DCU in Massachusetts does this well. Study its pages 

Navy Federal, the first credit union to offer Apple Pay, is another to study 

Then do as PSCU and Javelin advise: “The key challenge for credit unions will be persuading their members to load their mobile wallets with the credit union’s debit and credit cards instead of those from another banking institution.” 

How to get there? Ask – and keep asking. 

It’s not easy to get a member to change a credit card preference that has been entered into a mobile wallet. Many have a faint memory of what card is associated with Apple Pay. 

Ask and ask again.

3 Ways to Get More Engagement on your Facebook Page

By Amy McCaughey

Marketing has never been more important for your credit Union. With how much time your members and potential members are spending online and engaging with social media, it is imperative that your Credit Union be thinking about how to better engage with your members online. Your Facebook page can no longer be an afterthought, and online marketing has become an important touch point with your members.

For those of you who are already believers, and have been posting regularly and still struggling to get the engagement you’re looking for, we get it. A digital presence doesn’t happen overnight. It takes time to build a community of followers and then have those followers get used to seeing you post regularly and then eventually actively engage with you online. Here are three strategies we’ve successfully used to boost Facebook engagement.

1. Surveys & Open-Ended Questions

Asking your followers questions & using fill-in-the-blank posts are some of the easiest ways to get people to engage with your posts. A mix of serious and funny/random is best.

Some great examples are:

  • What is your favorite thing about your Credit Union?
  • How are you celebrating the first day of summer?
  • Vacation Destination: Beach or Mountains?

2. Hyper Relevant Content That Your Members Care About

If you know what your members care about/are searching for online, you can create hyper relevant content that your members will click on and share.

For example, a post about your mortgage loan rates may not get many likes or clicks. However, if you post an article/blog post about the top five things to consider when buying a new home or what to think about when saving for a home, you will find more people are likely to read it and share it. Your members are shopping for a home – not a loan.

3. Animal Memes

Want to engage someone online? Share a funny photo of a dog or any other cute animal. A common misconception amongst financial institutions is that your digital presence has to be all serious all the time. Don’t be afraid to let the personality of your organization shine through. Plus, who wouldn’t like this?

CUNA Council Interviews: OnApproach’s Paul Ablack on Real-Time Analytics to Enhance the Member Experience

At CU 2.0, we know that the member experience is critical! And Credit Unions can use data to start thinking about specific member experiences and how those can be replicated.

OnApproach President/CEO Paul Ablack joins CU Broadcast in the Studio Lounge at Cuna Tech to discuss his conference presentation: “Real-Time Analytics to Enhance the Member Experience.” Paul provids key takeaways, importance in this area for credit unions, and much, much more.

Click on the video below and let us know your thoughts!