Credit Unions are behind on several key trends—especially when it comes to technology. One the one hand, credit unions must balance technological needs with service, growth, and profit. Yet those needs sometimes compete with outside factors such as fintechs, compliance, IT security, and ever-changing regulations.
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.
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.
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.”
In my last blog, I talked about cleaning up data. Ugh. It is hard work, and I was primarily focusing on core system data. Today I want to suggest thinking about new ways Credit Unions can use existing data.
Most Credit Unions have a heartfelt mission of supporting member’s financial well-being. Yet in some ways – we simply do not engage members enough. What! Hear me out – I’ve got an idea…
Credit Unions can use their data in creative ways to be more relevant to our member’s lives. Let’s take the example of a car loan. We spend a lot of effort and money on “selling” the loan. We offer great rates, we make the buying process convenient, and we spend hundreds of thousands of dollars on systems that will make the loan application process easy with features like automatically creating their membership or integrating with online banking. OK, we got them, they purchased the car and we closed the loan. We did it!
That member now has a 60-month loan and, if they pay on time, we’ll send them their pink slip in 5 years. For many Credit Unions, this scenario is the extent of the relationship between the credit union and the member’s car loan.
It’s all about the data.
What if we used the data we have about car loans to make relevant offers at relevant intervals for something that a member wants? (I know, you may be saying you already make offers at regular intervals, but staying relevant means offering something the member wants.) In the case of a car loan, how about offering a credit card at 18 months (when cars typically need new tires) and double or triple the points off on tires? For an even sweeter deal for the member, work with a box store or a local tire shop to provide even deeper discounts.
The Credit Union gains a more engaged member and credit card revenue. The member gains a deal on a credit card and a discount on something they know they need to purchase soon anyway. The local tire shop gains more awareness and local business.
Now, if you are an even more entrepreneurial community Credit Union, you can offer business customers faceless data. In the auto loan example, if the tire store could see how many tires your members purchased over the last year, they could use that data to improve their marketing efforts and the timing of their advertising and discount offers. They would not be able to see individual transactions, only the aggregate information on purchases.
Now you have an engaged business member that is only able to get that information from your Credit Union.
The digital journey requires us to find creative and innovative ways to use data to help our members while becoming more engaged in their lives, not just their financial lives. Becoming more innovative with information is a transition that Credit Unions must embark on to continue to be relevant!
Read more about Credit Union Data and Data Analytics:
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 a 9 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:
- Digital Analytics – Desire
- Profitability – Fit
- Wallet Share – Depth
- Transaction – Triggers
- Design Data – Predictive
- 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:
|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!