It’s the Credit Union podcast! CU 2.0 is excited to bring you the twenty-third in a series of podcasts from Robert McGarvey. Welcome to the CU 2.0 Podcast, regular interviews with credit union leaders, thinkers, movers, shakers and more.

If Kasasa were a bank branch network, it would be the nation’s fourth largest and it says that sometime this year it will overtake Bank of America and be the 3rd biggest.

Surprised? You bet. Probably you know that Kasasa has been building up its customer base for digital banking products – checking in particular – but now it is big enough where it’s tooting its horn.

This”branch network” isn’t a consumer-facing product – CO-OP Shared Branching it is not – but what’s interesting is that lots of FIs, some 907 community banks, and credit unions, now have joined together to offer Kasasa products, particularly the free, rewards-based checking.

And that’s also where Kasasa has a real plus – according to company CEO Gabe Krajicek, Kasasa consumers have free access to essentially every ATM in the US. When fees are imposed, the consumer is reimbursed.

And that’s an enormous perk for credit union members when many institutions have ATM fleets that can be counted on one hand.

Think about the enormity of that plus for credit union members in Kasasa institutions.

Kasasa also aims to put high-quality digital products in the hands of consumers because, said Krajicek, often consumers say they couldn’t belong to a credit union because the digital is no good.

But what if it, in fact, is good? With the right digital products, community institutions can and will survive, said Krajicek.

Along the way, Krajicek- whose company serves both community banks and credit unions – says community institutions would better serve their interests if they recognized that they have more in common and in particular they have in common a shared enemy and that’s the money center banks.

It’s an interesting thesis. So often community banks and credit unions are reflexively Hatfield and McCoy. But what if they joined together to oppose a shared foe?

What if? What if cooperation flourished? It’s a big vs. small battle, he said.  And nowadays it’s becoming a life or death struggle where many community institutions are vanishing.

Krajicek tosses out big ideas. Come along for the ride in this CU.0 podcast.

Listen here.

Check out other podcasts in the series here!

It’s the Credit Union podcast! CU 2.0 is excited to bring you the twenty-second in a series of podcasts from Robert McGarvey. Welcome to the CU 2.0 Podcast, regular interviews with credit union leaders, thinkers, movers, shakers and more.

What do you think when you get an alert from your credit union offering you a 2.9% car loan – and you already have a 1.9% car loan that you got two years ago from the same institution?

Duh, right?

Lou Grilli, an executive at payments CUSO Trellance, thinks a lot about exactly those kinds of questions and he believes that for credit unions the solution will come through smarter, faster data analytics.

His opinions are rooted in information gleaned from the experiences of the roughly 2000 credit unions that own Trellance.

What your member will do, or need, tomorrow already is known in today’s data. You just have to look at it.

And Grilli thinks data analytics can unlock tactics for encouraging more member use of your institution’s cards – which is a goal of just about every credit union.

Along the way, Grilli also talks about the future of contactless cards, also what to expect from digital wallets such as Apple Pay.

Payments in the past five years have changed much more dramatically than they had in the preceding 25 and Grilli has a ringside seat.  That’s why he is worth a long listen in this podcast.

Click the photo below to listen now!

Check out other podcasts in the series here!

It’s the Credit Union podcast! CU 2.0 is excited to bring you the twenty-first in a series of podcasts from Robert McGarvey. Welcome to the CU 2.0 Podcast, regular interviews with credit union leaders, thinkers, movers, shakers and more.

Cornerstone Advisors’ Ron Shevlin’s report on “What’s Going On in Banking 2019. Is the Party Over?” is out and he’s in the CU2.0 Podcast to share some of his findings.

Read the report here.  It’s free.

To compile the report Shevlin surveyed some 300+ senior executives in financial institutions – around 120 in credit unions – and they spill their views of their tomorrows.

Has the Trump bump become the Trump slump, asked Shevlin.

A lot of the report focused on technology and what financial execs see as musts.

Some 63% of credit union executives describe their digital banking as future ready – which prompted this reporter to choke and then ask, are they doing marijuana-related banking and smoking too many samples?

Listen to the podcast to hear Shevlin’s views.

As always, Shevlin is an independent, sometimes quirky viewer of financial services. That’s why his viewpoint matters.

Listen up and learn. Here’s the podcast.

Click the photo below to listen now!

Check out other podcasts in the series here!

It is imperative that your Credit Union has a social media strategy in today’s digital climate. However, what is even worse than having no social media strategy for your credit union is having a bad social media strategy. It is important that you avoid these three social media mistakes at your credit union.

1) Promos, Only Promos

In case you are wondering, your members are not logging into their social media and following your page so that they can see your latest auto loan rate offer. Majority of Americans have a social network profile, so it’s obviously essential for your credit union to be present on these platforms. However, no member wants to be jolted out of their online experience. When your credit union is posting on Facebook, don’t just share about your products and services and talk on and on about yourself! Embrace the platform and share content that is hyper-relevant to your membership.

2) Not Having a Clear Strategy and SMART Goals

So the direction has come down from above, and social media is now a push for your credit union. Your marketing team starts firing off Monday motivational quotes, polls, and promoting your blog content. Months go by. Were you successful? Who knows? If your team did not spend the time to set clear strategies and SMART goals that can be measured, how can you possibly know if you have been successful? This is as important if not more important than the content that you are actually publishing.

Now, what do we mean by SMART goals? SMART goals are goals that are: specific, measurable, attainable, relevant, and timely. Setting these goals ahead of time for your credit union will ensure that your marketing team is able to ultimately measure the success of your social media efforts as well as the impact social media has on your return on investment (ROI).

In fact, take it a step further. Make sure your team knows the key performance indicators (KPI’s) that you will be measuring. Examples of these are:

• Reach (followers, impressions, mentions)
• Engagement (likes, comments, shares)
• ROI (direct sales revenue, lead conversions)
• Retention & Loyalty (reviews and ratings)

3) Not Putting Significant Budget Behind Social Media Efforts

Think about the amount of money your credit union spent on opening its last branch. Now think about how much your credit union spent on Facebook Ads last quarter. Branch traffic is on the decline but mobile and website traffic have never been higher. It is critical that your credit union invest in this digital transformation. Facebook advertising has become incredibly nimble and we are able to more closely target then we ever have been able to before. It is imperative that your advertising budget is adjusted accordingly.

Want to learn more about social media strategy for credit unions?

How To Use Social Media Effectively For Credit Unions

How to Optimize SEO for your Credit Union’s Content Using the 4 C’s of Content Marketing

The Right Content for your Credit Union’s Social Media

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?

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

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 plain 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.

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

 

Credit Unions pride themselves on customer service and being “customer intimate.” They are pioneers of brickand-mortar, customer-centric innovations such as branch greeter stations and branches that look more like an Apple store than a traditional bank. Providing great customer services and “knowing” our members is a large part of what the Credit Union movement is about.

When it comes to the digital world, however, many Credit Unions remain uncertain of the best ways to use digital technology and information to enhance customer relationships. At the same time as customers increasingly prefer online transactions, Credit Unions have been forced to give up some control over the online transactional experience. Most Credit Unions simply don’t have the staffing or dollars to customize online and mobile banking systems, and therefore must accept a mostly off-the-shelf solution that is, at best, parity with the rest of the market.

Leveraging digital technology to improve customer connections requires thinking beyond transactions as customer touchpoints. It involves using data to get to know your customers on a deeper level, to learn when and where to communicate with them, and to monitor and measure the effectiveness of your communication campaigns.

Remaining “customer intimate” in the digital world requires staying relevant in the lives of your membership. That means many more touch points and communication more frequently than in the past. It also means moving away from drive-by window advertising and postcards where you can’t really be certain of the effectiveness toward the digital analogs—web site, email, social media, blogs, and videos—where you can measure response and monitor interest over time. In the digital world, you have more opportunities to show your expertise in personal or business financial management to help members make solid financial decisions. Your digital assets are available 24 hours a day all year long, unmatchable with any other channel.

CU 2.0 has developed a set of modules and processes to help Credit Unions leverage digital technologies in order to provide exceptional member service. Effective digital communication can be more complex than traditional marketing campaigns. Your strategy needs to consider the right mix of social media campaigns, blogging, videos, and ads. All of your campaigns must be linked to landing pages on your web site and set up with tracking analytics across all steps. Tracking the member journey allows the Credit Union to be on the same path, understanding what matters most for individual members, and providing information that is both timely and meaningful.

In this way, the journey to digital transformation is still member-centric. They key is to shift your focus to integrating customer data from multiple sources and being accessible to members via digital channels. Once you establish an enhanced digital understanding of members, you can make those insights available to staff, other digital systems, and even artificial intelligence and machine learning tools to enhance the member experience.

Digital transformation requires new tools and thinking, leveraging technology and automation to craft the personalized experience that our members now expect.

Want to know more about digital transformation? You may be interested in:

On the Digital Transformation Journey with Partners FCU’s CEO

MnCUN Interviews: CU 2.0’s Kirk Drake Shares How to Future Proof Your Credit Union

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

By Robert McGarvey 

For Credit Union 2.0 

 

“We are not moving fast enough. We need to move 2x or 4x faster,” said John Janclaes, CEO of the $1 billion Partners Federal Credit Union headquartered in Burbank, CA. 

In a wide ranging interview, Janclaes revealed exactly why he had put the credit union on what he describes as a journey of digital transformation – and he also talked about progress made. 

You might think Partners is a blessed credit union. It has enough assets to compete and it has strong SEG ties – it essentially is the Disney credit union and pulls membership from the many Disney companies, from the theme parks to movies and ESPN.  It also has two very different geographical hubs – southern California and Orlando, FL. It has a lot going for it. 

But three or four years ago, Janclaes looked at the competitive landscape and he had a worrisome thought: “Credit unions are in the crosshairs,” he said. He elaborated that the industry faces ever smarter, tougher competition from big banks and also fintechs and companies like Amazon.  “We need to keep up with that level of competition.” 

Not that many decades ago, credit unions, he said, were a well balanced three legged stool that offered better rates, better service, and better convenience because many members could bank at work. 

And then that happy bubble burst as consumers – increasingly – have demanded digital banking and many credit unions have faltered in the transformation from high personal touch and community based institutions. 

“We recognized we need to keep changing to remain relevant to our members,” said Janclaes.  

Fueling his thinking was a CO-OP funded study on digital transformation that found, in a survey of 221 credit union leaders, 88% said digital transformation is “extremely or quite important.”  And about half the respondents acknowledged their digital experience is “inferior” to top brands like Google and Apple. 

Janclaes wanted more for Partners, he wanted to offer members a digital experience that in fact rivaled the best of breed because – face it – those are benchmarks members use to grade what they get from their financial services providers. 

A big step was that he went outside to Kony and also the Boston Consulting Group to help Partners in its journey. “We wanted to work with trusted partners who are industry leaders,” said Janclaes. 

“We have de-emphasized inhouse tech innovation,” said Janclaes and that is because – looked at frankly – few credit unions have the scale and environment to attract the top tech talent that is needed to create a thriving 21st century institution. “We are picking where we can win.” 

What especially attracted him to Kony – which has done the bulk of the heavy digital lifting for Partners – is that it had a limited credit union background and also had had successes in very different industries such as retail and energy. 

“We did not want a credit union incumbent with a credit union mentality,” said Janclaes. 

Read that sentence again.  Credit union management orthodoxy is to vet potential vendors based on their resumes of past credit union hits.   

But Janclaes turned this thinking upside down. 

He elaborated that “we are getting better at picking strategic partners.” 

He also has taken an increasingly active role. “Ten years ago I was not involved with our tech partners. Now I am. I talk regularly with their CEOs.” 

He said he had full support from his board which, he explained, is composed of Disney executives. 

“Our sponsor sees us a value for the company and its cast members,” said Janclaes. 

A challenge, he added, is coordinating the new digital credit union with the traditional brick and mortar credit union  He indicated that every measure says that in fact is happening as Partners  has committed to offering an omnichannel presence that lets members pick how they want to interact. Most tasks – from account opening to joining the credit union – now can be done via any channel and that, believes Janclaes, is the future of credit unions that aim to thrive tomorrow. 

Along the way, Janclaes has recognized that the traditional credit union way of updating digital functions via an annual or semi-annual upgrade just doesn’t work today. “We need to do this much faster, 3x, 4x.  We have started with 2x – that’s the business problem now in front of us.” 

“We want to make incremental improvements at a rapid pace,” said Janclaes. 

This, he said, represents a massive “mindset shift” in credit unions that, traditionally, have aimed for perfection and that has taken time. 

Today calls for faster and that means, often, perfection won’t be there. 

But what happens will nonetheless be good enough. 

That of course is how all tech companies think.  

“Our members are already ahead of us in thinking that way,” said Janclaes. 

And now Janclaes is determined to bring Partners to that mindset too. 

 

An 11 minute video on the Partners digital transformation is here.  It’s worth a view by any credit union manager, or board member, contemplating the next steps in their institution’s digital journey because that has become a ride no one can refuse.