Three trends to achieve digital banking success
With all areas of the financial services industry feeling the effects of COVID-19 over the past 12 months, digital banking has continued to accelerate and shine as the future for financial institutions.
While the rise of digital banking was taking place far before the pandemic, its increased adoption has continued to grow among financial institutions and their members. Many credit unions find themselves at a crossroads; they understand the importance of digital banking platforms but struggle with how to correctly implement these new technologies. Credit unions must handle digital banking with care and take advantage of current industry trends.
To help assist your credit union, here are our top three digital banking trends to be aware of.
Connecting in-branch and digital experiences
The effects of the COVID-19 pandemic have caused many financial institutions to question the future of their branch locations. With many of their members adapting to new ways of digital banking, their level of comfort and trust is increasing with digital channels.
Even though digital banking is becoming more popular with members and how they choose to make their daily banking transactions, the in-branch experience remains unmatched. It is up to the financial institution to find the correct blend between the two engagement points with members to create the optimal experience. Physical locations are no longer the main point of contact between you and your members. Properly integrating the experience of in-person banking and digital banking will be key for financial institutions going forward.
The first step is understanding where your members are performing certain actions and thinking about how you can improve those touchpoints. Just as members are now more comfortable with performing their day-to-day banking transactions online, they are also more confident with discussing personal finances through digital channels, such as online chat and video. Using these channels to your advantage can help relieve pressure on your physical branches.
As your financial institution's digital channels continue to evolve, so must your physical branch
Integrating both your credit union’s in-branch and digital banking experience takes consistent evaluation to maintain a certain standard with both touchpoints. The process will continue to evolve with your financial institution and the digital opportunities you’re providing.
Collecting and correctly interpreting data is an invaluable skill for credit unions. Credit unions are facing more competition than ever before. The edge that credit unions have over competitors comes in the relationship they have with their members. This relationship is built on the understanding of the wants and needs of members.
A mistake that happens far too often is financial institutions try to offer members everything they possibly can in their digital banking platform. This large and complex offering can ruin a digital banking experience and only confuse members more. A proper digital banking experience must be tailored to your members, not all credit union members.
As not every financial institution has the same member segmentation, it is important that individual institutions provide a unique set of services to their members based on member needs. By interpreting member data, financial institutions can correctly determine what digital banking services they should be providing. This process starts with a clear definition of who your members are and what they need from your financial institution. After using member data to correctly identify your segmentation, a proper approach to your digital banking services can be formulated.
The credit union business model focuses on serving their community and meeting the needs of members who live there. While this “all in one” model has worked for many years, competitors are finding opportunities to fill gaps in niche services. The onus is now placed on the credit union to determine what services their members require. As credit unions are often smaller organizations, they have the agility to pivot and provide these services. However, this pivot is often not occurring fast enough. Analyzing member data is not a practice that can simply be done once, it requires consistent revaluation.
In addition to “over-providing” services, financial institutions often fall into the trap of providing services they think members want, based on anecdotal evidence and gut feelings. They create a digital banking experience that they think is best without asking members what they want in a digital banking platform. The financial industry no longer works in this way. Now, the control has been placed in the hands of the members. By not analyzing and listening to members, financial institutions are at the risk of losing members to competitors faster than ever before.
A key theme in our other trends has been member experience. While in-branch member experience seemed quite simple before, digital banking has added a whole new layer for members to experience your services. For many credit unions, this poses a challenge but can be an opportunity if handled correctly.
Being confident in the digital banking services you’re providing to your members is the first step in successfully reaching your members on a digital channel. Just as it is important to use member data to support your services, it is important to bring these services to light with members.
While many Canadian credit union members are learning how to navigate digital banking platforms for the first time due to the pandemic, the financial institution is responsible for continued engagement with members to ensure they understand how to use these new platforms.
Whether is this through recommendations, rewards or offering support, many members need guidance when using these new digital channels. Offering assistance through the digital platform helps to replicate the in-branch experience that members are used to. Many members still need time to fully develop trust with digital banking. This trust is integral to achieving the desired member experience.
The rise of digital banking will reach a point where members must conduct most of their banking digitally. When this point is reached, Canadians will look to financial institutions that provide a simple, trustworthy service. Building this trust and education is a process that must be started now.
The opportunities of digital banking seem endless for credit unions. Credit unions now have the chance to reimagine their organization and how they are serving their members. However, the member must be placed at the center of the experience. With competitors seeking advantages in the market, your credit union needs to prepare your digital banking strategy.
Celero is a leading provider of digital technology and integration solutions to credit unions and financial institutions across Canada. Clients trust Celero’s proven track record delivering innovative banking technologies, digital and payment solutions, cloud computing, outsourcing, IT and advisory services.
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