We spend a good amount of time interviewing credit union (CU) members one-on-one to understand how they manage their finances. While we have an outline for these interviews, we approach those conversations with one goal: to understand their behavior. Many of our clients task us with finding out how satisfied customers are with their organization. However, we generally don’t ask that question. It is more important to understand WHAT they do and WHY they do it, rather than what they say.
Our CU clients are often surprised by what we hear from their members. Here is a rundown of the most surprising things we have heard lately:
- They’re not coming to you for advice.
If you spend as much time as we do talking to various executive teams at credit unions, you might think that all CUs have huge teams of finance experts who spend a lot of time giving their members advice. Most CU members don’t reach out to their credit union for advice. Most often they get advice from friends, families, peers, or popular advisors like Dave Ramsey. Even those who do reach out do so because they have formed very specific relationships with people on a financial institution’s team. For example, we found a group of Brazilian immigrants that always went to a specific Brazilian-born teller for advice.
- They’re hacking products.
Talking to consumers about how they manage their finances is an investigation into human ingenuity. For every person that uses Mint to track their expenditures, there are thousands that have devised their own paper tracking sheets, spreadsheets, and databases. Here are a few examples: Some consumers we have spoken to have recreated the ability to track their personal “profit” (similar to what you’ll see in Simple’s “safe to spend” offering) through the creative use of interconnected savings and checking account tracking. Some consumers we’ve spoken to have figured out that the fastest and most convenient way to transfer funds between financial institutions (FI) is to write a paper check to themselves and immediately deposit it using their mobile banking app to deposit it at their other FI, bypassing any sort of electronic transfer at all. Finally, we met a programmer that quit his job to be a stay-at-home dad. He spends the first part of his early morning sweeping funds between accounts, manually creating zero-balanced accounts, using three different FIs. We were curious why he would spend his time doing this and he answered, “because it is fun.”
- They don’t like branches.
Traditional bankers have a rosy picture of member and customer attitudes towards doing business in a physical branch. Credit union executives tell us that members love to go to the branch due to convenience and the sense of connection they have with the staff. What we’ve found, however, is that consumers think that going to the branch is a chore. When we ask about using digital or other channels, it generally leads to a discussion about the shortcomings of their CU’s digital offerings (see item 5). Making assumptions about who is going where to complete banking transactions can lead CUs down the road to bad investments. For example, in one case, a set of credit union executives told us that the members who visited the branch were older and set in their ways. What we hypothesized, and later confirmed with data, was that this particular CU had members of all demographics who preferred going to the branch. Generally, what we’ve seen crop up time and again is the “branch paradox.” Consumers still tell us that their choice in FI is based on branch proximity or quantity. Bankers tell us it’s because the consumer wants to make sure they can go to a branch when there are problems. Consumers contradict that by sharing that they wouldn’t go to a branch when there are issues; in fact, their first thought is calling the contact center. Without a strategic plan, a credit union branch can end up being an expensive billboard rather than the hub of member interaction they perceive it to be.
- They’re already filling the gaps.
Gaps in CU solutions are being filled by alternative financial services and customers don’t have any reason to tell their CU. Several years ago, we heard bankers being surprised by the success of Venmo. They would say that their customers hadn’t told them about a need for person-to-person payments. “How is this new service successful?” they had asked. More recently, consumers are adopting more “buy now and pay later” (BNPL) fintech services like Affirm. FI execs are once again surprised by the success of BNPL schemes. FIs that wait to hear about an unfulfilled need will always lag behind the market.
- They don’t like using your digital banking.
Digital banking isn’t as intuitive as the CU, or their vendors, think. While traditional bankers have some preconceived notions, digital bankers also are guilty of making assumptions. The heads of digital banking often tell us that their digital banking experience is intuitive and matches their competitors, feature-to-feature and the problem is customer adoption. Consumers tell us a very different story. Most of the off-the-shelf digital banking solutions still suffer from bad user experience design. Digital banking vendors improve the experiences by whatever is most popular for their client FIs. The resulting experiences become confusing. For instance, we spoke to a consumer that banks with a credit union and a large national bank. She reported liking the national bank’s app over the CU one. She felt the national bank’s app had limited functionality and was simple to use, while the CU had “too many features.” Comparing the two apps function by function, the national bank has significantly more features, but the user experience was superior.
- They don’t act their age.
If we had a dollar for every time we hear a banking executive tell us that Millennials and Gen Zers do this and Boomers do that, we’d be rich. We have interviewed Gen Zers that don’t use mobile apps and go to the branch even during the pandemic. We have interviewed Boomers that haven’t been to a branch in years. We have also interviewed octogenarians who have not visited a branch in decades and actively helps their friends with “computer banking.” Consumer behaviors cut through all demographics. Bankers that continue to make assumptions based on age or ethnicity are continuously missing the mark.
- Their spending doesn’t match their income.
Like the item above, there are some deeply held assumptions in banking around income. We hear that people of modest means are living on the edge, they use credit cards as a stop-gap, and cannot find their way out. On the other end of the spectrum, consumers that make a lot of money are efficient savers, plan for the future, and are great banking customers. What we’ve learned is that those assumptions are wrong. We have interviewed people living on minimum wage that have figured out a way to budget, save, and even invest. Conversely, we have talked to consumers that command large salaries that are living paycheck to paycheck, are overextended, and don’t have a clue how to budget, save, or spend less. Financial literacy is needed for all demographics and critical for the hard-to-reach, disengaged consumer.
- They want digital banking to measure up.
Most of us that have some involvement with UX often tell our clients that in digital they aren’t up against other FIs but against all other digital experiences. We’ve learned this from our interviews. Banking consumers often say, “why can’t my bank do what Google/Apple/Facebook/Zappos does? Don’t they know all the things that I do with my money?” Yet, bankers still insist to be compared to their local banking competitors. In reality, aiming to be the best digital banking experience in Chicagoland falls short when consumers are judging their FI experiences against all other digital experiences.
- They don’t think about relationships with FIs.
Despite what banking executives say, most banking consumers don’t feel they have a relationship with their FI. This is true for banks and for credit unions. In fact, many CU members don’t make a distinction between CUs and banks. If consumers refer to a relationship at their “bank,” it is most often with a specific employee at the FI and not the organization. In one interview, we talked about the relationship with their financial institution and the interviewee chuckled and said that “if it was a relationship, it was an abusive one.”
- They don’t understand loyalty programs.
When working with card or product teams at CUs, we hear about their successful points-based loyalty programs. Yet, when we ask their members, no one can explain how points work and they are frustrated by it. We are more likely to hear about the terrible merchandise points buy and how they wish automated cash-back was an option. “Why can’t they be like Discover?” is a common phrase we hear.
When we present findings to our clients, some executives find the results surprising and act accordingly. However, some executives discount them because they aren’t the result of a “statistically valid sample.” While we believe that surveys are a great tool for organizations, relying purely on survey results to understand client behaviors is a problem. This is especially poignant when surveys are prepared by people that don’t understand appropriate methodologies for survey construction. Direct interviews with current and prospective members can bring out insights that are invaluable in defining better member experiences. Combine classic, well-developed research with real-life customer interviews to get a full and complete picture of your customer’s demands and respond accordingly.