Three Ways Digital Banking Can Kill Credit Union Member Satisfaction

Sisa Wang

July 8, 2022

Earlier this year, Finalytics.ai conducted a survey designed to gauge the digital maturity of credit unions. Taking samples from all asset and member sizes of credit unions, it measured the strategic value placed on digital against the CU’s state of readiness in supporting digital across four main areas of their organization. Using the Forrester model, the results indicated institutions’ digital maturity on a scale of one to five.

This infographic summarizes the main findings in the report and provides some commentary on the numbers depicted. There is also a report that analyzes the full set of findings from the survey and offers several observations for consideration by your credit union’s leadership.

Here we will discuss the most paradoxical observations from the report: The focus on all things digital at credit unions is eroding the focus on member satisfaction—three reasons from the data gathered in the Digital Maturity Index (DMI) Report support this statement.

  1. Transactional vs. Relational: The strategic importance of digital channels has begun to settle across the credit union as an existential imperative. The DMI survey results demonstrate this, with more than 80% of the credit unions identifying digital as the strategic core to their ability to differentiate themselves competitively. Yet, 45% indicated they had the readiness to execute their plans to use digital as a competitive differentiator. Only 14% gave a high rating to their credit union’s focus on members’ digital experience. These seemly antithetical findings may be because many executives still see digital through a transactional rather than a relational lens. Which should win out? These ingredients are required to deliver a digital experience that fosters loyalty rather than erodes it.
  2. Generalization vs. Personalization: Credit unions surveyed during the Finalytics.ai DMI study rated their use of personas, and member journey maps a 2.8 on a 1-5 scale. The use of member insights and research to shape their digital strategy was rated only slightly better at 3.1. Given the industry-wide feeling that digital is the lifeblood of competitive success, these ratings underline the trouble many credit unions have in understanding the relational dimension of digital. The result is a generalized rather than personalized encounter. Sadly, personalization – a counterbalance to this generalization – has been compromised as a legitimate strategy. The fact is that much of what passes as personalization currently is poorly targeted banner ads and campaigns based on attributes drawn from static and generalized demographic information – rather than on the needs of the individual assessed each time they visit their credit union’s website.
  3. New Tech vs. Legacy Tech: Of the credit unions surveyed for the DMI study, only 13% rated their incorporation of modern technology (API, cloud, AI, et al.) high. Yet, according to most studies and surveys, modernization of the core or digital banking offerings remains a top priority for most financial institutions. Since both systems are critical and built to be transactional, an overhaul of either is as disruptive as an organ transplant.

With fewer branches and fewer members in the branches, transactions have become detached from the innate relational dimension – the human touch – that credit unions are often known for. As the context for reinforcing this relational quality ebbs, the virtual – not relational without the help of new technology – is first and foremost transactional. What’s more, many project priorities are with legacy transactional systems.

As a result, personas, journey maps, and insights into what satisfies members are applied less. Commoditization becomes the default, and few credit unions will be able to win in a commoditized banking market. Avoiding this scenario means understanding that the new tech is the key to a relational digital experience involving transactions.

  • Transactional vs. Relational
  • Generalization vs. Personalization
  • New Tech vs. Legacy Tech

Humans are built to crave personal interactions. They expect their credit union’s tellers and advisors to remember who they are, what they need when they visit a branch, and even more the next time they visit. Given the long histories and accumulated customer data available to their credit unions, why couldn’t their digital experiences be on par with (or even better than) in-person interactions?

Check out the DMI infographic here.

 

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