The Next Credit Union Frontier: Personalizing to Succeed

By Robert McGarvey

Sometimes the simplest ideas are the truest.

When I ask credit union executives how they plan to innovate to remain competitive with banks – and at least the big banks are whirlwinds of tech experimentation and innovation – I hear back about chatbots, instant messaging, hoped for improvements in antivirus, and a lot more. All good. But – in my view – none is likely to move the competitive needle for any credit union.

But a new survey from TimeTrade, a developer of appointment scheduling software, just may have fingered the exact differentiator credit unions need to stay viable in a world of every bigger and slicker banks.

The 2016 survey asked 1064 credit union members about their experiences and the answer came back that they very much want one thing: “Results reveal that credit union members desire more personalization and more in-person interaction at the branch than bank customers do. This is supported by the survey data, which shows that not only is personalization an in-branch priority for credit union members, but they visit their branch more often than the typical bank customer.”

What is dazzling about this insight is its simplicity: Credit unions excel at what in their hearts most credit union executives have long believed is their strong suit, that is, people skills and personalization of the member experience.

You have never heard a credit union CEO say his/her institution is winning over more members because it spent millions on a new core system – at least I hope you haven’t heard that.  I happen to know what core my credit union runs on and, honestly, I don’t care and I am a tech guy.  I would care if it didn’t work but it works fine and that’s the end of the story.

I don’t know many members of any credit union who have a clue about cores and why should they?

Besides, banks can win the tech spending race every day, all the time.  J. P. Morgan Chase is spending $500 million on cybersecurity and probably that is much more than all of the US’s credit unions added together will spend.

Other banking behemoths do likewise.

Pick fights you can win.

Person to person is a winnable fight.

The TimeTrade survey gave credit unions the lead in personalization: “85 percent of members feel they have a personalized experience with their credit union, versus only 79 percent of customers who feel the same about their bank,” said TimeTrade.

Millennials too are on this bus: “Among millennial members (respondents ages 20 to 35), 43 percent said they value the personalized experience they receive from their credit union,” said TimeTrade. That is, it’s not just older Baby Boomers.  

Interesting, too, per TimeTrade, is that “77 percent of millennials are willing to schedule an appointment to visit their credit union branch for specialized service, compared to 68 percent of all members.”

So there is no proof – per these data – that millennials have written off branches and personal interactions at them. Quite the contrary.

A staggering factoid in 2016 is this: “43 percent of members visit their credit union more than 10 times a year,” reported TimeTrade.

Many of us – this reporter included – have predicted the death of the branch as slick technology (mobile banking, mobile remote deposit capture, etc.) has made it unnecessary to set foot in a branch.

Just maybe we have missed the point. Just maybe a substantial subset of credit union members go to the branch because they want to.

What that means for credit unions is simple. Train employees to excel at member service and always hire frontline people to whom that matters.

While you are at this, think hard about buying up abandoned bank branches – which in many markets are available at distressed pricing.  That advice represents a reversal of much prevailing thinking (mine included) but if the credit union secret sauce is personalization and if branches are cheap in many locations, it becomes a simple and cheap equation that may lead to greater marketplace visibility and perhaps victory.

Always ask: will this next step help us personalize service to more members?

When the answer is yes, it just may be a good idea.

Even better is that winning the battle for personalized service is within a credit union’s skill set.  It’s a fight where intimate scale becomes a plus.  Where local management and leadership can help an institution triumph over a behemoth with Wall Street leadership.

Sometimes the path to victory is shorter than we might think.