Member Engagement: The Big, New Battleground

By Robert McGarvey

For CU2.0

Research out of Pymnts drives home two points: financial institutions, suddenly, are attempting to up their game in consumer engagement – and the better institutions are the ones that are all over this.

Said Pymnts: “Our analysis shows CE is a growing focus for FIs, particularly the top performing innovators in our study. Moreover, those banks that focus on a customer experience and consumer engagement (CXE) strategy are tuned into customer needs and adoption, and
they roll out innovations they say are more successful, too.”

The FIs that are good at this are getting better. The ones that aren’t, aren’t.

That has to be terrifying for the institutions that are laggards – and, sadly, most credit unions (and banks too) fall in the laggard group.  

But more now are trying to do this better, reported Pymnts: “Just 35 percent of [financial institutions] reported having focused on CE during the past three years, while 43 percent said they intended to focus on CE in the following three.”

Word of firm advice: solidly plant your credit union in the CE camp. That’s how to thrive.

Exactly what is meant by consumer engagement?  Pymnts explained: “Consumer engagement in the digital age refers to the combination of consumer experience, digital technology and data analytics.”  The researchers added: “These areas proved to be of particular importance to credit unions and community banks.”

Pymnts continued: “It is also critical to note that top performing FIs are far more likely to report an intent to focus on consumer engagement than their peers. In fact, 80 percent of Top Performers say they will focus on CE initiatives over the next three years, nearly twice the percentage of all FIs as a group (43 percent).”

Understand, the money center banks are focused on digital technology, data analytics, and consumer experience.  Most credit unions are playing catch up. But play they must because there is every indication that, increasingly, members will be won and lost in large part due to their member experience of the credit union.

Think about just one battleground: the mobile banking app. Innovation is continuous at a Chase, or a USAA. Is it at your credit union?  Probably not. Most credit unions are beholden to third party vendors and speed of updates has not been how they have distinguished themselves.

Consider the fast rising consumer demand for p2p inside their mobile banking app. Not many credit unions offer it.  But the big banks are putting Zelle in their mobile apps – they are already there before a majority of consumers know they want the capability but that majority is definitely heading our way. What are you doing to be ready?

Pymnts also expects higher focus by leading FIs on digital wallets as well as loyalty and rewards initiatives. A hope of these initiatives: more mindshare of consumers and more touchpoints.  What credit unions want – and need – are well used accounts and that’s the intended payoff of consumer experience campaigns.

An engaged consumer is a more active consumer.

A lot of next wave consumer engagement will be technology driven.  Many credit union executives think member engagement and immediately think of a smiling teller and a warm voice on the phone.  But Pymnts rocks that paradigm by singling out Bank of America’s machine service rep Erica as a powerful innovation in engagement.  Said Pymnts: “When it comes to the changing nature of customer service, few developments in the financial sector offer quite as illustrative a demonstration as the runaway success of Bank of America’s digital assistant, Erica.”

In its first three months, Erica grabbed one million users. For many of us, said Pymnts, digital assistants now are the “preferred” contact channel with an FI.

It wouldn’t surprise me if many of us have many more contacts with a digital assistant than with a human, in part because the digital assistant is always available and also because – psychologically – we don’t think we are demanding too much attention when we pepper Erica, or Alexa, with questions.  

Pymnts said that the digital components figures in more ways in our customer experience.  It elaborated: “There is a direct correlation between innovative payments technology, a differentiating customer experience and developing newer, more efficient payment features that can help boost CE.”

Consumers like mobile banking and they really like mobile remote deposit capture.

What additional technology do you offer that you know your members love? “I can’t think of any”  is not a good answer.

Accept this reality: technology will shape the looming customer engagement wars and the credit unions that are racing to stay ahead technologically are very probably the ones that will emerge as winners.  Today’s technology will not keep consumers engaged tomorrow. Race to stay in the chase.