By W.B. King
During a recent World Council of Credit Unions webinar, executives from around the globe gathered virtually discussing digitization strategies and best practices. Among those in attendance were representatives from BCU, National Bank for Agriculture and Rural Development (India), National Credit Union Federation of Korea and SGB-Bank (Poland).
“It’s a very important topic we are addressing today,” Brian Branch, president and CEO of World Council of Credit Unions, said in his opening remarks. “This is a time for digital transformation of the global credit union system.”
The Digitization Journey
BCU’s Senior Vice President of Digital Strategy and Delivery Carey Price noted that there is no end point to the digital transformation, adding that “we are all on this digitization journey together.”
With $3.8 billion in deposits and $3.8 billion in loans, the $4.5 billion Vernon Hills, Ill. –based BCU supports over 293,000 members, 708 employees and 68 branch locations.
While Price explained that BCU’s roots began with the healthcare company Baxter, in recent years the organization has expanded its reach to other household names, such as Target and Geico. BCU’s business approach, she said, shapes how the credit union views its digital offering to membership.
“Our approach is to bring on companies who have an interest in the financial well-being of their employees,” said Price. “We (BCU) want to be a benefit offering to these company partners in the form of a B-to-B-to-C model.”
Along with understanding “who” the credit union serves, Price said BCU’s digital strategy ties directly into the organization’s overarching credit union objectives, which are: engagement, excellence and experience.
“In terms of our digital channels, we want to deepen the penetration of products and services for members using our channels,” she said. This approach includes improving retention, growing remote membership, deepening brand loyalty, enhancing security, driving a self-service model and integrating with other channels.
The remote membership segment, she explained, is important to BCU as 65% of the target member market doesn’t have a nearby branch location.
“We need to have digital features that attract them, whose primary channel is strictly digital,” she said. And while she added that nearly 100% of all BCU transactions are now contactless (as of 2021), the face-to-face branch footprint remains important as does call centers.
“We want to provide as much value as we can by migrating those low value transactions—transfers or payments—to our digital experience and reserve that precious face to face time for high-value transactions,” she said.
With a continued focus on enhancing contactless transactions over the years, BCU has realized that this approach is roughly 20 times less expensive than contact channels. The goal, she said, is reducing member effort and friction with transactions.
Build, Buy or Hybrid?
Price explained that when determining a digital strategy, it’s important to decide on whether the organization will build, buy or formulate a hybrid approach.
“When I started out, we (BCU) didn’t have anybody on our digital team. We decided to build our digital banking platform in our IT area and it was very successful for us, but that was before the ubiquity of mobile banking,” she reflected. “So as our member demands increased and the complexity increased, we knew we had to go from a build solution to a buy solution.”
The credit union next purchased a platform that had desktop banking and mobile banking, which provided more consistency. Whereas BCU wanted to be a “fast-follower” with commodity transactions, such as transfers and balance inquiries, it wanted to be a “standout” when it came to “unique digital” opportunities, explained Price. But in order to “accelerate the velocity of digital,” third party partnerships were required.
“We sought out fintech partners and made sure we could be strategic in those integrations into our digital ecosystem,” she said.
A few years ago BCU’s goal was “advanced digital,” she said. Today, the objective is “extreme digital.” The latter “2.0 model” includes getting to the point of zero paper transactions, one-touch applications, 24-7-365 access to all services through digital channels, predictive analytics to drive personal financial advocacy and financial data integrated with extended mobility.
“Getting to digital wasn’t enough, we needed to evolve,” she said. “We, at BCU, decided to evolve this strategy that we wanted to be digitally defensive with product feature development and digitally offensive where experiences would provide a unique positioning with those company partners—the Target, the Geico. So we think about that as we create digital solutions.”
As an example of being digitally offensive and an innovator, Price explained that BCU recently rolled out a financial well-being assessment solution for its company partners that ultimately better serves membership and demonstrates value.
“As we think of our digital capabilities, we wanted to make sure we are keeping pace with being digitally offensive, but we knew that we needed to make a big change in our digital approach—looking at digital 2022,” she said. “So we knew we needed to segment our digital business into five different categories."
These five buckets include sales enablement, competitive digital offerings, member trust and security, omnichannel member engagement, and corporate partnerships.
“It wasn’t enough to have our teams set up to be mobile and desktop,” said Price. “But with the pervasiveness of digital and also our internal product teams like lending and having an appetite for more digital solutions, we needed to break our digital team into these five areas to give more specific focus to make sure we keep up with those mega banks and the features those banks are offering.”
As BCU continues to proactively consider its digital strategy, Price said the bottom line is always focused on providing great digital banking solutions.
“Members are what matters and what builds our credit union and we want to make sure we make their financial lives easier,” she said in closing.
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