By Barry B. Kirby II, Senior Vice President, CuneXus
If a seamless, digital journey is the goal for your credit union, you’re already behind. The digital experience has evolved, and members no longer need to go on a journey to get to their destination.
Think about the last time a member woke up and said, “Today is the day I will apply for a credit card!” It’s more likely they woke up to find out they have a baby on the way and realize they should have a credit card to upfit the nursery. Instead of trying to time your members’ life events, it’s time to eliminate their journey all together and proactively serve them with the financial support they need rather than prompting them to find it.
A member on a journey is anyone’s customer—meaning a member on a mission to find a new credit card, loan, etc., will most likely find it elsewhere. This could result from a variety of roadblocks including pre-approvals that ultimately fail, lengthy forms, or an inconvenient experience.
The data to create proactive and convenient experiences that members desire is readily available, but most credit unions are lacking the vision for this critical strategy. Business models should be built to offer quick, convenient and personalized experiences – including personalized offers that anticipate member needs and that demonstrate exceptional service. A credit union that uses data to intimately understand their members’ financial standing should never have to deny a member’s loan application.
Most loan application processes are obsolete and stuck in the early years of online account opening. Even if updates have been added to scanning IDs or automate the re-entry of information, the basic workflow is broken. Sending one-off offers to members in hopes that one sticks simply drives the member away out of annoyance of irrelevance. According to Temenos it’s not uncommon for 70% to 90% of applicants who clicked ‘apply now’ to abandon the process before their applications are submitted for decision. But who is surprised? In a world of technology, attention spans have dwindled, and instant, effortless experiences reign supreme—especially when it comes to money.
GAFA continues to instill a sense of convenience and personalization in consumer minds, delivering on-demand experiences that continue to reshape what members expect from their institution. Savvy lenders have already adopted alternatives that curate this white-glove service, providing a catalog-like shopping experience to match companies like Amazon and Walmart—who are known for making it easy and convenient to shop any time, and proactively offer options to pay or finance based on their data. This is endearing to consumers, who then begin taking advantage of loyalty and rewards programs and applying for online credit—which typically takes 15 seconds to be approved with no heavy paperwork to complete, just verbal confirmations and an e-signature. Convenient right?
Consider the last time you made a purchase on your iPhone. It most likely asked if you would like to use Apple Pay. This is an example of Apple embracing every opportunity to eliminate the journey of searching for an Apple card and enabling a ‘one click’ application process. And this has been happening for years. Credit unions must leapfrog this trend and act on members’ needs to provide an experience that meets and anticipates their needs when they log into online banking. This can eliminate the loan application process completely.
Credit unions have much more data at their fingertips than big techs, more expertise in lending, and have a leg up when it comes to relationships with their members. In fact, a recent survey from NCR finds that 86% of people would prefer their financial institutions have greater access to their personal data, compared to big tech companies like Amazon.com and Alphabet’s Google. It’s time to leverage these strengths to build a better member experience.
By uncovering deep insights about who members are and what they need, credit unions can empower them with personalized access to loans across multiple product lines. These guaranteed offers can eliminate the application process and provide insight into their personal buying power, allowing the member to shop with confidence. Credit unions that implement this proactive approach are able to get in front of the members before they shop, keeping qualified borrowers perpetually approved for an array of personalized loan offers. This “Perpetual Approval” strategy ensures that the credit union is top of mind anytime members enter into a purchase market. Furthermore, by eliminating the credit application process in favor of an ongoing automated credit approval, the credit union can then provide the nearly instant shop-borrow-buy experience that consumers crave.
Members have proven they’re not afraid to walk away when their expectations aren’t met. And if credit unions want to compete with big techs and larger banks, they must provide a sense of support, convenience and personalization. The industry has a chance to win over a new generation of business with such progressive strategies. Credit unions have the local, caring and altruistic positioning that people want, now it’s time to add the convenience and next-level service that can outshine financial alternatives. It’s time to end the journey.
Barry Kirby is SVP of CuneXus and has an extensive background in finance and financial services technology. His career has spanned across many areas of business, including business development/sales, introduction and maturation of Credit Union fintech products, product development and process implementation, ownership of strategic channel partnerships, client management, marketing, underwriting and risk assessment, to most recently architectural design of a leading Loan Origination System. Barry holds a Bachelor of Business Administration degree from the University of North Carolina at Charlotte, and remains very active in the Charlotte community, serving as Vice Chair of the Supervisory Committee for Charlotte Metro Credit Union as well as being actively involved in Big Brothers and Big Sisters of Charlotte.