Finopotamus aims to highlight white papers, surveys and reports that provide a glimpse as to what is taking place at and/or impacting credit unions and other organizations in the financial services industry.
By Roy Urrico
Half of the respondents in a February 2021 NCR survey about banking preferences and behavior have considered banking with an online-only bank, and if it were an option, 39% would consider banking with big tech as their primary financial institution.
Those are among the findings in a study in which Atlanta-based fintech provider NCR Corp. commissioned the Harris Poll to investigate consumer banking habits. The survey asked more than 2,100 Americans (18 and older) about their relationship with their primary financial institutions.
Specifically, the poll focused on products and services, and their frequency of use, utilized by account holders at their primary financial institution, whether a credit union, community bank, a major bank or a non-bank. The survey studied banking features, such as person-to-person transfers, mobile check deposits, and financial wellness, budgeting, and personal financial management (PFM) tools.
Other results included:
· Eight-six percent would prefer their financial institution have more access to their personal data (social security number, address, date of birth, etc.) than big techs.
· While consumers have a solid appetite for financial wellness tools for budgeting/goal setting, smart receipt capture, auto savings and live video chat, only about one third knew if their financial institution offered these capabilities; and another third were “unsure” if their financial institution features these offerings.
· Sixty percent would like their financial institution to provide personalized advice.
· When using their primary FI’s mobile banking app, digital-only banks had the highest engagement rate when it came to transferring money (92%) and making a P2P payment (74%). National banks’ highest engagement frequency came when paying a bill (90%) and making a mobile deposit (88%).
Getting to Know the Digital Member
“We were interested to get deeper into the mindset of credit union members and consumers, to understand their preferences, attitudes, and sentiments towards digital financial services and banking,” explained Doug Brown, SVP and general manager, NCR Digital Banking, which serves some 315 credit unions.
Brown pointed out a competitive cohort for traditional financial institutions emanates today from big tech, such as Google, Facebook, Amazon, Apple, and PayPal as well as non-bank providers offering bank like services.
The report also showed a disparity in the usage level of digital offerings at credit unions as compared with a major bank user, like at Chase Bank, or someone using PayPal. “Despite the availability of a feature, there's a different rate of usage. And there's also a different awareness of even knowing their institution had it.”
The study also found a lower level of product knowledge for credit union members versus their competitors’ customers. “It's obviously critical that credit unions have the capability to have parity, with either major banks or non-bank providers. Secondly, there is just a deeper need to raise awareness, education, and encouragement to foster that engagement,” Brown said.
Even in a year in which the pandemic created a greater demand for remote banking channels, members still do not fully recognize what is available to them compared to other financial institutions. Brown cited mobile check deposit as an example. “We did see massive utilization increase with credit union members on using mobile check deposit, kind of driven a bit out of necessity.” Still credit union members used mobile check deposit 10% less than community bank customers. Brown added NCR made similar discoveries with features like person-to-person and money transfer services, with bank customers showing higher levels of both engagement and awareness than credit union members.
Still credit unions and community banks have a relationship advantage when it comes to a digital-first engagement model, which refers to today's consumers who increasingly start their banking experiences in a digital channel, whether online or mobile. Banking relationships also mean offering physical experiences. “There are still times I need either branch services or human engagement,” Brown suggested.
Brown suggested credit union capitalize on member relationships by getting to know the member even better or personalization of the relationship. “How much of the data, which you have access to, are you leveraging?” He said it is incumbent on a credit union to comprehend their members’ desired financial relationship. That means understanding both what they like and could benefit from having explained to them; and then not cluttering their chosen channels with irrelevant information. “It's just bringing that full relationship to bear in every digital engagement, be it in mobile banking, online banking, in a branch, or at an ATM or an ITM.”
NCR Partners With Credit Unions and Google
NCR — whose offerings include digital banking platforms, interactive and automatic teller machines (ITMs and ATMs), point-of-sale terminals and check processing systems — has built a number of servicing, marketing and promotional capabilities into its platforms that deliver relevant content. Brown explained the fintech firm wants to help the credit union member get stronger and better by engaging, enrolling, or activate them. “We’re just very keen to help elevate the credit union's ability to exercise all of this and fulfill a digital first mission.”
Another example of the Atlanta firm pushing the innovation envelope came in April 2021, when NCR Corporation and Google Cloud announced a global strategic partnership. Under the terms of the agreement, NCR will expand cloud availability of its digital banking software portfolio, including NCR Channel Services, for retail banking, as well as its card and payments processing platform, NCR Authentic.
“This initiative expands the cloud deployment options for NCR’s customers, making it easier and faster for financial institutions to bring new digital banking services to market and accelerate digital transformations with confidence,” said Frank Hauck, president and general manager of NCR Banking in the announcement.
NCR and Google Cloud will collaborate on product development and innovation to further enhance cloud-based solutions and analytics available to banking customers on Google Cloud. Said Derek White, vice president, global financial services at Google Cloud. “Bringing NCR’s widely adopted digital banking software onto Google Cloud means financial institutions can leverage scalable, secure cloud infrastructure, with the flexibility to deploy new, cloud-native solutions across on-premises, hybrid cloud, and as-a-service models, enabling them to deliver exceptional customer experiences.”
Asked if this alliance with big tech runs contrary to consumers’ desire to maintain a relationship with their local institution, Brown responded: “This is where Google has said we would rather strengthen the credit union and community banking space through a partnership with NCR. We do offer things like the Google Plex account and Google Pay, but I think we're seeing there's more opportunity in partnership than direct competition.”
Brown also acknowledged how open banking relationships are changing the banking environment. “At one level on the surface, you can say it is like sleeping with the enemy, because there is a partnership, coopetition, frenemies that exist in the evolving ecosystem.” Brown emphasized when done right, partnerships can provide more leverage capability.