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  • Writer's pictureRoy Urrico

Panel: Credit Unions and Changing Banking Preferences (Part 2)

By Roy Urrico

What is the financial technology narrative that will last beyond the pandemic? What tools and techniques ensure members have a positive credit union experience? How do fintechs enable credit unions to keep up with advancing technology and allow credit unions to compete for accounts?

In this second installment of a three-part virtual panel discussion focusing on credit unions and changing banking preferences, a trio of banking industry financial technology professionals offer their insightful perspective.


Chris Doner, founder and CEO of Berkeley, Calif.-based Access Softek, a pioneering company in mobile and digital finserv solutions.

Mickey Goldwasser, vice president of marketing and chief of staff at Glastonbury, Conn.-based Payrailz, which delivers smart and engaging payment experiences for the financial services industry.

Karl Dahlgren, managing director of Chicago-based BAI, which provides in-depth financial service research.

What are some of the tools and techniques that credit unions should deploy to ensure members have a positive credit union experience?

The best way to ensure a positive experience for members is to personalize their services, Goldwasser proposed. “Though most members today are interacting with mobile apps or browser windows, the experience should not feel cold and impersonal. The experience needs to be engaging and proactive.” Goldwasser added, “Credit unions have a tremendous amount of data at their disposal that can help fuel technologies such as artificial intelligence (AI) and machine learning (ML) to create deeper digital relationships with members. With the right member data, these tools can give each member their own personalized recommendations.”

In the area of digital payments, this can mean prompting members to pay their bills on time or transfer any leftover money into a savings account, Goldwasser explained. “Similarly, AI can tell a member when they are overpaying for a bill and help them lower it. The technology can further help members to manage their financial health and solidify the credit union as the go-to place for services.” These customizable interactions allow each member to tailor their own payment data experience according to their banking habits. “Proactive recommendations show the member that their credit union is looking out for them specifically.”

Said Doner, “Credit unions must seek products that meet the customer’s increasingly tech-focused, real-time demands and serve as a strategic differentiator for the organization.” Doner explained members are expecting faster access to their money with payments, check deposit or P2P (peer-to-peer). “This creates a challenge for the credit union with respect to fraud.” For instance, credit unions can leverage real-time fraud control products, which use machine learning and a deep neural network to recognize “in-pattern” and “out-of-pattern” behavior in each user’s digital banking activity. If the system suspects fraud, the solution can trigger an extra verification step for the user. “While the real account holders can pass this verification with ease, fraudsters will be forced to abandon the transaction or fail the verification.”

Additionally, Doner pointed out tools such as AI can recognize customer queries submitted via live chat and immediately provide auto-populated responses that call-center staffers can push to the customer. “AI fosters faster and more accurate service, which ultimately turns into customer loyalty down the road. This solution strikes the perfect balance between technology and personal interaction to create strong, trusting relationships.”

Doner noted, “Lastly, biometrics is a tool that credit unions can use to their advantage. Specifically with biometric authentication, credit unions can now authenticate members via their mobile phone across any channel, including branch, IVR (interactive voice response), contact center, or digital banking technology simultaneously.”

Credit unions, like small community banks, enjoy the inherent advantage of customer intimacy, Dahlgren observed. “Much more so than the regional and large banks, credit unions get to know their customers on a first-name basis in the branch. Today’s mantra is digital first, but personal relationships are still a vital part of the customer experience, and credit unions must maximize that advantage.”

Dahlgren, echoing what Goldwasser said, added credit union leaders have another powerful tool at their disposal – customer data, which can produce powerful insights. “But credit unions looking to foster positive experiences must ensure the protection of customer data.”

As more banking has moved online, customers’ fear of fraud has increased. Consumers’ biggest concern is the security of the online banking channel. Dahlgren referred to a 2021 BAI consumer survey in which 39% said fraud and security was their top source of anxiety. Concerns about digital security span the generations, although it is more pronounced among Gen X (46%) and Boomers (52%) than younger consumers. Fear of becoming a victim of fraud was expressed by 34% of Gen Z and 28% of millennials.”

Dahlgren said, “Credit unions must not only be careful with customer data but savvy with it. Nothing bothers members like irrelevant product and service offers. Boomers have little interest in college savings programs, and Gen Z members are unmoved by annuities. Thoughtful, targeted product and service offers help build trust among members.”

For many members, financial services are a mysterious black box, Dahlgren conveyed. “Gen Z is often mystified by practices that are second nature to older members. Some boomers are baffled by digital channels that are all new to them.” He suggested financial institutions provide more guidance by leveraging one of traditional banking’s customer service strengths—face-to-face interactions in the branch.

“Financial services leaders that put their members at the center of everything they do with reliable, responsive service; scrupulous protection of their personal data; and smart digital tools will reap the rewards of a long-term relationship,” said Dahlgren.

When looking at all the competition in the payments space today, how can credit unions stand out?

“Credit unions are competing with more than just other banks and credit unions when it comes to payments,” Goldwasser said. He pointed out consumer apps like Cash App and Venmo are also competing for member’ payment activity and, as a result, their deposits. “Most payment app users leave funds sitting in their accounts and not in their primary checking accounts at the credit union.”

Most credit unions do not offer the same level of P2P and intelligent bill pay services that come from the consumer apps we see today, and that needs to change, Goldwasser pointed out. “If credit unions want to compete in the payments space, they need smart payment solutions that provide the same value that members are getting from outside apps. This will not only bring deposits back from outside apps but will also contribute to building stronger relationships between the credit union and the member by meeting all their financial needs in one place.”

Next up in the final installment of this three-part series: How do tech companies not overwhelm FIs with new products and services? How can credit unions compete for accounts?

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