AUSTIN, Texas—Credit unions that don’t fully embrace the opportunities presented by digital technology could be leaving behind irreplaceable growth opportunities.
Digital offerings are no longer just a commodity but a necessity, explained Jonathan Clay Jr., digital marketing associate at Louisiana Federal Credit Union. Consumers make decisions about which financial products and services to utilize based on what they see on a financial services provider’s app and website, he said. If CUs can’t play in that space they’re likely to lose out on business.
Clay spoke as part of a panel during the Credit Union Summit at the 2019 Retail Banking conference taking place this week in Austin. With a conference theme of “growth stories,” the six speakers at the event offered a variety of perspectives on how CUs can deepen relationships with members and boost the bottom line.
The three-hour summit also included remarks from executives at A+ Federal Credit Union, Vibrant Credit Union and EFG Companies.
Embracing digital wasn’t an easy process, recalled Clay. His credit union was “married to paper processes” and struggled to get the board to buy in on digital initiatives. On top of that, the CU’s website was a “glorified online brochure” and got poor feedback from members in Net Promoter Score testing. Further, the board and staff had indicated that many outdated processes already worked and were hesitant to change things.
Louisiana FCU isn’t alone in that, according to moderator James Robert Lay, CEO of the Digital Growth Institute. Most CUs are really only dabbling in digital without a well thought-out plan, he said. Instead, these institutions are using a piecemeal strategy involving bits of email marketing, social media and digital advertisement. DGI’s research shows 85 percent of banks and credit unions don’t have a strategy for digital growth.
Through a series of small steps, Louisiana FCU has worked to change that perception and help bolster the business case for embracing digital. That included changing how the credit union goes to market with products. Just by eliminating its printed member newsletter, Louisiana FCU saved $80,000 per year, said Clay.
On top of that, it tweaked an auto-refinance program that used print applications and took it online, creating a three-step process for applications. Now instead of starting from scratch each year, all that has to be done is update the terms and dates of the program.
In recent years, the CU has started tying in social media outreach, including utilizing an in-house social media task force to develop soft leads. All together, the most recent campaign generated $2 million in loans – with nearly 40 percent of those leads coming from social media.
Digital alone is not enough
Lay cautioned, however, that “a digital experience alone is not enough – it’s a digital experience plus a human experience that leads to growth.”
That’s been a tactic embraced by Texas Tech Credit Union. While based in West Texas and serving primarily a rural area, the institution has used digital technology as a strategic differentiator, explained Chief Operating Officer Eric Lundberg.
One element of that has been to embrace video banking services in order to combat the perception that institutions and consumers in rural areas can’t or won’t utilize leading-edge technology. The CU uses POPi/o’s video banking platform – rebranded as CUNow – as part of its mortgage loan origination strategy.
Lundberg said Texas Tech has also put together content guides to help members through the auto- and home-buying process – part of a “help first, sell second” strategy.
Those guides, which members download from the credit union, have been widely utilized. Between the two, management believes they see approximately $120,000 in additional net yield on those products.
“That’s $120,000 from a piece of content that took us about a week to create,” said Lundberg. And, he added, they also allow the CU opportunities to work with Realtors and other third parties in order to sponsor “advertorials” and other content that fuels growth.
Lay and the two panelists all emphasized that digital initiatives are most effective when paired with high-quality member service. Texas Tech, reminded Lundberg, has been one of
“It all comes down to hiring the right people,” he said. “Whenever a manager thinks they like someone, we bring in other managers from other departments and they go through a second interview to make sure that person fits the culture.”
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