The old adage "grow or die" was coined from the title of a book by George Land published in 1973. The saying continues to ring true for credit unions in 2016 as the industry continues to transform in the same vein as the book's subtitle: "The Unifying Principle of Transformation."
Credit Union Journal is constantly looking for new strategies that will help CUs not just survive the current operational climate, but thrive.
Here are three growth strategies to help CUs do just that. The first offers insights into building or improving a mobile banking application, the second focuses on how to rejuvenate inactive accounts, and the third focuses on one CU's success story from implementing a "culture of responsibility."
No. 1: Build a Great Mobile Application
The secret to building the best mobile banking app? Make it as much like Uber as possible. That was the message from a trio of industry experts, who said the ride-sharing service – and its mobile app – do just about everything right.
Jim Marous, co-publisher of The Financial Brand in Cleveland, said Uber is a hit with consumers in large part because the mobile app is intuitive and easy to use. "It removes historical pain points," Marous said. "It keeps all essential tasks in one app, which provides value."
Financial institutions should examine their apps regularly to make sure they are really easy to use, according to Marous.
"Consumers need and want apps that are really easy to use. The app needs to be simple, engaging and contextual," he advised. "With Uber, people just need to do one tap to get a ride. The app gives clear pricing. It is very convenient to use."
What FIs should also do, according to Marous, is have testers use the app to make sure the functions make sense right off the bat.
Another positive Uber feature is engagement. Marous pointed out the company gets consumers engaged by asking for immediate feedback. "How many financial institutions can say they offer the same experience with their mobile app compared to a branch?" he asked. "The key is to add value where pain used to exist. Financial institutions need to follow this example."
Some of the most successful FIs worldwide are providing value, removing pain points and adding convenience, said Meaghan Johnson, senior consultant with Mapa Research in London. Johnson said the best practices she sees when examining mobile apps centralize essential functions by having multiple icons on one page.
"The use of widgets is making banking simple," Johnson said. "We see a lot of examples of using the cloud to create a hub."
USAA, for example, has removed a "pain point" when users have to log in through the use of biometrics. "People can use facial recognition by using the camera on their smart phones," she noted.
Other popular functions involve finding the closest branch and/or ATM via a banking app, Johnson continued. "Another good idea is to provide value through the app. We see this when the account holder is alerted to a possible overdraft before a scheduled payment goes through."
No. 2: Get Inactive Accounts Working Again
Every year 15 million Americans consider shifting $627 billion in assets from one financial institution to another – thanks to marriages, moves, or simply looking for better rates or services – but fewer than half of all new checking accounts are actually activated within 90 days.
This disconnect, according to two experts, is due to a failure to engage early. Jeff Visser, chief sales officer for $647 million Consumers Credit Union, Kalamazoo, Mich., and Cale Johnston, president and CEO of Minneapolis-based ClickSwitch, said "active" account holders are four times more likely to identify their credit union or bank as their primary financial institution than are "inactive" account holders.
"Active engagement equals brand loyalty," said Visser. "New technology that is available makes for great marketing tools. At Consumers Credit Union we tell people, 'We will do all the work' when it comes to switching."
Johnston said proper onboarding turns into $212 per member/customer annually.
"The checking account is a gateway to more profitable services, such as mortgages or credit cards," he advised. "Six in 10 consumers think the switching process is 'Too much of a hassle.' An account holder with a single regular bill payment is 76% less likely to switch financial institutions. If they have five bills, they are 95% less likely to switch."
Consumers CU had to make changes to its switching process a few years ago, according to Visser, adding that technology was not the only barrier, "it was our people."
"New technology cannot be successful on its own," he noted. To select new switching technology, CUs should start with a needs assessment. Then, research options, define a budget, select a product, and create a plan/strategy.
"But utilization requires a culture change," said Visser. "Our membership base runs the spectrum of tech savvy, but there are many people who need a well-trained person to help them."
He also advised CUs to create a technology advisory board, or "switch team" that has "champions" to lead. The switch team needs to be tied in with the marketing department, he added.
Johnston said targeting millennials can be profitable, as one in three report they are "open" to the idea of switching financial institutions in the next 90 days.
No. 3: Changing Culture for the Better
address multigenerational issues that were holding back performance, $1.5 billion Vantage West Credit Union, Tucson, Ariz., introduced a "culture of responsibility" that has led to improvement in many areas.
Jamie Hernandez, VP regional manager for Vantage West, said she has seen many changes in her 41 years working in the financial industry – especially in the last 10 years.
"With multigenerational issues, it is important to be proactive to create a workforce of today that drives profitability," Hernandez said.
But what is "culture"? Hernandez noted different countries have different customs, and in a workplace, from department to department things are done differently. In the extreme, "silos" develop where one department does not communicate with another, creating inefficiencies or worse.
The answer: management must know the CU's heartbeat and passion, she said.
"Define the company core. Know how people think, act and behave. What do the employees believe in? Feedback needs to be two ways – everyone needs to give and receive feedback, and then act on it. Think beyond today. Solve problems, then share the solution."
Another important tip: do away with "That's all I do" thinking. Instead, she advised, get all staffers to think of themselves as "provider of access" to the products and services to meet members' financial needs. "Promote teamwork, collaboration and alignment throughout the organization," she advised. "Have employees feel empowered by taking ownership of key results."
According to Hernandez, there is a "power" to having a common language top to bottom in the CU.
"This starts with training," she said. "Everyone needs to know why culture is important. Then, they can sustain the momentum."
Once culture is established, Hernandez said the next step is to translate culture to profitability. When employees are empowered, they see their role and understand company-wide goals and targets.
"A job title is not a person's job," she said. "The introduction of a culture of responsibility at Vantage West has resulted in better numbers in many areas, and better numbers than other Arizona credit unions."
Some people might not buy in to a culture change, but "that's just turnover," according to Hernandez.
