The roadmap to growth: On-site at the Calif., Nevada Leagues' annual
November 14, 2017 3:21 PM
Marianne Guntow/South12th - Fotolia
The keys to success
On the third and final day of the California and Nevada Credit Union Leagues’ Annual Meeting and Convention disruptive technology and new ways to think of branding were the hot topics. CUs were told they need to disrupt like Uber and hug like a credit union, urged to work with fintech companies that offer consumer-friendly apps, and they should think of all interactions with members and non-members as pivot points.
Get frictionless
Credit unions can use the example of Uber as a company that uses its platform as a business model. According to Anne Legg, this is powerful because Uber uses technology to connect people.
Legg, founder of THRIVE Strategic Services and a director for CUNA Mutual Group’s AdvantEdge Analytics, said in the Uber model the producer has a car, while the consumer needs a ride. In the case of credit unions, she said members have a number of needs they may need help paying for, including shelter, transportation, education, retirement, and play/travel.
“You have the member and the credit union, and in the middle is a value exchange,” she said. “What is value? That is complicated.”
Legg cited a Harvard Business Review study that identified 30 elements of value. She said credit unions and other financial institutions create value every time they reduce anxiety, save time, make money or reduce risk.
Among the assets credit unions have, Legg listed price, process, member insights from big data, and having a conduit to members that allows the CU to identify members’ needs. She said the No. 1 goal for credit unions should be to remove friction from the business model.
Fitness companies are using apps at the “ultimate engagement tool,” Legg said during an educational session. The user selects a specific goal, such as finishing a 10K race. The app manufacturer gains data on the user. In one particular example, after six months of use, the company sends a pair of free socks, along with a note saying after so much exercise the person must need new socks by now.
“The socks are the lowest point of entry into the company’s product line,” Legg explained. “The company also sends a $25 coupon good on a purchase of $49 or more. In this case, the fitness company provided a valuable item to the user before the user even knew he or she needed it. What problems do our members have that we can solve before they know it?”
Legg said when it comes to transportation, CUs need to keep in mind the important part is the automobile itself, not the auto loan. “Members have a daily relationship with their auto as their primary mode of transportation.”
Similarly, when it comes to shelter, “It is the home, not the mortgage.” Legg suggested connecting members to a Realtor and an appraiser via an app. When it comes to travel and play, she said, “It’s the experience, not the credit card.”
There are seven considerations for CUs moving from product to platform:
1. Establish value
2. Offer channels that help the member choose the credit union
3. Frictionless and easy enrollment
4. Create communities
5. Shared learning
6. Scalable
7. Multihoming
“Start small with one product, perhaps an auto loan or a credit card,” she advised. “Build on your successes while learning from your mistakes. Build a team for the next phase. To disrupt, shift the focus of the credit union from delivering products to creating value. This can produce member engagement and organizational growth.”
Legg, founder of THRIVE Strategic Services and a director for CUNA Mutual Group’s AdvantEdge Analytics, said in the Uber model the producer has a car, while the consumer needs a ride. In the case of credit unions, she said members have a number of needs they may need help paying for, including shelter, transportation, education, retirement, and play/travel.
“You have the member and the credit union, and in the middle is a value exchange,” she said. “What is value? That is complicated.”
Legg cited a Harvard Business Review study that identified 30 elements of value. She said credit unions and other financial institutions create value every time they reduce anxiety, save time, make money or reduce risk.
Among the assets credit unions have, Legg listed price, process, member insights from big data, and having a conduit to members that allows the CU to identify members’ needs. She said the No. 1 goal for credit unions should be to remove friction from the business model.
Fitness companies are using apps at the “ultimate engagement tool,” Legg said during an educational session. The user selects a specific goal, such as finishing a 10K race. The app manufacturer gains data on the user. In one particular example, after six months of use, the company sends a pair of free socks, along with a note saying after so much exercise the person must need new socks by now.
“The socks are the lowest point of entry into the company’s product line,” Legg explained. “The company also sends a $25 coupon good on a purchase of $49 or more. In this case, the fitness company provided a valuable item to the user before the user even knew he or she needed it. What problems do our members have that we can solve before they know it?”
Legg said when it comes to transportation, CUs need to keep in mind the important part is the automobile itself, not the auto loan. “Members have a daily relationship with their auto as their primary mode of transportation.”
Similarly, when it comes to shelter, “It is the home, not the mortgage.” Legg suggested connecting members to a Realtor and an appraiser via an app. When it comes to travel and play, she said, “It’s the experience, not the credit card.”
There are seven considerations for CUs moving from product to platform:
1. Establish value
2. Offer channels that help the member choose the credit union
3. Frictionless and easy enrollment
4. Create communities
5. Shared learning
6. Scalable
7. Multihoming
“Start small with one product, perhaps an auto loan or a credit card,” she advised. “Build on your successes while learning from your mistakes. Build a team for the next phase. To disrupt, shift the focus of the credit union from delivering products to creating value. This can produce member engagement and organizational growth.”
Thinking like a fintech
Fintech companies gained traction by offering consumers choice and access, according to Bill Sarris, CEO of Linqto. Sarris said CUs usually make people come to a branch to sign up for an account, and then they can get access to the app – which he said shuts them out from the “discovery” process most young people use.
“Consumers today want to do everything with their phones,” he said. “Mobile banking apps do not allow discovery. Millennials find things on their phones, and word of mouth – or what we call word of screen, when someone sees a friend using an app – is how cool apps spread. Discovery brings new members.”
Several of the big banks have multiple apps available in the App Store, Sarris pointed out, insisting, “Advertising does not work.”
What credit unions have is members, which Sarris said is why fintechs are coming to CU hoping to establish partnerships.
“Consumers today want to do everything with their phones,” he said. “Mobile banking apps do not allow discovery. Millennials find things on their phones, and word of mouth – or what we call word of screen, when someone sees a friend using an app – is how cool apps spread. Discovery brings new members.”
Several of the big banks have multiple apps available in the App Store, Sarris pointed out, insisting, “Advertising does not work.”
What credit unions have is members, which Sarris said is why fintechs are coming to CU hoping to establish partnerships.
Fintech panel
Representatives from four fintech companies discussed collaboration efforts with credit unions. First, JB Orrecia, president and CEO of SavvyMoney, said 95 credit unions have signed up with his company for its app.
“Not only does it show people their credit score, it shows the credit union’s loan offers based on individual’s score and the credit union’s criteria,” Orrecia said of the SavvyMoney app. “It drives users to the credit union’s lending origination system. Users can see what loans they qualify for before they apply.”
CUs want to help people improve their credit, and Orrecia said SavvyMoney tracks the user’s -credit score and sends a congratulatory e-mail when he/she moves to a higher score band.
Greg Landers VP of sales, Payveris, and Purna Pareek, CEO of Finovera, discussed a joint effort the two companies have put together. According to Landers, “bill management” has taken the place of mere bill pay.
“We wanted to solve the problem of managing and paying bills,” Landers said, noting 60 percent of bills are paid on billers’ sites. “That cuts out opportunities for cross-sell.”
The solution, according to Payveris: give members an Amazon-, Uber- and PayPal-like experience. “Our app brings together all bills in one place and gives users the ability to forecast when payments are due. It delivers e-bills and people can use their credit card to pay bills.”
Finovera’s Pareek said the member signs on to the CU’s mobile banking platform to access the app. “It tells people what they have to pay attention to this week. The user can set up alerts and notifications.”
SnapCheck is a company that offers digital checking solutions. After 300 years of loyal service, it says the time has come to retire paper checks for something better. Many companies still use paper checks for B2B payments – more than Visa, MasterCard, PayPal, ACU combined. Despite many consumers switching to digital payments, 92 percent of businesses use paper checks predominantly, leading to $54 billion in costs. On top of that, 59 percent of companies experienced check fraud in 2016. SnapCheck says its app reduces fraud and eliminates printing charges.
Linqto’s Sarris presented its signature app, MoneyCarta, which he said was meant to replace a personal financial manager.
“It is an advisor on your phone,” he said. The engine behind MoneyCarta “goes beyond budget” to include retirement planning, insurance, debt and savings, while generating a score that indicates how the user is doing overall. “MoneyCarta brands the credit union’s name on the dashboard,” Sarris added.
“Not only does it show people their credit score, it shows the credit union’s loan offers based on individual’s score and the credit union’s criteria,” Orrecia said of the SavvyMoney app. “It drives users to the credit union’s lending origination system. Users can see what loans they qualify for before they apply.”
CUs want to help people improve their credit, and Orrecia said SavvyMoney tracks the user’s -credit score and sends a congratulatory e-mail when he/she moves to a higher score band.
Greg Landers VP of sales, Payveris, and Purna Pareek, CEO of Finovera, discussed a joint effort the two companies have put together. According to Landers, “bill management” has taken the place of mere bill pay.
“We wanted to solve the problem of managing and paying bills,” Landers said, noting 60 percent of bills are paid on billers’ sites. “That cuts out opportunities for cross-sell.”
The solution, according to Payveris: give members an Amazon-, Uber- and PayPal-like experience. “Our app brings together all bills in one place and gives users the ability to forecast when payments are due. It delivers e-bills and people can use their credit card to pay bills.”
Finovera’s Pareek said the member signs on to the CU’s mobile banking platform to access the app. “It tells people what they have to pay attention to this week. The user can set up alerts and notifications.”
SnapCheck is a company that offers digital checking solutions. After 300 years of loyal service, it says the time has come to retire paper checks for something better. Many companies still use paper checks for B2B payments – more than Visa, MasterCard, PayPal, ACU combined. Despite many consumers switching to digital payments, 92 percent of businesses use paper checks predominantly, leading to $54 billion in costs. On top of that, 59 percent of companies experienced check fraud in 2016. SnapCheck says its app reduces fraud and eliminates printing charges.
Linqto’s Sarris presented its signature app, MoneyCarta, which he said was meant to replace a personal financial manager.
“It is an advisor on your phone,” he said. The engine behind MoneyCarta “goes beyond budget” to include retirement planning, insurance, debt and savings, while generating a score that indicates how the user is doing overall. “MoneyCarta brands the credit union’s name on the dashboard,” Sarris added.
Why doing 'fine' isn't good enough
What does a company’s logo represent? According to Scott Stratten, president of Un-Marketing, it is simply a trigger for memories – good or bad.
“Unbranding means whatever you see is right,” he told the audience. “Everyone has their own impressions of brands, along with biases. If we see the logo of a company we have interacted with, we think of the most recent interaction we have had with that company.”
Stratten told a story about the Ritz-Carlton Amelia Island in Florida. The youngest child of a family visiting the resort accidentally left “Joshie,” his prized stuffed giraffe, at the hotel. The panicked father told his son Joshie was “on an extended vacation,” then frantically called the front desk and begged them to find the toy so his life would not be ruined. The dad happened to mention the “extended vacation” line, so when an employee found Joshie, she took pictures of the giraffe in various poses around the resort, and included the pictures in the package prior to overnighting Joshie back to his family.
“What do you think the dad did when he received this package? Right, he told everybody,” Stratten said, noting he read the story on the dad’s blog. “This was done by one hotel laundry worker and a front desk clerk, and thousands of people heard about it.”
The lesson Stratten wanted credit unions to learn: “The people who work with your members change the perception of your credit union with every interaction. The day is made up of hundreds if not thousands of interactions – in person, e-mails, Twitter, Facebook. Empower your people because they are the brand. People do not work their best if they think they do not matter. Marketing does the branding, the logo and the website, but the day-to-day interactions really are the brand.”
According to Stratten, too many CUs treat the pursuit of new members different from how they treat current ones, often giving rewards to new members that are not offered to members that have been around for years. “If you think word of mouth is the best marketing, shouldn’t that be different? Focus the love on current members.”
CUs need to know they have three types of members: ecstatic, static and vulnerable, he continued. While management believes most of their members are ecstatic, most are static, he warned.
If a member says he or she is “fine” with the credit union, Stratten said that is a time to worry.
“Fine is bad. We don’t want fine. It is just a word to get out of the conversation. It is the “F” word in business. Fine is where business goes to die and competitors take over.”
If a credit union employee hears someone say “fine,” sit that person down and go over stop, start, continue: as in, What do we need to stop doing, start doing, continue doing, to keep you for the rest of your life?
“Interactions are pivot points,” Stratten said. “The worst type of member complaint is the one the credit union cannot hear. Because then the credit union cannot fix it. Members do not expect perfection, but they do expect ownership of mistakes. When we complain we want validation. We want an apology that does not deflect, but takes ownership.”
“Unbranding means whatever you see is right,” he told the audience. “Everyone has their own impressions of brands, along with biases. If we see the logo of a company we have interacted with, we think of the most recent interaction we have had with that company.”
Stratten told a story about the Ritz-Carlton Amelia Island in Florida. The youngest child of a family visiting the resort accidentally left “Joshie,” his prized stuffed giraffe, at the hotel. The panicked father told his son Joshie was “on an extended vacation,” then frantically called the front desk and begged them to find the toy so his life would not be ruined. The dad happened to mention the “extended vacation” line, so when an employee found Joshie, she took pictures of the giraffe in various poses around the resort, and included the pictures in the package prior to overnighting Joshie back to his family.
“What do you think the dad did when he received this package? Right, he told everybody,” Stratten said, noting he read the story on the dad’s blog. “This was done by one hotel laundry worker and a front desk clerk, and thousands of people heard about it.”
The lesson Stratten wanted credit unions to learn: “The people who work with your members change the perception of your credit union with every interaction. The day is made up of hundreds if not thousands of interactions – in person, e-mails, Twitter, Facebook. Empower your people because they are the brand. People do not work their best if they think they do not matter. Marketing does the branding, the logo and the website, but the day-to-day interactions really are the brand.”
According to Stratten, too many CUs treat the pursuit of new members different from how they treat current ones, often giving rewards to new members that are not offered to members that have been around for years. “If you think word of mouth is the best marketing, shouldn’t that be different? Focus the love on current members.”
CUs need to know they have three types of members: ecstatic, static and vulnerable, he continued. While management believes most of their members are ecstatic, most are static, he warned.
If a member says he or she is “fine” with the credit union, Stratten said that is a time to worry.
“Fine is bad. We don’t want fine. It is just a word to get out of the conversation. It is the “F” word in business. Fine is where business goes to die and competitors take over.”
If a credit union employee hears someone say “fine,” sit that person down and go over stop, start, continue: as in, What do we need to stop doing, start doing, continue doing, to keep you for the rest of your life?
“Interactions are pivot points,” Stratten said. “The worst type of member complaint is the one the credit union cannot hear. Because then the credit union cannot fix it. Members do not expect perfection, but they do expect ownership of mistakes. When we complain we want validation. We want an apology that does not deflect, but takes ownership.”
