In today's market, attractive rates and fees, innovative product platforms, rewards and incentives are all at the top of the list as consumers select their financial services providers. Large banks previously held a strong advantage due to name recognition, deep pockets and national advertising campaigns. However, well-publicized articles on high fees, hidden charges and other unfair practices created distrust of these large institutions which opens the door for credit unions to win over consumers with their member-friendly products and services.
Even though the door is open, converting consumers to members will require collaboration. Members want the convenience of 24/7 access to all their primary accounts, such as checking, savings, credit and prepaid cards and loans via phone, website apps and smartphone apps. By collaborating with others, credit unions can offer robust mobile and online banking products, which are in high demand for consumers of all ages, particularly those under 30. For young adults, online and mobile functionality is literally a game changer. They are willing to move to a new financial institution to obtain desired features.
Therefore, it's important for credit unions to find a partner that can deliver online, mobile and voice banking as well as online bill pay in one consolidated, full-service suite. Online bill payment should offer single sign-on and integration with other electronic banking applications. Credit unions need a platform that marries user-friendly features with a seamless integration among existing systems to minimize operational costs and requirements.
The investment required to develop and continuously update online and mobile banking platforms illustrates yet another need for collaboration. Partnerships between leading financial service providers and CUSOs make it possible for credit unions to purchase and offer high-end services at very reasonable prices.
And while features are important, so is around-the-clock support. Members expect the convenience of performing banking functions via phone or online at any time of the day or night. This goes beyond simple functions like viewing account balances. Members want to be able to apply for loans, open IRAs, compare interest rates on credit cards and access other financial services.
A daytime call center no longer satisfies member expectations. Outsourcing after-hours and overflow contact center operations reduces costs while providing a personalized, professional service that is seamless to your members. These representatives can answer the phone, discuss products, qualify applicants for loans and open accounts in exactly the same way your staff would. Scripting and terms/conditions can be set by each individual credit union.
In addition to handling inquiries on a variety of financial services, contact centers can help credit unions communicate effectively with members about mergers, data processing and home banking conversions as well as regulatory changes. Many credit unions leveraged professional contact centers to obtain member opt-ins required by Regulation E. Others have used contact centers to communicate with members about natural disasters that closed branches or disrupted service, while simultaneously providing 24/7 support for member questions and requests during that time.
Promotions for sticky products like checking accounts and credit cards are also extremely important. To stay top of mind, credit unions need to market their products throughout the year and offer attractive incentives, including rewards points, cash back, introductory interest rates and other special offers.
Industry CUSOs again play a vital role by offering consultants who can work with credit union staff to design promotional terms, target members and handle the campaigns. These CUSOs combine the expertise needed to maximize results with economies of scale that make these promotions affordable for credit unions of all sizes.
All channels should be utilized to market services, from branch displays and tellers to direct mail, statement and e-statement messaging, web banners and inbound and outbound calling.
Finally, collaboration with selected partners also allows credit unions to address other needs such as student lending products, business continuity planning and disaster recovery planning.
Revenue and membership gains are important, but cost cutting and risk management are also essential to ensure a solid future for credit unions. Working with industry partners that provide advanced fraud and risk management is a key ingredient to keeping costs low. New technologies empower members to prevent fraud by locking and unlocking their credit or debit cards in seconds.
Retaining a CUSO with expertise in collections can greatly reduce the risk of losses while increasing cure rates. Look for a dynamic collections solution that combines advanced technology with a well-trained, tenured team of professionals who are dedicated to serving the credit union industry. A high-performing collections service can deliver an 80% right-party-connect ratio and successfully convert more than 50% of delinquent accounts.
It's time for credit unions to make a bold move to expand their market share. Giving consumers the right products at the right price with comprehensive 24/7 support sounds challenging. But by collaborating with CUSOs and other industry partners, credit unions can successfully compete with much larger financial institutions resulting in increased revenue and low costs.
Chuck Fagan is executive vice president
of PSCU Financial Services.
Contact 800-443-7728 or Cfagan@pscufs.com