One thing is unavoidable for all credit unions – consumer behavior continues to shift toward virtual service channels.
We’re beginning to see rapid adoption of mobile banking and a desire for native tablet banking apps. Online banking, too, is evolving with heightened expectations for personal financial management and more robust payment options.
We are living in a Web-based world, and expectations for high service quality extend well beyond the office hours at your brick and mortar locations. Gone are the days when high member satisfaction meant having friendly and knowledgeable staff. Credit unions are now being judged on a dizzying array of devices and are expected to deliver great service at each point of contact.
Consider this, in the fall of 2001 14% of households reported using online banking according to a Raddon Financial Group survey. However, a decade later in the fall of 2011, Raddon reports more than half of all households or 63% bank online. This same survey further reported that mobile banking usage had grown to 15% of households, double what it was just two years ago. What this means for the credit union industry is that those who linger in expanding their virtual channel services will lose accounts and market share.
In the wake of Bank Transfer Day, credit unions have an opportunity to heighten their position as trusted financial intermediaries to consumers and businesses that may not be as familiar with credit unions. This is both a challenge and an opportunity.
While attracting new members to the cooperative is certainly an opportunity to be embraced by all, the challenge may be in meeting the high tech delivery expectations of consumers defecting from the major banks. To do so, many credit unions must upgrade their technology to meet the demands of an increasingly digital and mobile population. Credit unions must consider deploying more robust online services and serving the mobile banking needs of all members regardless of their preferred device.
Additional and enhanced self-service channels are not only expected by members, they reduce obstacles to market growth imposed by brick and mortar limitations. Seamless integration of self-service channels will transform the branch of the future where routine transactions are handled through self-service channels and increased face-to-face assistance can be provided for those needing individual attention.
There are new market opportunities through the growth of online, mobile, and tablet products and services. In its fall 2011 National Consumer Research, Raddon found that 76% of Gen X and 83% of Gen Y are using online banking, and in what may come as a surprise, 59% of baby boomers claimed online banking usage, as well. It is not just for the younger, tech-savvy demographic.
As the smartphone becomes modus operandi and the primary Internet device, we can expect to see the same trend. In fact, 32% of Gen Y already banks using their mobile phone.
Online and mobile banking allows credit unions to level the playing field with larger, national competitors. Upgrades in technology that encourage and enhance online and mobile services deliver an attractive local option with all the perceived bells and whistles of the big financial institutions.
As Bank Transfer Day proved, and continuous surveys attest, consumers believe they receive better customer service and relationship-based banking with community financial institutions. With Americans looking for credit unions to do business with, now is the perfect time for the adoption of mobile and tablet technology and expanding online capabilities.
Self-service is becoming more ubiquitous. Across the country, more and more Americans are looking to do their banking through online and mobile services. It is time for credit unions to understand how deep impact technology is having on their self-service and branch channel strategies with the advancement of technologies.
As online and mobile banking penetration escalates, services such as remote deposit capture, person-to-person payments, and mobile payments become more important.
The embrace of online and mobile banking will require simplified solutions that improve usability by both employees and members. As more transactions are done through self-service channels, customer satisfaction will be based more heavily on usability and simplicity factors that aid rapid, error-free transactions.
Online and mobile banking is not the wave of the future, it is now, and it is increasingly becoming the expectation of consumers. There is no shortage of challenges for credit unions in today’s economic climate, but by improving technology and increasing online and mobile offerings, costs will go down, revenue will go up, and members will be satisfied.
Chris Jackson is director of product management for Open Solutions Inc.
Contact 860-815-5000 or Chris.Jackson@opensolutions.com
