Product frictions are a lack of product knowledge by the user/member. Common product frictions at a financial institution include not understanding how a skip-a-payment affects a loan's terms, and how a check hold works and affects available funds.

Process frictions are obstacles found most commonly in the purchase journey. One example is the loan purchase journey. The loan process starts when the member first identifies the need for the loan. This is often called discovery. Next, the member will evaluate their options for the loan, and then make their purchase. Once the loan has been opened, the next phase involves access/use of the loan. This is followed by the final step of either recommending or repurchasing.

This process holds many potential friction points. Some common frictions are:

1. The consumer not being aware that the credit union option exists in the first place;

2. The application process being obstacle-filled, resulting in abandoned carts and excessive length; and

3. The loan fulfillment process taking too long.

People

When 600 credit union leaders were asked to "please describe the friction the member has doing business with the credit union," the most popular answer was surprising. It included the word "lack" – specifically, a lack of a data culture. Data holds many insights, but it is hidden in the 60 to 100 data systems within a credit union. The ability to connect the data and create insights is one part of the solution. The other comes when the credit union brings talent on board who have the capability to consume data and make iterative changes.

Identify, Evaluate & Resolve Member Friction

The following are four actions a credit union can take to help identify member friction, evaluate it, and create a pathway to reduce or resolve it.

Action #1: Get Your Data

Gather data on the perceived member experience in its current state. Seek this input from leadership as well as from those who are close to members. A great starting point is to identify external end-user friction (on the member's end) and then identify internal friction (the friction business units have while interacting with each other.)

Action #2: Map the Member User Experience (MUX)

This can be accomplished with software or a simple process map. The key points are to identify critical phases in the member journey and then identify the friction points. Add available data to each phase that either supports or refutes the perceptions.

Member Friction Example: Auto Loan 

Members may encounter friction along their purchasing journey. In the example of an auto purchase, the common frictions include:

• Little awareness of credit union financing in the channels they use in their search;
• Few or no evaluation tools provided by credit unions
• Challenges in engaging online to obtain the loan, or the requirement of visiting a physical office;
• Little or no engagement with the member post-purchase;
• Few channels provided for advocacy of the credit union's products; and
• Suffering of repurchase efforts due to friction in the application process.

Action #3: Analyze Your Findings

A list of frictions will appear, and they need to be prioritized in terms of member impact and feasibility. The "friction list" can be divided into short- and long-term projects.

Action 4: Create a Friction Roadmap

Build out your roadmap, creating a timeline that includes work streams encompassing people, products and processes (example below).

Understanding member friction is an excellent exercise for annual strategic planning, quarterly planning or other scenarios during which focus is unclear. It provides a quick insight into the end-user/member experience and clarity to a roadmap for resolution.

Anne Legg

Anne Legg is the Founder of THRIVE Strategic Services, a San Diego, Calif.-based company that assists credit unions with data transformation, and author of "Big Data/Big Climb," a credit union playbook for data transformation.