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The race is on. Companies are striving to enhance the customer and member experience through increasing levels of personalized service. The availability of "big-data" and ever-improving data analytics is making financial services, an already competitive industry, even more competitive. "Knowing the customer" and using that knowledge to better serve them takes on a new meaning in a world of data and artificial intelligence. Each and every touchpoint is an opportunity to add value, increase satisfaction and remain relevant.
Almost all companies have been, or at least claim to be, customer-centric. What's new for most organizations is engaging technology in advanced and innovative ways to create a truly personalized experience. Creating an individualization strategy first depends on collecting multi-sourced information about a person's transactions, purchasing decisions, demographics, surveys and other information. Quality data is the basis for generating customized individual profiles that need to be used to enhance service.
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Credit unions must keep up in creating an excellent member experience in order to thrive in this difficult competitive environment. Like many organizations they are facing myriad challenges (e.g., COVID has changed behaviors in ways that will endure). The pandemic has accelerated the need to connect digitally with consumers. Financial research firm BAI found that more than half (52%) of banking consumers increased digital usage during the pandemic and that vast majority (87%) plan to remain mostly digital after physical locations re-open. They discovered that a wider array of their financial transactions can be completed without the branch, thereby challenging existing cost structures.
With bricks and mortar less important, people are becoming more disconnected from institutions. BAI told how when compared to a year ago, fewer people would stay with their primary financial services provider if they were to find a better experience at another company. Most younger people, Gen Z (66%) and millennials (75%), said they would switch firms for a better mobile banking app or smarter digital capabilities. Big-data consulting firm VelocitySolutions told how the pandemic is making it harder for credit unions to keep up with regional, community and mega banks in these areas.
Translating credit union data into personalized member solutions takes work. CFS, a credit union research and data analytics firm, told how vast amounts of data that credit unions collect is underutilized. Importantly, CFS also reported that 39% of credit union leaders felt digital transformation and a focus on personalization were inhibited by a lack of technology capabilities among staff and outside partners.
Organizational silos have formed another major obstacle. An IBM commissioned study about personalization strategies found that most companies (57%) felt that silos were a problem. Comprehensive data strategy must cut across departments, because customer data is dispersed throughout the company. Yet a majority realized that multiple departments had their own strategies that were not aligned across different areas. Silos inhibit information flow and cause miscommunication, greatly reducing the capability for integrated organizational performance.
Cutting across organizational silos can be successful when an organization has developed and embraced a shared vision, mission and strategy that are built on core values. Leadership, starting in the board room and the C-suite, are accountable, and their culture sets the stage for broad ownership. Existential strategic challenges are facing credit unions. Their ability to fund and support the technology infrastructure to deliver a personalized experience at scale is in question. Their ability to offer a safe and secure environment for members is equally as challenging. An independent third party can objectively help navigate the strategic challenges and the options to address these challenges and related opportunities. Considering difficult choices for survival, like merging, can be personal for board members and C-suite leaders.
Engaging an objective, thoughtful outsider to facilitate thinking and group dynamics, and serve as a confidential resource will allow all leaders to participate actively in the strategic process.
A strong rhythm of strategic communications gives all stakeholders the context and roadmap to execute the strategy. It makes clear the priorities and aligns resources in support of those priorities. An IBM study analyzed companies succeeding in this digital world, as evidenced by outperforming peers in revenue and profit. Outperformers were data driven, using data to enhance both the employee and customer experience. Leadership prioritized and invested; they made certain that they had the learning, skills, work environments, systems and communications to support data-driven personalized service.
When personalization is done right, members will have a valuable experience that gives your credit union a competitive edge.
Stuart Levine Stuart R. Levine is Chairman and CEO of Stuart Levine & Associates LLC in Miami Beach, Fla.
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