Win Against New Competitors
Published on CUES Skybox Blog on April 6, 2015
An emerging wave of competition is on the horizon. Here are tips for preparing for them.
New technologies–particularly digital wallets and social media–and Millennial preferences and expectations are driving the creation of new business models that represent existential threats to traditional financial institutions. Denying these fundamental shifts is a recipe for failure; credit unions need to evolve their culture, business models, and products or be left behind.
A recently published Bluepoint Solutions report, “Disruption in Financial Services: Threats and Opportunities,” identifies and explains the challenges facing financial services companies today. Here is advice and recommendations for credit unions looking to win against the new competitors.
How can credit unions stay relevant to Millennials, and what are the key service offerings they should be providing to capture this group?
Millennials look for ease of use, convenience and consistency. Because of their strong connection to mobile phones and 24/7 connectivity, Millennials value immediacy and self-service over building relationships with tellers and physically going to a branch to conduct their banking.
Credit unions looking to stay relevant need to eliminate any possible need to actually visit a branch. This means having a mobile first strategy. A credit union should have a native app that allows such basic transactions as mobile deposit, P2P payments, bill-pay, etc. USAA’s mobile banking app is very far ahead in terms of available features; the bank’s customers can do everything inside the app, even file insurance claims and manage investments. Apps like this have a lot of appeal for Millennials.
What are some industry-leading mobile features to compete successfully with non-banks?
Mobile check deposit, bill-pay, and P2P transfers are necessary for a credit union to even be considered as a primary financial institution for a Millennial, but they won’t set your institution apart from the competition. The next generation of mobile features includes wearable technology (smart watches and wristbands), spending analysis reports, budget tracking, and proactive recommendations for products or services. For example, if a member is planning to buy a car or get a mortgage, provide assistance with and recommendations for loans as well as information on where to search for these items.
Credit unions also need to make mobile the primary focus of new member acquisition campaigns. Redirecting marketing and advertising funds to heavily promote your mobile offerings is key.
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