By Ray Birch
ST. PETERSBURG, Fla.—What should credit unions in 2024 be careful to avoid? Becoming the “soda machine at the end of the hallway,” according to one person.
That’s the advice from Scott Young, managing vice president, innovation and emerging services at PSCU, who told CUToday.info the new year is not going to bring a slowing down of the digital transformation changing the landscape, and that’s particularly true of the ongoing movement toward one member service option.
“Everything you're seeing right now is more self-service,” said Young. “I've been traveling a lot and the number of untended shopping kiosks from stores that are popping up in airports--I'm impressed at how fast these are appearing. This is where you walk in, there's no cashier, you pick stuff up, and based on sensors they know what you have. And then you either scan your card or use your app and simply walk out with your goods. You get an e-mail receipt. It is clear we are just becoming a much more self-service culture.”
The Lesson from One Experience
To illustrate his point, Young share a story about a recent trip to a convention.
“I left my house. I drove to the airport and used my digital transponder to pay my tolls. I got to the airport parking garage and it told me digitally how many parking spots were available per floor,” he recalled. “I had already checked in to the airline through my app and selected my seat. I did need to show the TSA agent my driver’s license. I got on the plane, landed, and I had already selected my car through an app. I scanned the QR code at the rental car exit—I didn't talk to anybody. I bypassed all service counters. I already checked into my hotel and selected my room, bypassing the front desk completely. I did all that without interacting with a person. But then, the soda machine at the end of the hallway only took coins, and I didn’t have any.”
Young said the experience was a clear example of how he and others are living entire says digitally, until he got to that one “legacy” experience.
What Was Learned
“And the reason I like this story so much is the lesson I learned is you don't want to be that soda machine at the end of the hallway. You don’t want to be that legacy experience in the middle of a digital world,” said Young. “The question then is, how are we addressing digital transformation and making sure we're not that soda machine, but are instead creating the digital experiences that are on par with all the other digital experiences our members encounter?”
Time to Journey Map
Turning to credit unions, Young emphasized CUs are not headed for robots and kiosks replacing people, but said major changes are needed, and 2024 is the time to start.
“I encourage credit unions to journey map out their member experiences—understand what are those jobs to be done that are still legacy or manual and determine if there’s an opportunity to move those jobs to a digital experience,” he said. “Understand where those soda machines are and move those experiences to a more digital, instant and more convenient experience.”
Scott Young
Young said some of the menu offerings that used to be nice-to-haves for a credit union are now tables stakes, such as immediate access to accounts.
“If you open a checking account today, you want a debit card. Sometimes we can print you off a plastic card in the branch, or you wait three to seven days for one to come in the mail,” he said. “Especially with all the apps, fintechs and non-traditional options, having immediate access to your account credentials and being able to use those in real time are table stakes in 2024. Think about it, today I can go and apply for a credit card and I can get approved, get my card credentials pushed to my mobile wallet in real time. I can use that account as soon as I have been approved, versus yesterday we would have had to perhaps wait three to five days for plastic to come in the mail.”
It's Not Yesterday
Young pointed out a wait of three to five days isn’t that lengthy a span of time—at least by yesterday’s standards.
“But with everything moving towards immediacy—immediate gratification—you really want to be that credit union that is enabling immediate access to account credentials, whether that's a debit card, a credit card or even a loan disbursement,” he said.
Looking Forward
Meanwhile, looking forward to other priorities for 2024, Young expressed concerns credit unions may be falling behind with “share of mind” with Gen Z and even Gen Alpha. He suggested credit unions need a much stronger social media presence to be even considered by these demographics.
“We need to be the trusted financial resource for them,” he said. “We need to somehow take what we do best from our credit union industry and become that trusted resource on social media. Be that social media voice to get the share of mind from those younger potential members.”
Are credit unions paying attention?
“I think some are,” Young said. “I've seen an uptick in the rate of social media participation by credit unions—such as podcasts. The good news is we’re starting to see that credit unions realize they need to get in these channels, to capture that share of mind from younger consumers.”
‘The Rails are Now Live’
In addition, 2024 is also going to be about instant payments and RTP, Young added.
“These rails are now live. Different use cases are going to come out of instant payments, RTP,” he predicted. I think the adoption is picking up in the business-to-business space, being able to pay somebody…the accounts payable department being able to manage cash flow until the last minute. I think we are going to see bill pay revolutionized, as well.”