By Ray Birch
SCOTTSDALE, Ariz.–Credit union leaders are already aware of the need for broad digital transformation of their businesses—now one person has some specific suggestions on precisely where that focus should be.
The credit union transformation focus needs to be on digital knowledge delivery and the call center’s ability to leverage technology to proactively reach out to consumers, asserts Cornerstone Advisors Senior Director Sam Kilmer.
That broader challenge isn’t new, as Kilmer noted that prior to the pandemic credit unions and banks were already scrambling to step up their digital offerings to keep pace with fintechs. What is new is the pace of adoption that needs to take place, he said.
“The greater need for digital transformation hit like a bomb on credit unions with COVID-19,” said Kilmer, basing his position on new Cornerstone Advisors research. “Credit unions already had a battle on their hands from the big banks and fintech challengers before the health crisis arrived, particularly in the area of digital engagement.”
And, as CUToday.info reported, 2019 marked the first year big banks passed credit unions in in consumer satisfaction ratings.
“It’s one thing to be in a battle you know is out there, fighting on the front lines. It’s another things to have artillery hit you well behind your lines,” Kilmer said. “In a battle you can sometimes get comfortable behind the front lines. But what COVID-19 did was it aimed artillery at credit unions that were not prepared for this. COVID dropped a bomb, and now it has every credit union’s attention on digital.”
As is now well-documented, among the lasting effects of COVID-19 is the mass migration to digital services by consumers across numerous platforms, including financial services. Even many of those who were previously slow to adapt to digital are now on board.
Two Good, Two Bad
Kilmer said credit unions are in good shape with digital efforts that support transferring balances and doing transactions inside the mobile app.
“Most credit unions are in their second or third generation of their digital banking app,” said Kilmer. “And they all pretty much have strong capabilities there. CUs could, improve, however, with digital banking for commercial businesses.”
Credit unions are also faring fairly well with digital account opening, according to Kilmer.
“A solid chunk of credit unions, almost all the large ones, have pretty decent capabilities for members to open up accounts remotely,” said Kilmer, who cautioned competition within mobile account opening is heating up fast as competitors such as Apple, with its Applecart origination process, expand their offerings. “That takes account opening from two minutes to 45 seconds.”
The two areas that are most at risk from the significant consumer shift to digital are call center technology and digital knowledge delivery, Kilmer said.
“With general call center resources, having the staff to handle inbound calls, credit unions have historically done better than banks,” said Kilmer.
Skyrocketing Demands
Also changing during the pandemic has been the skyrocketing demands on call centers, he noted.
“Say you’re a billion-dollar credit union and you have 10 to 12 call center reps. Now, with the pandemic, the call center may be the main—and sometimes only—way to reach the credit union. You suddenly have 10 people covering 50,000 members? You see the problem.”
Sam Kilmer
While call centers across the nation are adding staff, a topic CUToday.info has covered in earlier reporting, the real issue, asserts Kilmer, is staff have to be added not only to field calls but to make outbound calls. And even that isn’t as simple as it sounds, with Kilmer noting the selling process has changed due to the pandemic, as well. With branches being closed and then reopened in a modified format, face-to-face selling opportunities are now lacking, he pointed out.
Kilmer told CUToday.info credit unions have to add staff to proactively reach out to members, as well as technology that allows call center teams to immediately follow up on inbound calls that drop off or website activity that’s abandoned.
“Credit unions have typically waited days or even a month to call back on an abandoned call,” said Kilmer. “That is far too late, The opportunity is gone by then. Now, take for example Rocket Mortgage. You stop anywhere in the process with Rocket Mortgage and they are back to you in minutes. This, too, means making sure staff are ready to reach out outside of normal business hours, like eight at night when people have time to search for financial services.”
‘Credit Unions Need to Do Better’
Finally, credit unions need to improve the “helpful content” they have available to members and the community via their website, digital applications, blog posts and more, according to Kilmer.
“Let’s say someone is looking for banking services in Cincinnati,” said Kilmer. “What are they going to find when they do a search and pull up your credit union? Are they going to get the kind of information from your credit union that makes it known they are a smart and knowledgeable organization; get information that will let them learn more about debit cards and then easily apply for one? Or, are they instead going to find information on the advantages of the cooperative system? Sure, that information is nice, but really, how many people are going to make their banking decisions based on that kind of information? Credit unions need to do a lot better here.”