NEW YORK CITY—What’s love got to do with it?
A lot, according to Mollie Bell, chief innovation officer with the Filene Research Institute.
Bell told PSCU’s MoPRO meeting here that love for the credit union business model and what it means to people—especially Millennials—will be critical for future growth. But she also made clear that love alone cannot conquer all.
Filene's Mollie Bell speaking at PSCU's MoPRO meeting.
Bell pointed to data showing that the wealthiest 80 people in the world have approximately the same amount of wealth as the poorest 3.5 billion people on Earth. That kind of disparity holds true in the United States, as well.
“We’re now worse off in this regard in our nation when we were forming credit unions at the beginning of last century,” said Bell. “Think about that. It’s very significant.”
But how is it significant? According to Bell, it has everything to do with the fact that “more Americans today are living on the edge than ever before. While the middle class is growing, we’re evolving the definition of middle class, which is doing more with less. What are we doing at Filene with that? We’re talking about relevancy.”
Relevancy & Love
Relevancy is where the issue of “love” comes into play, according to Bell, who said credit unions should not misunderstand that just because they have higher Net Promoter scores than banks doesn’t mean CUs will be relevant to consumers in 10 or 20 years.
“A lot of it has to do with the fact people have a lot of expectations of us and, quite frankly, we’re really not delivering it,” said Bell.
A common theme at the PSCU meeting, Bell noted that the “digital revolution in financial services is here.” What that means, she said, is that it’s “time for credit unions to not be complacent. Now is the time to focus on relevancy.”
Bell drew many of the observations and insights she shared with the meeting from a Filene Report, “Choosing Relevance: How Credit Unions Can Harness Transparency and Show Impact,” which was authored by Bruce Cahan, the president of Urban Logic.
“Increasingly, financial institutions will have to be able to deliver something distinctive to their customers. You must have clarity of purpose,” stressed Bell. “So I will challenge you to try to think about your strategies from the eyes of your members.”
As she noted earlier, what members are seeing is great experiences from other providers that they want from their credit union. Bell quoted Dennis Campbell of Harvard, who observed, “You can’t be OK at everything anymore.”
Five Suggested Strategies
So what should credit unions do? Bell offered five suggestions.
- Find your white space. “You must better understand what the prospective, and that’s the key word, prospective members value? Walk in their shoes and understand it deeply. And understand what they don’t value. What do you need to do to deliver that to them, and what would you need to give up in return?”
- Focus your technology investments. “Our research would say credit unions are super-challenged to know what to invest in. There is a huge channel play going on. It’s not black and white; consumers want to consume you in every channel. What they do in those channels is what’s changing. So you’ve got to focus your technology investments on your members and member-facing technologies.”
- Be a knowledge hub. What is that? Bell said it's all about the notion of sharing. Bell quoted Bruce Campbell, who said, “You have a real opportunity to serve in your community as a place where people can come to share life-event knowledge. So can the credit union serve as a hub where members can gather? It doesn’t have to be in a branch. It could be virtual. That is something Bank of America would never do.”
- Impact + Measure + Tell. Bell noted that credit unions love to tell their impact stories, but not one CU interviewed for Filene Report measured their impact in a meaningful way. “Not one. I’m talking about measuring how you help members and affect their lives. There are ways to do it, and you as an industry need to shout it from the rooftops and not be humble about it. Make your impact, measure it, and tell that story.”
- Embrace Your Roots. Bell suggested that credit unions so often “want to be banks so bad, and we forget where we came from. Why are we here? That is a differentiation strategy. Hands down, absolutely, we can differentiate on why we’re here and the affect we have in the communities we serve. Brands matter. Today more than ever people are embracing this. People want to do business with brands that are doing good. This can increasingly be part of your differentiation strategy. This notion of social good and cooperative good really means something.
“So what does love have to do with it?,” asked Bell once more. “The cornerstone of differentiation is understanding who you want to serve, and why. When so many Americans are living on the edge they need you more than ever to understand it’s them.”