By Frank J. Diekmann
If credit unions could count $1 toward their capital for every new survey announcing it has uncovered startling news the coronavirus pandemic has led to a surge in consumers using digital tools to access accounts rather than a branch, CUs would be paying out bonus dividends.
We’ve reported them. You’ve read them. We will no doubt be reporting on more such surveys. And you will no doubt be reading them again.
The real survey questions need to be: What’s going to come out on the other side of the pandemic? And are you ready (or even able) to change some entrenched beliefs?
You’ve certainly heard the anecdote often told by futurists and conference speakers that the first steam ships were built with masts and sails because “no one thought to take them off.” The coronavirus pandemic has led to the building of a new digital steamship, but how many CU leaders are really prepared to ditch the sails they call branches and the sailors trained to unfurl them?
And the Survey Says…
First, just a quick reminder of some of what CUToday.info has reported in just the last week or so:
9-Out-of-10 Online
A survey called Consumer Banking Temperature Check - September 2020 conducted by Lightico in mid-September that found 76% of consumers will avoid bank visits on some level in the future, 47% will be less likely to tend to a financial task if it requires a branch visit, and 94% have banked online in some form over the last three months.
'Crazy' Investment
Research from Ron Shevlin, director of research with Cornerstone Advisors, who argues that simply looking at the total number of checking account applications by channel overlooks an important difference in consumer behavior. “Consumers open more checking accounts through digital channels when applying for a secondary account than when they open their primary account,” he said “Nearly two-thirds (64%) of the checking account applications taken during the height of the coronavirus crisis in Q2 2020 for what consumers considered their primary account were submitted either online or on a mobile device.”
“Bankers like to believe that consumers open checking accounts in branches because they want human assistance and assurance in making the right decision,” said Shevlin. There may be some truth to that, he added, but according to Cornerstone’s study the rest of the experience isn’t as good as it is in a digital channel, and consumer ratings of the quality of the branch experience haven’t improved over the past few years (and have actually declined in some respects).
His bottom line conclusion: “Investing in improvements to the branch-based account opening experience, at this point, is crazy.”
Don't Want to See You Again
From a survey conducted DepositAccounts: 49% said they would be happy never going to a physical bank branch ever again, while just under 10% strongly disagreed with that sentiment. Baby Boomers and the Silent Generation were more likely to disagree.
‘So Many Factors in Play’
Your credit union is likely knee deep in planning season for 2021, and the strategic approach to branches must be high among the agenda bullet points. A year ago I’m pretty confident you weren’t talking about a pandemic in 2020; the first bullet point on your agenda for next year needs to be what are we talking about purely out of habit and what aren’t we considering.
Dr. Margaret Heffernan, a Professor of Practice at the University of Bath, Lead Faculty for the Forward Institute’s Responsible Leadership Program, and author of six books, told a CO-OP webinar earlier this week every organization needs to understand that it really can’t understand.
“There are so many factors in play that you may not be able to see all of them at once. It’s where very small things, like the virus, can have a disproportionate impact, and where change appears to be so random it’s very difficult to keep up,” she said. “It’s a world where the last thing that happened very rarely predicts what happens next.”
In the past that world never told credit unions in all the data and surveys they collected that people simply didn’t value physical access to their credit union.
Do you think that’s a trendline likely to inform what happens next? And are you preparing to rig the masts in 2021?
Frank J. Diekmann is Cooperator in Chief of CUToday.info and can be reached at Frank@CUToday.info. Mr. Diekmann is also author of the new book, ‘501 Name Tags: Everything You Need to Know About Business Can be Learned at a Conference & Forgotten in the Trade Show.” For info: www.501nametags.com.