Where Credit Unions May Be Missing Out

April 22, 2017 – CUtoday.info

FORT WORTH, Texas–-FOMO. Squad. Bae. Shade. If a credit union doesn’t understand the meaning of the terms, it isn’t alone. However, the credit union may be missing out on connecting with one of the fastest growing segments in the financial industry.

In remarks to the Cornerstone CU League’s annual meeting here, Dave DeFazio, a partner with StrategyCorps, spoke to nearly 50 credit union leaders in remarks themed, “Lessons from the World’s Mobile Experience Leaders.”
Knowing what words and abbreviations such as FOMO and Squad mean in a different context, he said, is imperative for a credit union’s growth and success.

“If you believe mobile services and millennials are important to the future of our industry, we’ve got to do a better job of learning their language,” he said.

Examples Cited

During his remarks, DeFazio showed numerous examples of experience-based mobile apps that are changing the way the financial industry works. “Experience trumps service,” he reiterated time and time again, driving home the point that mobile users care more about the experiences offered through their apps than they do the types of services.

For example, apps like Starbucks, which DeFazio calls “the best mobile payments company in the world,” let users pre-order coffee, text gift cards to friends, rack up loyalty points and –credit unions take note – make payments straight from the app.  “They really have become the experience standard for mobile payments,” DeFazio added.

Users of the Starbucks app have a much higher transaction size than the people who use payment cards in the store, DeFazio explained. Therefore, Starbucks is paying a lot less in transaction fees, saving up to $20 million a quarter just by processing more transactions through the app. “This is money that’s coming out of the pockets of the financial industry,” DeFazio said.

Disappearing Payments

“Disappearing payments” – how DeFazio describes payments without cash or a physical card present – is one popular characteristic of experience-based apps like Starbucks, Venmo and Amazon. But it’s also weakening the bond between members and their credit union.

So how can credit unions – especially ones behind the curve with mobile – compete with the mobile offerings out there?

“There are a couple of layers to that,” said DeFazio. First, make mobile your mission.  “If you don’t think mobile is playing a big role in your success, you’re in for a long road ahead.”

Second, he suggests making your mission visible to your core processor. “Be vocal with your core processor, challenging them to keep pace with the big banks,” he added.

Let Members in on the Secret

Lastly, let your members in on the secret. “So many things are going on with mobile banking. When it gets the least bit complex, it can be hard for members to keep up,” he said. “Preach and teach the benefits of mobile services to keep members up to date on all you have to offer.”

Of course, simply having a mobile mission is not enough. Unity One Credit Union offers mobile banking, remote banking, mobile P2P, text banking and more. “Adoption is a bigger challenge than implementation,” said Scott Ward, Unity One’s executive vice president.

DeFazio suggests the best way to get members to adopt mobile offerings is to turn employees into ambassadors. “Institutions that excel with member connections are those that make their employees their best users. If you start with that kind of mission, you’ll have tremendous advocates for your services,” he said.

Another way to fuel member enthusiasm is to offer services that focus on mobile lifestyles. DeFazio and StrategyCorps, a Nashville-based financial technology company, work with Catalyst Corporate to offer such a service: Checking with Benefits.

How Account Works

Checking with Benefits uses a mobile app to provide retail discounts, cell phone protection and identity theft protection to users. Tied to a member’s checking account, the service not only strengthens member engagement, but also helps credit unions generate fee income.

With this service, Catalyst Corporate also provides credit unions free turnkey marketing kits to help credit unions maximize member adoption of Checking with Benefits.

“Checking with Benefits is lightyears ahead of what the big banks are beginning to implement,” said DeFazio. “We’re already trendsetters in this department, instantly letting community institutions beat the banks at their own game.”

DeFazio will present a free encore webinar of “Lessons from the World’s Mobile Experience Leaders” Friday, April 28 at 1 p.m. CT.

Register today at www.strategycorps.com/catalyst.

For more information on Checking with Benefits or other Catalyst Corporate mobile offerings, email contactus@catalystcorp.org or call 800.442.5763, option 5