Moonlighting always meant having a second job on the side. In the payments era of the connected economy, this takes on new meaning – one that credit unions (CUs) should know.
In an interview with PYMNTS, PSCU Chief Growth Officer Brian Scott discussed the challenges UCs face in an environment where PYMNTS research finds nearly a quarter of consumers are willing to switch financial institutions. if their digital desires are not met.
Additionally, 45% want all of their finances consolidated into one digitally-focused financial entity.
These stats come from the latest Credit Union Tracker, a PYMNTS and PSCU collaboration, and Scott sees them as indicative of a larger trend.
Calling self-service options more important than ever, Scott said the results tell him that “self-service is extremely critical. What are the areas where members really want self-service? Loans are an essential part of this. No one wanted to go to a branch and sign a bunch of paperwork for a loan anyway.
“Now that we’ve had experiences that say I don’t have to do it in person, I don’t have to do things on paper, it’s not about the pandemic anymore,” he said. declared. “It’s just about [wanting] it’s easier.
In search of “easier” – and in search of financial brands they can trust in a time when options proliferate – Scott said: “I think people are turning, at least to black, to other providers for easier financial services.”
“That’s where you see things like Chime, Klarna, Square and some of these FinTech companies that are really gaining market share. They may not take the whole financial relationship, but they take pieces of it. »
It’s a trend that can cause sleepless nights as the CU sector catches up to the digital shift.
Get it now: The Credit Union Tracker
Take advantage of digital options
As members test disintermediated FinTech offerings at a level Scott believes is higher than surveys reveal, credit unions must keep the innovation pedal to the metal. And because they often don’t have the resources to develop their own technology, they turn to credit union service organizations (CUSOs) like PSCU for the tools — and guidance on how to deploy them.
It is complicated. “Part of it is about options,” he said.
“I will use myself as an example. I love using Apple Pay and some of the virtual payment wallets, but that’s not always the case. It becomes what is easiest at that time.
Invoking the late and great TV pitcher Ron Popeil – allegedly the originator of the phrase “set it and forget it” – Scott said: “People set it and forget it, like Ron Popeil.”
He added that “whether it’s Apple Pay or the Starbucks app, staying on top of that wallet is critical. Watch it [and] monitoring is incredibly critical to the success of credit unions.
P2P transfers are another piece of technology that UC members use underground. The Credit Union Tracker notes that 79% of members use P2P transfers, and it’s something UCs can hitch their cart in a marketing sense at virtually no cost to the organization.
He said, “P2P is such an interesting space. We talked about the death of cash and checks forever, and P2P is one of the last places where cash and checks are still used.
“Things like Square Cash and Venmo are great free options for a credit union to play in that space, to provide service to members without having to incur the expense of offering a P2P solution. Any credit union could just market on their website, “If you want to pay other people, use Venmo, use Square”, use those options that are available.
See also: 23% of credit union members would switch financial institutions for more innovative products
The year of changing member expectations
Long known for their expertise in member retention and satisfaction, credit unions were not at the forefront of digital transformation when the pandemic hit, and that hurt some. But it’s impossible to simply offer or embed trust — the intangible feeling members have for credit unions that dates back to their formation as specialized financial institutions serving specific populations, from government officials to unionized workers. and others.
Another fascinating statistic cited in the Credit Union Tracker is that 91% of respondents consider UC to be good sources of financial advice and expert advice on related matters.
Undoubtedly a great discovery for CUs, maintaining that high level of confidence as dazzling new options beckon regularly is a major challenge, and becomes more difficult for CUs over time.
Part of the reason, Scott said, is “because it’s so easy to moonlight and it’s easy for someone else to gain trust.”
“Maintaining that trust means their experience has to be easy, it has to work every time…they have to feel like their data is secure.” Many pieces come into play and maintaining that trust is harder than ever, but more essential than ever. Keeping that 91% is so essential. »
Sounding a caveat, Scott added that members have a new set of demands from their credit unions following the pandemic digital switchover, saying, “I will be calling  the year of changing member expectations.
Modernization is not easy in any legacy business, especially finance, which is why credit unions looking to grow are turning to partnerships that will help them meet the changing demands of their members.
“No credit union can do it alone,” he said. “That’s where it’s important to be able to make those investments, to find partners who are adaptable… and able to integrate with others. All these solutions come together. Finding the ones that work well with others – play well together in the sandbox, so to speak – is really key.
See also: More and more credit unions are adopting digital services to compete with banks and FinTechs