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The concept of trust is the foundation of every financial relationship there is between a customer and their financial institution, and twice-over with a member and their credit union. 

That level of member faith managed to survive the COVID-19 pandemic and kept the financial sector relatively healthy as far as the institutions themselves are concerned. But one long-standing lesson the pandemic reminded us is the fact that credit unions needed to meet certain newfound digital realities in the years ahead.

To meet those new realities, however, means understanding data. W. Edwards Deming has a famous quote: “In God we trust. All others must bring data.” Data in the financial services industry offers a built-in advantage to certain financial institutions over their competitors. Credit unions, for instance, should inherently understand how they can and should work to consistently improve the member experience by exploiting the gathered data they have. By using such data, credit unions can then address member segmentation, which then enables them to better understand their members and the context with which they consume products and services. 

There’s trust, but is there loyalty?

A PYMTS and PSCU collaboration, “Credit Union Innovation: Responding to Member Demands For Digital Financial Services,” found that 24 percent of credit union members would move on to another financial institution to gain access to more updated and innovative financial products and services. The study also found that 74 percent of credit unions made investments in mobile banking in 2021, largely to combat the effects of the COVID pandemic. 

Many in the credit union industry discovered the hard way the importance of keeping their memberships ahead of the curve when it comes to offering forward-thinking and improved access to their financial holdings. Referring to digital innovations like digital media streaming, PSCU President and CEO Chuck Fagan explained to PYMTS in an interview that “adjacent experiences, whether it’s through Netflix or Amazon, are putting pressure on the financial side of things, and it’s no longer going to be enough to just check the box.” 

The trust is still there, says Fagan, “but the loyalty may not be as deep as it once was. You’ve got challenger banks. You’ve got tremendous budgets that these larger financial institutions have in creating [digital] experiences. For credit unions, they have to assemble those best-in-breed partners and create that unified, seamless, integrated experience. That’s not an easy task.” 

Well, at least we agree with the first part. The last part, not as much! QCash’s small dollar lending software-as-a-service application uses a programming interface to seamlessly integrate with your credit union’s core processor, online banking, and mobile platforms. That means the whole process is easy for you (taking as little as eight weeks to implement) and seamless for your members. They just tap, review, consent, and GO! 

This is where credit union services organizations (CUSOs) like QCash are crashing the party with updated and more forward-thinking digital advantages for credit union members. Once again, data has shown that credit union members prefer to have access to peer-to-peer transactions, mobile check deposits, and other services through these trusted entities, making credit unions’ need for digital transformation more important than ever. 

Credit Unions Financial Health digital lending
Photo: Thought Catalog | Upsplash

When loyalty tomorrow really means “ease-of-access” today

Now that credit union branch experiences continue to evolve and mobile banking and financial services picked up speed due to the pandemic, HOW credit unions offer digital experiences is now the difference. 

In the same interview, Fagan addresses how similar loyalty comes to the ease-of-use for the average member experience. “We say easy is the new loyalty. The easier the enrollment process can be in 2022, the easier the experience is going to win out. If your decision as an FI [is to go] with a technology that’s clunky and doesn’t integrate with all the other connection points you have in that digital experience … if that experience is disjointed in another way and not easy, then I think that relationship breaks down as a result.”

At the end of the day, such sentiment from credit union members makes onboarding of digital assets a major difference-maker for credit unions, and a feature that must be addressed to the detail. According to the aforementioned Credit Union Innovation Report, in fact, nearly 40 percent of credit union members said they would go to a competing financial institution if their credit union didn’t offer mobile check deposit on their mobile app. The same percentage of members also claimed they would leave if their credit union failed to offer digital cards that link directly to their digital wallets. 

Regardless of the digital banking feature, Fagan says, if those products or services that really matter are available at those members’ credit unions, their loyalty will remain. You can have all the Cash apps and PayPals in the world, but member trust and loyalty with credit unions will stick around, as the statistics in the study showed.