One of the great challenges of technological innovation today is the understanding that for any product to find success, one cannot simply innovate for the sake of innovating. Finding true, sustained, long-term success is knowing how the product or service addresses a member need and solves that problem in some way.
Member need is the game
That idea was explained brilliantly in an article by The Financial Brand early last year, detailing how credit unions themselves need to understand that innovation can’t just start from anywhere and be successful. Innovation needs to begin where your members or customers are.
The article explains that in 1960, a New York bank introduced an ATM-like “Bankograph,” an amazing piece of technology for the era that automated payments and photographed receipts for account holders. Unfortunately, it was doomed to total failure for no other reason than it was probably too ahead of its time. Apparently, only unscrupulous gamblers and “unsavory types” using the machine didn’t want to be scrutinized by face-to-face tellers.
Customers were simply uncomfortable with automated technology at the time and trusted that one-on-one relationship they got from a teller. The Bankograph wasn’t solving a “member need” for customers at the time. It would be nine years later, September 2, 1969, before Chemical Bank would install an automated teller machine prototype in its branch in Rockville Center, New York.
Technology must be about solving a need in a new way. The Bankograph wasn’t solving a problem for anyone because customers weren’t showing they needed an alternative.
Today, the script is flipped. Since the turn of the 21st century, at least, consumers have demanded digital access to their financial accounts, especially since the pandemic required it. According to Forbes, 78 percent of adults in the United States prefer remote or digital banking as opposed to going into a branch.
That’s why QCash is so proud to have played our part in helping to usher in a new era of digital small-dollar lending. Wherever your member finds themselves in a compromising financial situation, whenever the time of day, they know their credit union’s app will get them the funds they need immediately. Within a few finger taps, QCash’s automated, relational-underwriting platform delivers on a member need and deposits the requested loan amount directly into their account within 60 seconds, if not sooner.
We feel fortunate that we can serve so many members in the credit union movement while continually striving to bring more cooperatives and their members into the digital era.
“Help me, help YOU!”
Innovating by way of member need is an essential component to a cooperative’s growth.
In fact, we would contend it’s more important. The level of competition in the market is as strong as ever, with credit unions competing on multiple fronts including banks, non-bank fintech, and, unfortunately still, predatory payday lenders.
Consumers nationwide have the option these days (wisely or not) to rely less on their prime financial institution or its products than in the past. Consumers today are constantly on the lookout for better deals, lower rates, or more favorable terms on an ever-expanding list of products or services through a myriad of “non-bank” entities that fail to bring the member or customer back into the financially-secure arms of a mainstream financial institution like a credit union.
While 63 percent of consumers in the U.S. possess at least one in four major credit products with their prime financial institution, PYMTS research discovered that other banks or credit unions provided 48 percent of mortgages and 41 percent of auto loans to the same audience. This finding makes it unsettlingly obvious that consumers are more than willing to look elsewhere for better products or terms while lowering the cost of credit and bolstering their savings.
Increasing your credit union’s impact on members
According to a joint report by PSCU and PYMTS, the examination evaluated 4,097 consumers’ basis for opting for various credit products, and which ones could actually decide their choice of financial institutions. The following statistics offer suggestions to how your executive peers believe they can further improve upon member need and the advantages they’re looking out for.
- Nearly 30 percent of consumers say they would be very or extremely likely to move their primary financial institution if offered better rates and terms
The research showed that consumers are more likely to claim interest rates and terms as the most important aspects to their decision of what institution to go to. The PYMTS article states financial institutions can vie for consumers’ business by providing different terms and individual services including lower fees and commissions, longer loan terms, larger credit limits, and faster credit approval.
- 59 percent of credit union execs believe credit product set-up times have a big influence on consumers’ choices of where to explore credit products
Credit unions are making the effort to get customers or members access to credit products faster and more conveniently, undoubtedly believing products like QCash’s digital small-dollar loans have the ability to draw future members and customers.
- 45 percent of credit union execs have made very or extremely significant efforts to minimize credit product set-up times.
Consumers’ expectations for receipt of goods and services have seen an exponential increase in recent years, especially with AI-influenced services. For instance, the implementation of QCash’s small-dollar lending platform into our clients’ cores takes as little as 12-16 weeks, including full customization per the credit union’s specific requirements.
Financial services are vastly more complicated today as opposed to the days of the Bankograph. To grow the credit union movement forward, we must continue implementing fintech that makes sense for the member, a fintech that, like QCash, will provide a hyper-personalized digital experience and benefit for their members. By enabling credit unions to automate processes and capitalize on daily operational efficiencies that will sustain both organizational health and member well-being into the future.
