CUs may not have the breadth or market-share of the for-profit banks, but they make up for this with their specialized member knowledge. Learn how automation can enhance this personalized service giving them a further advantage over for-profit banks.
Credit unions or CUs, operate a lot like banks, but they are smaller, less visible and available, only open to their members, so many people do not give them a single thought. However, a lot of people love them, including many who probably also have a bank account with a commercial bank.
The Credit Union National Association, CUNA, claims more than 114 million members in the USA as of March 2018, whilst WOCCU oversees 46,000 CUs worldwide outside the USA with 172 million members.
- Credit unions pay no federal or state taxes because they operate as non-profit financial institutions that are owned by the members who share a common bond, teachers, veterans, firemen, etc.
- Any profits earned are ploughed back into the institution or shared as dividends among the members.
- Because they operate only to cover costs and because they pay no taxes, CUs are uniquely placed to provide more personalized and cheaper financial services for their members than for-profit banks.
For example, the average interest rate on a 36-month car loan was, in June 2018, only 3.10% at a CUs, compared with 5.19% at the banks. CUs may not have the breadth or market-share of the for-profit banks, but they make up for this with their specialized member knowledge.
The singularity of their member focus has allowed them to provide superior and personalized services, even before automation. Obviously, automation, where the CUs can afford it, enhances this personalized service which gives them a further advantage over for-profit banks. Which, with a much wider customer base, often risk offending because their campaigns offer services or incentives that have no relevance to some of their customers.
According to the 2017 Global Consumer Pulse Research, 33% of customers changed their financial institutions because personalization was lacking in marketing campaigns.
How is automation benefiting CUs?
- Automation immediately gives CUs the advantage of the closeness to their members, whatever the geographical distances involved.
- Automation has allowed CUs to jump over a previous limitation of having much fewer branches or offices compared with commercial banks. No longer needing physical offices means that more members with the same focus are attracted to use the CUs, since registration, membership, and on-boarding are all done digitally.
- Apart from the obvious automated tasks, reducing staffing costs, improved security, controlling operational risks, automated system backups, reporting schedules and a reduction of workflow errors in routine tasks, the larger CUs are already employing marketing automation platforms that are configured to meet their objectives. It offer better services to a specific groups of customers with a single interest or focus.
- Automation allows for more intimate and detailed knowledge of individual members and also to collate and update data about the industry or professional activity of the members, which, by using marketing analytics, can adjust the services provided more precisely to member needs.
The larger CUs are also using risk-based compliance audit programs and automation platforms to maintain compliance with, or reduce the impact of, ever-changing applicable laws and regulations. These automated solutions conduct compliance risk assessments on a CUs products, services and operations in real time and on a permanent basis.
Automation is changing CUs quickly. The larger CUs already have achieved spot-on personalization of members that the larger and more powerful banks simply cannot achieve with their wider customer demographics.
Smaller CUs are fusing with others in order to obtain the economies of scale and the benefits of automation. Each improvement inevitably places the CUs in more direct competition with the commercial banks and reduces the former distinctions between the two.
You may have never thought about it before, there probably is a CU for people in your profession as well. I’m certainly going to investigate it for myself!
So, if you want to incorporate a marketing automation platform for your CU, here we share a complete guide to choose the right one