At Prisma Campaigns the 2020 Planning Process is going to start by next week and I'm sure most of the companies are in a similar path these days. And the question comes on top of the priority list. How to sell more, increase member experience and what digital marketing campaigns are we going to run?
The Digital Banking Report 2018, looking at the progress made by credit unions and smaller banks with digitalization, came to the conclusion that the majority of smaller institutions of all types, which included the majority of credit unions, were “stalled”, with only the top 40% of all financial institutions adequately positioned to take advantage of digital technologies and advanced analytics.
The report suggested that those which were stalled were “too small” to succeed in the highly competitive digital banking eco-system.
Where the smaller CUs are going, then?
A large number of credit union leaders do not see a dichotomy between being small, service orientated, member-owned and non-profit and embracing modern techniques for managing customer data, for extending the customer base and offering a wider range of services, without prejudicing their tax-exempt status.
Different and similar
According to Imaginet, numerous credit unions have adopted new ways of leveraging technology to achieve more with less, in order to remain competitive and relevant. Modern productivity and customer engagement tools, and omnichannel tracking are not only for the big banks. Credit unions are going digital in increasing numbers to better serve their members.
But whether these credit union leaders are representing the natural person CUs which serves individuals or the corporate CUs, which serves the former with operational support, funds clearing tasks, and product and service delivery, all are extremely conscious that CUs operates a different business model from commercial banks, even though they may operate in similar ways and may offer many similar services.
This means that, for these credit union leaders, digital technologies, advanced analytics platforms, productivity, customer engagement tools, and any omnichannel tracking platforms have to be adjusted to take into account the operational and quintessential differences, even if the end results.
The seamlessness across multi-channel devices, the personalization and even the services offered are, in the end, the same as those in commercial banking.
Information technology at scale
Acquiring technology means a significant investment. This is one reason why banks initially, with their larger scale, appear to have a competitive edge over CUs. The increase in regulation and the imposition of the corporate credit union assessments are causing a number of the smaller ones to disappear. Previously, the credit union, although smaller, always won hands down on personalization and cost. Now, the banks are doing personalization in a big way. Competition for both banks and CUs includes fintech and internet providers who have national reach and practically no traditional operating costs.
Without more scale, credit unions that rely on the traditional business model risk disappearing through merger or liquidation. Fewer, albeit larger, credit unions would diminish the political clout to keep their non-profit status and their independent regulator.
The good news is that CUs can acquire technology to operate that scale through collaboration, through Credit Union Service Organizations (aka: CUSOs), which are creating efficient and effective operational services while significantly reducing operational costs for their credit union owners and clients.
The CUSOs save money on reduced staffing, vendor and technology costs. They are also identifying new non-interest revenue sources for credit unions by providing non-traditional financial services to members and operational services to other CUs.
The risk of staying with the status quo has now exceeded the risk of change, so the stalling which the Digital Banking Report identifies as being typical of smaller financial institutions has to be replaced with a sense of urgency to take advantage of digital technologies and advanced analytics.
Prisma Campaigns understands that in today’s digital world analytics and innovation are a top priority for CUs. All of them, no matter the size of the company needs advanced solutions to leverage their member's data, deliver personalization at scale and orchestrate effective omnichannel campaigns.