Digital Innovation in Credit Unions

The credit union industry is one that has been disrupted by the rise of neobanks such as Novo or Chime, and other fintech applications. In 2021 $210 billion poured into the fintech industry as an increasing number of investors see that individuals no longer have the desire to spend every interaction inside a branch and much prefer a digital experience.

But, the desire for face to face interaction is far from disappearing. Why? People enjoy the community feel of a credit union and the flexible financial options that they can provide. This brings the pressure for credit unions to pursue digital innovation, especially as more and more consumers desire digital mobile experiences.

Historically, credit unions have maintained a higher customer satisfaction rating than its rising competition in the fintech space. This is mainly due to the trust that is developed throughout the member’s experience, due to an in-person branch and support staff, and lower banking fees. But, as the increased need for a digital experience has risen, this has the potential to shift the customer satisfaction sentiment among credit unions if the institutions do not continue to innovate and provide a favorable experience to their members. The pandemic, among many other factors, also spurred a growing interest of each consumer to fully understand their financial picture whether it be investing in their stock portfolio or saving toward a goal. This increased the adoption of digital financial tools offered by financial institutions and gave consumers another reason to prefer a digital banking experience.

Innovation can give credit unions the power to push back against rising competition. Credit unions are built and grown on having deep connections among their community along with respectable and trustworthy reputations due to their keen focus on member relationships. Additionally, credit unions operate with a smaller team when compared to larger financial institutions around the globe. This allows the firms to be agile and innovate with speed.

In a recent report from Cornerstone Advisors, 81% of credit unions reported that customer satisfaction is their top priority for 2022. But, how can these financial institutions improve their customer experience while also balancing revenue growth and reaching new opportunities? The answer lies within digitalization. First, launching and improving digital services will give credit union members a positive experience as well as increase interactions due to the simplicity and ease of use within their banks application. Next, credit unions can use technology to their advantage in reaching new communities and consumer segments to increase revenue opportunities. Lastly, credit unions can expand their offerings by developing digital products based on their communities needs. This could include an AI chat bot, financial management tools (like Mint), or digital lending.

Innovating and creating digital products from scratch can be a daunting task. It is difficult to decide where to start. It is important to understand the user experience when deciding what to fix or expand on. Evaluating your users can allow you to see where there is friction, as well as where there are opportunities to grow. Our recent post, “signs your user experience needs work” covers what to look for.

Building a custom product fit to your needs can create a desirable digital experience among users and increase usage. Codelitt enjoys helping companies create and build new things. We are obsessed with the problem and using innovation to make products easier for the end-user. If you have a project or idea in mind we’d love to hear from you! Contact us here.