Challenge 2025

The Digitization of the Global Credit Union System

 

A New Decade, A New Goal

In 2014, World Council of Credit Unions set a goal of reaching 260 million credit union members worldwide by 2020.

Through a concentrated worldwide effort, credit unions were able to reach our "Vision 2020" goal by 2017. But that growth was not even across all countries or among all credit unions. The credit unions that grew were those that offered core services via online and mobile channels. That is why we are now addressing how we increase membership going forward—through the digitization of the global credit union system by 2025.

Measuring Global Digitization

World Council will measure the digitization of credit unions in four key areas and report annually on the progress being made toward Challenge 2025.

Digital Channels

Offering members core digital transaction services such as online and mobile banking, online payments and online loan processing.

Digital Payments

Connecting your credit union to a shared payments system that allows for mobile payments and integrated with a national payments system.

Data Analytics

Employing data analytics to determine additional service offerings to members, and helping to identify those that need financial literacy or counseling services.

Cybersecurity

Implementation of a cybersecurity system that complies with national regulations to protect members' consumer data from digital attacks and intrusions.

 

Follow Our Progress, Tell Us About Yours

Track the latest developments in digitization by subscribing to our Challenge 2025 Blog. You can also send us updates on how your credit union or credit union system is striving to help us meet Challenge 2025 at communications@woccu.org

The Importance Of Digital Member Engagement–Now, More Than Ever

The global pandemic has touched virtually every aspect of consumers’ lives, prompting them to evaluate which service relationships truly provide value—and which don’t—in their transition to the “new normal.”

Credit unions that deliver an experience that meets the changing needs of members in the age of social distancing will be rewarded with new business and greater loyalty. Those that don’t will struggle to remain competitive.

Shift to Digital—Now

Social distancing has caused many consumers to trade branch visits for digital interactions. Indeed, the digital channel is useful and efficient, but only if it is user-friendly and meets member needs. Members who have a disappointing digital experience may not have the option to visit a branch to get assistance, leaving them feeling frustrated and stuck—and that’s bad news.

There’s certainly room for improvement, as only 52% of consumers report their institution was “very effective” in meeting their online or mobile banking needs. Mid-size institutions particularly have more room to grow, with significantly lower satisfaction rates than larger institutions.

Members who have a poor digital experience during a crisis are likely to sour on that brand—and be more receptive to offers from competitors.

Conversely, credit unions that invest in optimizing and expanding digital options to deliver the best experience will be positioned to attract and retain members. In fact, with interest rates at record lows, digital experience, not cost, will become a major differentiator for loan acquisition. That means your digital experience is smooth, seamless, efficient and, of course, useful.

A slick digital interface is of no use if it doesn’t provide the functionality members are looking for. Providers should evaluate their digital channels and consider making the following modifications:

  • Adjust remote deposit dollar limits to make it easier to deposit checks remotely
  • Offer convenient loan fund disbursement options
  • Use e-signatures and touchless loans to facilitate remote document completion
  • Offer a digital chat feature to quickly resolve previously tedious issues like duplicate charges

Actionable Strategies for Serving Members Now

Of course, there’s a fine line between being seen as helpful and being viewed as opportunistic, so it’s vital credit unions show they have their members’ best interest in mind.

Some 34% of Americans only have enough savings to cover three months of expenses, according to this report. As the economy begins to reopen, consumers may need help bridging paychecks or managing bills. Be sure to market a variety of tools, such as skip-a-payment and missed payment forgiveness programs, to ease members’ near-term financial needs.

Offer special, unsecured personal loans at a low rate. These flexible loans are attractive to borrowers to help cover expenses that arise from an unexpected change in their financial situations.

Consider reaching out to your most vulnerable borrowers. Have a conversation with them about how they have been affected and their financial challenges. Let them know you’re available to help navigate changes in their financial situation and determine their eligibility for alternative repayment or other loan relief options that might work better for them. Auto refinancing is a potential tool for this, as the rate differential is minimal. This means consumers can lower monthly payments by lengthening the loan term without experiencing a significant increase in the overall amount paid.

Prepare for the New Future

As credit unions focus on improving digital experience and serving member needs in the realities presented by the pandemic, it’s also important they position themselves for growth during changing economic conditions. This means asking questions like:

  • Are there particular member profiles we should acquire that will help us weather similar crises in the future?
  • Are we prepared for business in the “new normal?” What will our members need? What can we offer them and how can we grow the relationship as they reorganize their finances?
  • How can we grow new deposits and help members achieve savings goals and help them be better prepared for a future crisis?

The global pandemic will not only change how people view personal finances, but also how financial service providers respond to consumers’ urgent needs. The digital experience you provide and support today will determine how you retain members, deepen relationships and acquire new members in the future.

This post was written by Stephenie Williams for Credit Union Executives Society (CUES), a World Council associate member. She is executive director/acquisition solutions at CUES Supplier member Harland Clarke.