Text Time: Why Credit Unions Need to Facilitate Two-Way Texting

hands holding up paper texting bubbles
Contributing Writer

12 minutes

New channel suits members’ preferences to communicate on the go.

For credit unions that pride themselves on personal service, here’s an update: Facilitating two-way texting with members may now be the communication channel most aligned with that aim.

Why text? Because no one answers the phone anymore, and connecting via email is becoming increasingly hit and miss. “It’s pretty difficult to finish a loan application or follow up for customer service when you can only reach members by phone 5% of the time,” says Kenneth Burke, director of marketing with Text Request, Chattanooga, Tennessee. 

In comparison, 95% of texts are read within the first three minutes, and the average response time is about 90 seconds, according to the website Business2Communit. Text response rates can exceed 50%, depending on the call to action, which means “you can save hours every day just following up with members more efficiently through texts,” says Burke.

Joining the Conversation

Texting is increasingly the preferred mode of remote conversation among individuals and groups of family and friends, and now those preferences are carrying over into business communication, notes Joe Winn of Credit Union Geek, Plantation, Florida. 

As a sign of that shift, Apple introduced functionality in its iOS operating system last year to support Business Chat, which allows iPhone users to connect easily with participating companies, including big names like Marriott, Home Depot and Lowe’s, Sprint and T-Mobile, Wells Fargo and Quicken Loans. 

According to Apple’s description, a message option shows up when users search for participating businesses on the iOS Maps app or Safari, and consumers can begin the conversation without sharing their names or phone numbers. They can also take the next step and place orders, make reservations and pay for goods and services through the secure chat channel—and then they can close the conversation by simply deleting the thread.

There are also a variety of hardware-agnostic options available to credit unions looking to connect with members via texting, and Winn suggests there is good reason to move in that direction: “Text messages get looked at, they get seen, and they generally get acted upon. That fits with the credit union’s goal to remain top-of-mind with members and to ensure that their products and services get used.”

Michael Hartsog, director of mid-market sales for Quiq, Bozeman, Montana, agrees. “Members are already texting with businesses in other industries, like retail, hospitality and airlines. It’s becoming the channel of choice,” he notes. “Members are connected and active, not sitting in front of a computer, so texting allows them to communicate anytime, anywhere.” 

Texting is second nature for most millennials and members of Gen Z, but older consumers have embraced this outlet as well. “It’s a channel in demand, and it’s an effective channel. You can do a lot with simple texting and even more with rich text messaging,” Hartsog says. “Google and Apple support rich messaging,” which supports multimedia and such features as read receipts. Rich messaging also can help bridge the gap between members’ messaging experience and more mature digital channels like online banking.

Supplanting Online Chats

Anyone who’s participated in an online chat or phone inquiry knows that these conversations can proceed slowly—and patience can run out quickly when you’re sitting at a laptop or listening to an endlessly looping hold message. Texting, on the other hand, allows members to get on with their daily activities and continue the conversation while they’re on the go. 

“Call centers are being inundated with a much higher call volume than ever before, so we’re seeing with this functionality the ability for people to get the answers they need more quickly and efficiently,” says Landry Yoder, vice president at Shastic, Berkeley, California.

Since $157 million, 11,400-member Spokane Federal Credit Union, Spokane, Washington, introduced two-way texting last year in place of an online chat function, two dedicated phone center employees have fielded 800 to 2,000 texts monthly, including 217 exchanges in a single day last September. 

Spokane FCU partnered with Shastic to offer the interactive text messaging platform, Elle. “Our members can ask questions about loans, payments, transfers and more, directly from their mobile devices, and they get reliable, real-time answers from real people,” says Susan Cerutti-Jensen, marketing director for the CU. “They can even submit loan documentation.”

Texting with members “has really been a win for us,” she says. “People are just a little reluctant to talk by phone, but they see the chat button as an easy way to ask a quick question. It gives us the appearance of being always available, and this service is a differentiator in the market.”

Credit unions can start text conversations as well—to follow up with members to complete an application, for example. “You often start an application and you give your basic info, but then you have to reconnect two or three times to confirm it or offer additional information,” Burke notes. “That’s a lot of touchpoints, and those touchpoints happen during the typical 9 to 5 workday, so it’s often difficult for consumers to take a phone call. But they can answer a text pretty quickly, so it gives credit unions an easy way to speed up the process and complete the paperwork.”

Michael Hartsog
Director of Mid-Market Sales
It’s about offering members the choice and letting them decide how they want to interact with the brand.

Follow-up and Application Flow

$1.7 billion Community First Credit Union of Florida, based in Jacksonville with 135,000 members, introduced texting in partnership with Quiq in August 2018 by incorporating a custom question into its online membership and consumer loan applications, allowing members to select texting as an option for follow-up communication.

Previously, when Community First CU employees followed up via phone and email on online applications, they got through to members only 39% of the time, but with texting, the response rate has ranged from 60% to more than 80%, says Digital Sales Manager Susan Grossman. 

“As for the adoption rate, we measured percentages in the 90s, which shows texting is preferred over calling or emailing,” Grossman notes. “In many instances, we would see responses from applicants just minutes after texting them.”

The credit union’s standard is to text loan application decisions with a request that members call for more information or the next steps in the process. “Having complex discussions around loans seemed more appropriate over the phone,” she explains. “However, we’re able to have more dialog through Quiq with membership applicants and personalize the interaction we have with them. We’re able to discuss the decision, next steps and even send reminders to applicants with outstanding tasks. This makes the joining process much faster.” 

Texting can be integrated into a variety of systems: automated loan application and processing systems, online and mobile banking, and core and customer relationship management databases. “The conversation about integration always comes up: What do you integrate with and how do you integrate?” Hartsog notes. “There may be a crawl-walk-run mentality, to start slow and build in more robust workflows and integration later.

“It’s very tailored to the needs and strategies of each organization. Every conversation we have with credit unions is unique,” he adds. “Quiq is highly configurable. They can bite off whatever functionality they want at whatever speed.”

Texting as a communication medium may be best introduced as a way to connect with members over specific needs, such as completing a membership or loan application, Yoder suggests. As evidenced above, a perennial business problem texting can help address is online application abandonment—by inviting members to text questions or request assistance in completing the process.

Shastic’s Elle platform can be integrated with application and mobile systems, notes Yoder. In March, Shastic announced a partnership with the loan origination system provider MeridianLink, Costa Mesa, California, to integrate text messaging and real-time tracking into the membership and loan application process. Credit unions can now track the progress on each application and deliver text messages to members whose applications seem to have stalled.

There’s a direct correlation between the amount of time spent on an application and abandonment rates, Yoder says. “Sometimes life gets in the way, and people have to attend to other things, but if they’re inside the application for a long period of time, you can now see this and take action by sending a friendly message.”

$221 million Extra Credit Union, based in Warren, Michigan, with 21,000 members, launched texting through provider Text Request last year, primarily as a means to schedule loan closings and remind members what to bring to those appointments, says Ruthann Varosi, marketing manager.

“Our member service team has had incredible success in scheduling appointments, and members show up to loan closings prepared and with the proper documentation, all of which allows us to help members faster,” Varosi says. “While some members still like the traditional phone call approach, using text messaging means we aren’t playing phone tag or waiting for email responses. Text message responses tend to come back almost instantaneously, so the process moves much faster.”

The best measure of the popularity of texting is that less than 5% of members opt out of this channel, she adds. “Our members have embraced messaging because it is easy and fast.”

Some credit unions are also using the text channel to send loan payment reminders to members who opt in for these notifications. A common reason that members miss a payment is simply that they’ve forgotten, so a proactive text reminder heads off this issue, Burke suggests. The message can include a website link with an invitation to “log in online to pay your bill.”

Member migration from phone or email to texting tends to happen fairly quickly, he adds. “When people see that ‘text us your question’ prompt on the website, they start using it. And then they have a good experience, and they’ll use it again. If they need an in-depth conversation, they’ll call in, but for those little service questions, they’ll just keep texting.”

The text channel “allows members to communicate with their credit union at whatever their speed of life is on that day,” Hartsog says. “If it’s urgent, they can go back and forth quickly. Or they can text and request an update on their loan. They might get a message from a loan officer an hour later and reply an hour and a half after that with another question.”

Credit unions can set their own service-level standards for the speed of responding to members’ texts, with the understanding that expectations vary with the type of inquiry. For example, members texting for an update on their mortgage loan processing probably would be happy to get a response within a few hours, Hartsog suggests. The Quiq platform monitors those service levels and keeps member service staff and supervisors informed about how long a message has been sitting in a queue. 

Joe Winn
Credit Union Geek
Compliance and Security Concerns” section): “Text messages get looked at, they get seen, and they generally get acted upon. That fits with the credit union’s goal to remain top-of-mind with members and to ensure that their products and services get used.

Compliance and Security Concerns

Texting can be an effective marketing medium as well—as long as credit unions have processes in place to obtain members’ permission to send that kind of message. Common examples are members opting in to receive updates about changing CD or loan rates or opportunities to obtain benefits through referral programs.

The Telephone Consumer Protection Act requires an opt-in by members to receive outbound communications from their credit union. Members can initiate the text conversations, but “our understanding of the TCPA requirements is that a member texting the credit union doesn’t necessarily opt them in to receive outbound messages,” Hartsog says. “The credit union must obtain expressed consent.”

That opt-in process can be integrated into initial interactions with members as they supply their cellphone number and agree to receive texts from the credit union. 

A credit union’s outbound text communications could be one-to-one, as in status checks on loan processing, or one-to-many, as in updates on CD rates for members who have opted in to receive those alerts. In the case of the latter, “our recommendation would be to start slowly and allow members to open themselves to additional interactions,” Hartsog says. “Credit unions are historically—and by nature—conservative, so they’re not likely to push the envelope on spamming members with texts.”

Marketing is typically the last department to begin using the text channel, given the opt-in requirements, he adds. It’s much easier for new member accounts and lending to gain adoption for member-specific exchanges.

To support compliance, “every text in or out of Text Request is permanently recorded, and account administrators have access to all messages,” Burke says. The system also has built-in opt-out alert functionality to notify all employees sending or responding to texts about the member’s selected communication preferences.

Locking down the text channel to keep intruders out is another vital concern credit unions must address when offering this option to members by ensuring that providers meet security standards. For example, Yoder says Shastic offers several security measures, including using HTTPS for communications sessions (like when you see HTTPS in your browser when visiting or logging in to a secure website), SSL encryption for authentication and data transmission, two-factor authentication and encrypted data storage.

Likewise, “members can feel comfortable submitting sensitive info through Text Request,” such as account and driver’s license numbers, Burke says. “We’ve got beefy security.”

Credit unions should note that while providers like Text Request and Shastic must take steps to secure stored messages and the member information they contain, outgoing messages via wireless carriers to members’ devices have the same protection as any other SMS messages—which may vary by carrier and members’ adherence to security recommendations.

What Members Want

As credit unions consider how to move from informational inquiries to explore the potential of texting for marketing and other communication, “they need to figure out what members want from the channel,” Winn says. “You can do market research and data analytics, but at the end of the day, asking members what they want is valuable, too.”

Toward that end, Winn suggests convening a test audience of employees and avid members willing to receive and provide feedback about the content, tone and frequency of text marketing messages. 

“If you’re starting with your staff, it has to be a culture where they feel empowered to share their honest opinions, to say ‘I love this’ or ‘I hate this’ or ‘What about this?’ without repercussions,” he adds. 

For credit unions committed to omnichannel account access, texting provides one more option for communication. “It’s up to members whether they want to text, chat by phone or start an online chat,” Hartsog says. “It’s about offering members the choice and letting them decide how they want to interact with the brand.”

With 270 million cellphones in the United States, 98% of which are SMS-enabled, “texting is becoming more preferred than voice communications,” he adds. “And the longer credit unions wait, the further behind they will be in delivering on member expectations.”  cues icon

Karen Bankston is a long-time contributor to Credit Union Management and writes about membership growth, operations, technology and governance. She is the proprietor of Precision Prose, Eugene, Oregon.

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