Purposeful channel managers evaluate and enhance members’ experience and their credit unions’ ROI.
With all the emphasis on member experience, few views offer a better understanding of how members interact with their credit unions than channel management.
Effective channel management delves into members’ preferences for connecting with the credit union—whether they stop by, call in or sign on—and how the objective of their interactions guides their choices. It spans traditional personal service in branches and emerging mobile delivery and payment options. And it offers demographic and geographic market insights and intersects with sales, marketing and product/service development and delivery.
Managing member service delivery begins with turning business line owners into channel experts. This business intelligence will guide the objectives that define how account access, deposit and loan processes, and consultation with knowledgeable professionals are provided on a channel-by-channel basis.
Members gravitate to one channel or another based on age, life and work commitments, affinity for technology and/or personal service, financial acumen and, perhaps most importantly, the purpose of each interaction. Most aren’t monogamous to a single channel and appreciate the option to connect as they see fit. For all the growth in digital delivery, why do members still take the time to come to a branch? Just because they can apply for a mortgage or open a new account from their mobile phones doesn’t mean all members will do so.
Channel owners are charged with recognizing those preferences and translating them into optimal service delivery models that will grow existing relationships, bring in new business through next-best-product recommendations and attract new members. Improving service delivery encompasses both member-facing and back-office functionality to support members in making important financial decisions.
Toward that end, channel owners need to be skilled in managing change and risk, in translating business objectives into key performance indicators and ROI targets, and in collaborating with colleagues across departments and even other channels. Digital channel owners, for example, need to recognize that the journey of members who primarily rely on mobile and online access will also encompass the contact center for occasional support and inquiries.
Best Practices for Channel Owners
An emphasis on channel management acknowledges how much members’ experience connecting with their financial service providers influences their affinity for their credit unions. Channel owners must be attuned to the business models inside and outside of the financial services sector that are shaping members’ expectations. What can credit unions learn from Amazon’s sophisticated model to build business with product recommendations based on customers’ prior purchases? Why do users love the USAA and Capital One mobile apps? And how can credit unions expand opportunities to build member relationships across remote channels with tech-savvy consumers?
To answer those questions, digital channel owners must have a clear view of which members are using online and mobile access and what they’re doing when they sign in. If 75% of a credit union’s members are “digital users,” what does that mean? Can they do everything they expect to be able to do via these channels or do they encounter roadblocks? How well does the member experience from channel to channel represent your brand?
The data to evaluate members’ channel use and satisfaction with their interactions is out there. Applying the following best practices can help channel owners gather and apply crucial data to establish baselines on which to set ambitious but realistic goals for loan, deposit and member growth and identify improvements in delivery needed to get there.
Know Members’ Channel Preferences
Channel owners should bring together information from across core, lending, marketing and other systems to fill in the demographic and geographic details about members who gravitate to their channels. Then they can dig a little deeper into often untapped sources, like checking transactions. Given their many options for payments, for example, which members are using Apple Pay, Google Pay, PayPal and Zelle? And are their credit unions’ debit cards top of wallet for those transactions and for Amazon and other online purchases?
Identify Opportunities by Channel
As noted previously, few members stick to a single channel exclusively. The “regulars” at a neighborhood branch may phone the contact center occasionally and sign in online to check their account access. And the member who does everything on her credit union’s mobile app may call the mortgage hotline to talk through the best option for her first home loan. The idea that every product and service must be available on every channel may be a bit overblown.
Instead, channel owners should identify service expectations for what’s top of market among members with clear preferences for their entry points and aim to deliver the best possible experience in providing those products for those members and others like them. For example, a checking account for members who favor remote channels might pay dividends to account holders who sign up for e-statements, download the mobile app, direct-deposit their paychecks, use remote deposit capture and bill-pay, and make at least 10 debit transactions in stores and online monthly. Recognizing channel preferences in product design can help win over existing and new members.
Do Deep Competitive Analyses
Branch channel owners have a clear line of sight on their competitors—the credit unions, community banks and big banks with a presence in the communities they serve.
The field is more robust on the digital front. National banks like Bank of America and Wells Fargo are trumpeting sophisticated mobile access. Payment providers like PayPal, Zelle and Square Cash—even Facebook is getting into the payments space—seek to varying degrees to supplant traditional financial services providers, or at least to disintermediate member relationships. Digital channel owners need to investigate the experience these competitors are providing, learn why they appeal to consumers and monitor which services are gaining traction with consumers.
For example, on the P2P payment front, the upstart Zelle, which launched in 2017, outpaced the PayPal-owned Venmo in the second quarter of 2019, with total payment volume of $44 billion compared to $24 billion. Early Warning Services, the network that has enrolled 500 banks and credit unions to offer Zelle to their customers and members, reported that its year-over-year transaction volume rose 71% for the quarter. Those trends represent key market intelligence for credit union channel owners.
Financial service delivery is in constant flux, driven by steady technological advances. Significant opportunities to improve digital delivery may be ahead as the Federal Reserve develops its FedNow Service, a nationwide infrastructure designed to provide 24/7 real-time payment and settlement services, with early estimates for availability in 2023 or 2024.
The Fed’s announcement of this new service is just one more piece of the puzzle for channel owners formulating a digital delivery strategy. Should the credit union introduce a P2P service like Zelle for its members or instead seek to promote the use of its credit and debit cards when members sign up for those services on their own? With the FedNow Service in development, some credit unions may opt to sit tight and see how consumer adoption of these payment services unfolds.
Radiate the Brand Across Channels
Each channel must deliver on members’ expectations in a way that’s consistent with the credit union’s vision, mission and brand essence. When members apply for a loan online or via the mobile app and are met with no response, that service failure clearly shows that the credit union’s core values don’t extend to the digital channel—and the organization will likely be blasted on social media for poor service. Consistent delivery on the brand promise is essential.
Lead Effective Change Management
The channel owner’s job is to marshal the people, processes and technology necessary to execute. If the online loan application process delivers a great member experience but it takes three days to process the application and return a decision, the net sum is a missed opportunity. Investing in digital channel technology is money down the drain if back-office lending and other systems can’t keep pace.
Channel owners need to forge effective partnerships across the organization to build business. In the area of business intelligence, for example, the digital channel owner must be able to work with IT to pull together and analyze pertinent data into an actionable form so he/she can then take it to marketing to help grow the channel through enhanced service delivery.
Benchmark for Progress
A commitment to measuring progress is a crucial aspect of ensuring purposeful execution of best practices. The better channel owners understand and deliver on the preferences and needs of current members who rely on those service outlets, the more effective the credit union will be at connecting with new members with similar demographic, psychographic and geographic profiles.
Channel owners can work with their colleagues in marketing to pinpoint key performance indicators that measure the extent to which their channel delivers a high-quality experience to existing members and conveys value to prospective members.
KPIs should provide ambitious but achievable goalposts for advancing member connections through the channels of their choice, as demonstrated by two examples: increasing the use of remote deposit capture and positioning the credit union’s debit card as members’ primary payment vehicle. RDC simultaneously engages members and improves operational efficiency, so a channel owner could set a goal of posting a 15% increase in the number of checks deposited via mobile app by mid-2020. On the debit card front, the goal could be that 70% of members with checking accounts will connect their credit union debit cards as their primary payment vehicle for Apple Pay or Samsung Pay.
Broader benchmarks involve developing a return on investment based on channel delivery, the primary products and services members access through each channel, and channel-specific marketing. In partnership with finance specialists, channel owners can set their sights on ROIs that demonstrate how their channels support the organization’s strategic imperatives.
At the same time, these metrics help underscore the importance of channel management in delivering an exceptional experience that lives up to current members’ expectations and engages new members, keeps pace with market advances and delivers on the brand promise. cues icon
Amanda Swanson is a senior consultant with CUES Supplier member and strategic provider Cornerstone Advisors, Scottsdale, Arizona.