Digital Trends

As we move forward into a more digital economy, technology continues to shape the landscape of the financial services industry. Digital banking has forever changed consumer expectations, and credit unions must adapt their responses accordingly. Technology can support a better, more convenient experience and help financial institutions save on costs as they reallocate funds from branches to tech development.

Here are four digital trends that are currently impacting the banking market and are likely to continue developing in the future.

Trend 1: Personalization and Recommendations from Consumer Data

Data—and the ability to analyze that data—is the key to providing meaningful personalization and making impactful recommendations. With the power of data and AI-driven predictive analytics, credit unions can understand a member’s past behavior and, based on that behavior, reasonably predict what they might do in the future. With machine learning, these personalized recommendations should continue to become more valuable with time.

We see this on sites like Spotify, which recommends music based on what you’ve already listened to, or Stitch Fix, which recommends products based on what you’ve already purchased. In the financial services industry, consumers increasingly demand personalized experiences, especially younger audiences who are willing to share data to receive more relevant messaging.

For credit unions, however, personalization could be even more credible—because their members already recognize them as a trusted partner, with their best interests top of mind. With the power of data and generative AI (GenAI), we are moving toward an even more comprehensive experience, delivering targeted messages and notifications in real time, based on a member’s unique financial situation.

Trend 2: More Robust Help and Search

Another trend impacting financial institutions is improvements to ‘Help’ and ‘Search’ functions in online banking. This is a big area of opportunity for credit unions, giving members the power to solve problems completely online, often quicker and easier than picking up the phone and talking to an agent. Today, the ‘Help’ button can be difficult to find, and the ‘Search’ function often fails to deliver responses within the context of the user’s current activity.

Wells Fargo is addressing this with a segment-leading chatbot named Fargo.  Accountholders access Fargo via a prominently displayed red alert tagged to the Ask Fargo tab at the top of the banking app. This is what could be considered a “phase one”—where the digital assistant is more transactional—helping the cardholder with day-to-day needs. The goal is to have the AI digital assistant be able to offer more consultative advice and information.

Some AI chatbots can take in information, provide contextual responses and then pivot if the consumer asks something else; they can even detect frustration and escalate to human agents if needed. AI technologies can revolutionize ‘Help’ and ‘Search’, leading to more humanized interactions—and a better experience overall.

Trend 3: Financial Education Becoming Central to the Digital Experience

Another top digital trend is financial education, which is increasingly crucial in today’s consumer environment where many are living paycheck to paycheck. Financial education can help consumers better understand their financial situation and equip them with the necessary skills to improve it.

As mentioned in the first trend, credit unions can use data and GenAI to help their members—providing education that lets them “see” their financial life and how they can make it better. Visualization tools can clearly illustrate a member’s current financial situation, track their progress, and show them the steps needed to improve, while AI chatbots can simplify complex financial concepts into digestible, conversational formats.

For example, are there better solutions for members to use to help them reach their goals? If a member is using a high interest credit card and carrying a balance, they could be prompted with “did you know shifting a balance to a lower rate card would save you $200/month” notification.

Trend 4: Constantly Analyze and Improve the User Experience

Our fourth trend is the global drive to improve the consumer experience. In the financial world, we’re seeing constant updates aimed at removing barriers to accessing and using members’ accounts. For example, a key reason many accountholders use their banking app is to check their balance, so how can we make that easier?

Capital One uses widgets to display an account’s balance before the user even logs in—they just pick up their phone, unlock it and see the widget with their account balance front and center. Bank of America has made it possible for Apple device users to check their account balances by speaking to Siri. This capability integrates Bank of America more broadly into the iOS ecosystem and the device’s voice channel, creating convenience that drives Bank of America’s position to top of wallet.

Conclusion: Set a Course for Your Own Digital Future

Overall, digital trends in the financial industry are moving toward removing friction in the consumer experience. Take the time to dig into understanding your member’s digital experience today, then identify ways to improve. Credit unions must keep up with ever-evolving user expectations to remain competitive.

As a senior strategic consultant with Advisors Plus, Brian Day helps clients understand industry trends and product solutions, with a focus on digital solutions. He has held various roles throughout his career, focusing on innovation, product development, and client consulting. Prior to working in financial services, Brian held product support roles focused on market analysis, market research and forecasting for organizations in the manufacturing sector. He earned a bachelor’s degree from the University of Northern Iowa.