With their flexibility and focus on innovation, fintech firms continue to pose a competitive threat to credit unions, says John Waupsh, author of “Bankruption” and chief innovation officer at Kasasa, a CUNA Strategic Services alliance provider.
He spoke at Disruption 17 by CU Water Cooler Wednesday in Madison, Wis., about how to outmaneuver upstarts in the financial services world.
To do so, Waupsh suggests five areas to focus on:
Successful institutions today have a target audience and are constantly updating their data around that target audience, Waupsh says.
Likewise, credit unions must decide who their target audience is and where their growth will come from.
Waupsh says credit unions offer at least 40 products. “It’s impossible to be the best in the world at 40 things,” he says. “Your fintech competitors have one or two products. They can be the best. Think about your target audience and their actual needs.”
This approach also makes marketing more cost efficient and effective, and gives employees—especially front-line staff—with a more focused approach to service delivery.
3. Service delivery
“It’s all about the member journey,” Waupsh says. “It’s understanding what members are trying to do and helping them achieve it. That means asking your target audience, ‘Does this make sense to you?’ If it doesn’t, you have to find a way around it.”
Marketing is about knowing the member, and that means more than harvesting data from your core system, Waupsh says.
“You need to augment that data with other data streams,” he says. “When you take that data and merge it with your own data, your able to do some magical things.”
For example, 70% of consumers start shopping for auto loans at some place other than their primary financial institution, Waupsh says. Chances are that place is Google.
For that reason, credit unions need to maintain one-one-one conversations with their members, augmented with data.
5. Double binds
Waupsh also calls this, “Damned if you do, damned if you don’t.”
Sometimes the demands of today’s marketplace interfere with the old way of doing things, Waupsh concedes.
Predictive analytics doesn’t seem to jive with relationship lending, and keeping it local seems to run counter to a digital community, he says.
Waupsh suggests taking “baby steps,” or embracing incremental change.
“Don’t worry when someone says, ‘We’ve always done it this way,’” he says. “That’s right, you have always done it this way: You’ve always done what’s best for your members.”