Every credit union feels the pinch of the fintech industry whether it’s the little players like Acorn or the behemoths such as Amazon.

Strategy consultant Lauralee Hites outlined the challenges fintech present to credit unions and the opportunities the competitive landscape offers during a breakout session at the recent  CUNA Technology Council and CUNA Operations and Member Experience Council Conference.

More than 2,000 fintech firms entered the market between 2008 and 2018, according to a Deloitte study. While relatively few of those companies have gained market share, a few have captured consumers’ attention with unique products and value propositions.

“Let’s not let it be death by a thousand cuts,” Hites says. “The conversation now is what’s driving people to do this.”

Successful fintech products share a few traits:

• Ease of use. Virtually all apps can be set up and funded within five minutes, Hites says. While setting up her Acorn account was simple, when Hites had trouble with her account, she couldn’t find resolution after several phone calls. “I know credit unions take pride in solving those kinds of problems in one phone call,” she says.
• Less customer friction. Amazon’s model has been literally built around this concept, Hites says, starting with the one-click concept. “They continually modeled out the customer experience and removed anything that might cause customer friction,” she says.
• Visible and incremental improvements to financial health. The most successful apps have added value to the customer experience. Hites points out that there is a big difference between tools that monitor one’s financial health and those that optimize or improve a consumer’s financial performance. “We have to build the tools that help people achieve their life goals,” Hites says. “We have to present that visually as well. Research shows that visualization helps us achieve our goals.”

Hites offers several questions credit unions should ask themselves when designing new products and services:

• Do our products reflect member needs beyond “expected services,” such as checking, savings, and loans?
• Do we offer what members want? Incremental growth, not just savings?
• Do our products use member-friendly language? Does the name easily convey what the product is?
• How can we help our members improve their financial health? Are we transaction oriented or relationship oriented?
• How do we ensure all the tools we employ are seamless for the member experience?

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