As chief strategy officer for CO-OP Financial Services, Dean Michaels examines the credit unions’ competitive environment, challenges they face, and how CO-OP can help credit unions thrive. He offers insights into the challenges and opportunities facing credit unions in the months ahead.
Dean Michaels: Obviously, a lot happened in 2020 that will inform how we move forward. While people tend to think we need dramatic and rapid change, COVID-19 has reinforced and accelerated much of what we were already seeing.
We’ve worked with credit unions on the shift to all things digital from a consumer perspective. COVID-19 has accelerated that shift, and that’s the big challenge for credit unions going forward.
Consumers’ expectations from a digital perspective continue to rise. These expectations aren’t formed by other financial institutions; even big banks. They’re formed by big digital technology companies, whether it's Apple, Amazon, or PayPal.
Customer satisfaction surveys show declines for credit unions, and a lot of that has to do with members’ expectations for digital interactions. That’s a huge challenge for credit unions, and it’s a huge challenge and opportunity for CO-OP to help credit unions reverse that trend.
That’s why we’re investing so much in helping credit unions around the member experience.
A: We’ve been talking to credit unions about this for a few years and, again, COVID-19 is accelerating this. Traditional credit union strengths—low rates and their people-helping-people philosophy—are still strengths. They are differentiators, but not enough alone to continue to win.
Credit unions need to deliver more value to members, particularly around what they do every day. Credit unions have been focused on big life events, such as buying a home or a car. Those are great but they're fairly infrequent. But members use payments every day.
Whether they’re swiping, clicking, or tapping, members are moving money every day. So being able to meet members’ needs in payments, particularly digital payments, is critical.
This is how we help credit unions. Credit unions can help their members if they’re taking advantage of credit union-owned technology.
That’s what has informed our product roadmap, what we’ve delivered the last few years, and what we’ll deliver this year.
A: We organize our initiatives around two big themes: Improving our solutions so they’re more consumable for credit unions and enhancing member-facing solutions.
This year, we’ll add enhanced analytics, member segmentation capability, and campaign management.
On the member-facing side, everything is around supporting contactless payments. There’s such demand for this with the pandemic and peoples’ desire to social distance and not touch anything.
Also, people expect everything to be instantaneous. They don’t want to wait for a card in the mail. So we’re offering digital issuance and digital wallets.
We’re also launching our new Lifestyle Loyalty rewards solution. People want to be recognized for their loyalty.
And while most people think about card-based loyalty, we’ll incorporate ways to reward members for the entirety of their relationship with the credit union, whether it’s deposits or a mortgage. That’s something credit unions have been asking for.
We’re not thinking about these initiatives as one and done, but as generational technology rollouts.
A: COVID-19 created a flashpoint for members, and wreaked havoc on many members’ financial lives. This brought to the forefront that credit unions exist to help members around their financial well-being.
I get excited about how this reinforces why credit unions exist and why they’re the right financial institution for members.
A: No resolutions, but I’m excited to get back to all the things we love, like travel.
There’s a lot of pent-up energy waiting to be released. What COVID-19 has highlighted, in the absence of doing what I love, is just how important those things are.
CO-OP Financial Services is a CUNA associate business member at the elite level.