Why do business with a credit union? NerdWallet and U.S. News proclaim that credit unions deliver superior service and interest rates.
Unfortunately, younger generations define winning service as leading technology. But credit unions cannot compete with large banks that have multibillion-dollar technology budgets. It is no wonder that the University of Michigan Consumer Satisfaction Index has ranked banks ahead of credit unions for the last two years. Moreover, historically low interest rates prevent credit unions from offering a compellingly differentiated rate.
With their competitive differentiators neutralized, credit unions face an existential crisis. But they need not panic. There is a winning strategy that builds upon credit unions’ strength in deeper relationships and better service.
That strategy requires credit unions to execute their mission of supporting member financial success, which credit unions are better positioned to do than banks. Not-for-profit credit unions exist to serve their members while banks face unrelenting profit pressure.
Credit unions can support member financial goal attainment without busting their budgets by leveraging the latest technologies, a member segmentation, and the unique capabilities of each channel.
The environment has never been more threatening to credit unions. The good news is that they can use their strategic disadvantage as a case for action to move to a more defensible strategy—one where the credit unions use AI solutions to deliver the advice people need to achieve their long-term financial goals.
EVAN SIEGEL is vice president of financial services AI at eGain Corporation.