Consumers are more concerned about their financial well-being than ever. In the face of high inflation and fears of a recession, they’re doubling down on saving money and time, and are looking for financial institutions that can help them do both.
Credit unions are in a prime position to deliver. But to succeed, they need to get inside the heads of today’s banking customers and understand what they really want and need.
As revealed by Anatomy of a Banking Customer, a recent study conducted by Vericast, every consumer is unique. But they share a few things in common.
Across generations, consumers are rethinking their financial goals to accommodate the realities of a post-pandemic world. And they want a personalized banking experience, complete with digital services that make life easier, and advice they can use to get and keep their finances in order.
How can credit unions serve this up? Here are six steps:
1. Get personal
When it comes to their banking experience, 70% of consumers rate personalization as “highly important.” They’re open to receiving promotions via direct mail, email, text messages, and social media as long as they’re targeted to their needs and in line with their financial goals.
Among the offers they’re most interested in as they explore ways to trim expenses and save? Those related to saving and checking account deposits and credit/debit cards.
2. Reward loyalty
Consumers are more likely to engage with brands that reward their loyalty, and credit unions should take heed. It’s easier than ever for members to switch banking providers, often in less than five minutes using nothing more than a mobile app.
In fact, 98% of the two youngest generations have done so in the past two years. But with the right motivations, they’ll stick around.
More than 70% of consumers say incentives for saving and checking account deposits would entice them to stay with their current financial institution, and 33% would do the same given incentives for making purchases using debit or credit cards. And don’t underestimate the potential to attract new members through value-based promotions.
3. Show them the money
In light of the current economic environment, 70% of consumers are exploring ways to cut expenses. They see the elimination or reduction of fees and recurring charges as a way to do so.
More than 60% are also amping up their efforts to save. They’re on the hunt for vehicles that provide the highest rates, and they’re willing to change providers to get them.
Some, for instance, are moving funds from traditional savings and checking accounts to higher-yield money market accounts and certificates of deposit, often outside their current institutions.
4. Keep it simple
The pandemic accelerated adoption of all things digital, including banking, and there’s no going back. More than 70% of consumers say they conduct personal banking primarily through their financial institution’s app or website because it’s convenient and easy.
And they want to see their capabilities enhanced or expanded to include things like 24/7 support (phone, chat, and/or virtual assistant), person-to-person (P2P) payment services, card controls (freeze/unfreeze, report missing/stolen, and travel alerts), and credit score checks to make things even simpler.
That’s not to say that consumers have given up on branches: 56% still visit them. But they want better hours and locations.
5. Offer advice
Studies indicate that 44% of people get their financial advice from friends or family. And younger generations are even turning to social media, including TikTok and YouTube.
But as Anatomy of a Banking Customer makes clear, they would like to receive it from their financial institutions. More than half of consumers, regardless of age, want help with saving strategies and budgeting, in addition to raising or understanding their credit scores, consolidating debt, and planning for retirement.
6. Drive with data
Financial well-being for all has never been more important. And the time has never been better for credit unions to capitalize on the opportunity to help consumers achieve it.
In combining market insights that are readily available with the rich and extensive customer data they have at their fingertips and tools they can use to analyze it, credit unions can gain a comprehensive and actionable view into what customers really want and exceed their expectations in delivering it.
1. Empathize. Consumers trust brands that have their best interests in focus. Show how you care about what matter most to them.
2. Showcase saving. Customers want to know what's in it for them. Highlight how you can help them drive savings and gains in hard-dollar terms.
3. Rethink fees. Consumers want to cut expenses, and they’re eyeing fees as a way to do it. Look at your schedule and consider removing or reducing fees where you can.
4. Revamp rewards. Consumers want to be rewarded for their loyalty. Make sure your programs are in line with consumers’ expectations and your competition.
Credit Union Magazine’s Spring 2023 issue features the 2023 Credit Union Heroes and examines CUNA-League advocacy priorities, board leadership, the impact of financial well-being efforts, fee-related compliance issues, predictions for the year ahead, and more.
