About 20 years ago, Michael Porter at Harvard University presented ground-breaking research on competitive advantage. One of his prophetic ideas was that customers want a sense of control over transactions. He called it “customer agency.”
Fast forward to 2010, and the Internet has made self-service the equivalent of good service. Now a majority of our transactions are, or should be, performed on remote channels.
The next phase is channel normalization—making the consumer experience as similar as possible across all delivery channels. One way credit unions can do this is by providing preference tools that allow members to specify the experiences they want on each channel.
Credit unions offering this service usually allow it through their online portals. Members, for example, can select from various options for online banking, mobile banking, ATMs, and phone banking. In fact, the preferences can even include their desired experiences with tellers.
The move to channel normalization and preference engines suggests you should put your delivery channels under one team instead of in silos. The retail industry already has learned this. Companies that treated online sales as a separate silo from in-store sales missed significant opportunities to create unique customer experiences.
Next-generation online banking
Your members are stretched in all directions—trying to make ends meet, not having enough time, and lacking sufficient financial knowledge to cope with an increasingly complex world. Many consumers live paycheck to paycheck and don’t even have basic budgets.
In this environment, credit unions have an opportunity to strengthen relationships with members by providing next-generation online banking systems that are easy to use and save members time. They also need to provide better money management tools and financial education.
Online banking, excluding mobile banking, is now the preferred method of conducting financial transactions, according to a survey by the American Bankers Association. Survey results showed that the popularity of online banking isn’t exclusive to the youngest consumers: In 2009, for the first time, it surpassed all other options as the preferred banking method for all consumers younger than age 55.
While it’s likely mobile banking adoption will surpass traditional PC-based online banking in the next 10 to 15 years, next-generation home banking systems must continually evolve.
The goal of any new functionality must be to make it easier for consumers. Apple has taught us the importance of good design; Google, the importance of speed and simplicity; and Facebook, the importance of social interaction. Credit unions that can adopt all three will position themselves to compete in the years ahead.
Next: Predictive analysis