LAS VEGAS (5/8/14)--Suzanne Savage of Savage Consulting helped Credit Union National Association Payments Roundtable participants boil down two days of intensive sessions that covered a range of issues that included topics ranging from digital currency to payment systems abroad to digital wallets.
Suzanne Savage, of the Savage Consulting Group, spoke Tuesday at the Credit Union National Association Payments Roundtable. "You will need a loyalty program as part of your member-retention strategy," she said. "We're all conditioned to be rewarded for our patronage." (CUNA photo)
Savage also provided attendees with direction in starting their payment strategies when they return to their credit unions.
Payments innovation is largely being driven by non-financial institution players, Savage said. "Google, PayPal and others are disintermediating our members in favor of these non-FI driven programs," she said. "And this is not driven to get your payment transactions. These guys want to sell stuff. Amazon wants to sell stuff. PayPal wants to facilitate selling stuff. They want to promote loyalty."
Also, card-based revenue-generated transactions are being threatened by programs such as Target's Red Card and PayPal. Savage advised credit unions to work with their transaction processing partners to determine if their transactions are dropping and work with their providers to migrate transactions back to cards.
"If I give you one homework assignment, it's to go back and look at your ACH data," Savage said. She noted that credit unions have "crazy good" data on ACH reports. For instance, she told of working with one credit union that found its top ACH transactions were going to Chase, Capital One and American Express. "Now they knew which members they could target for credit card accounts," Savage said. "The already had their DDA accounts."
Credit unions must develop a bottom-up payments strategy that begins with accounts and cards that are desired by members. This means accounts that provide surcharge-free ATM access, ease of use and mobile device access.
The next level of strategy is technical competence. Websites, call centers and mobile applications must be easy to use. "In terms of interface ease of use, your credit union is competing with Apple and Amazon," Savage said.
Credit unions must work to build loyalty the way Amazon and Apple have done, Savage said. The best way for credit unions to be relevant in the digital wallet space to today is to offer accounts and cards desired by members.
"You want your cards to be in the wallets that don't belong to you," Savage said. "The best way to do that is by providing accounts and cards that members want and building loyalty."
For credit unions, a payments strategy boils down to relationships, Savage said. This includes member service, personalization and, again, offering products that members want, such as remote deposit and personal financial management tools.
Even as the payments landscape changes, building loyalty and retaining members remains more important than ever. "It will always be cheaper to keep members than to acquire new ones," Savage said.