Users may still value physical branch locations and ATMs, but increasingly it’s the availability of digital banking that informs how they choose and interact with a banking services provider. For your financial organization to survive and thrive in this new marketplace, it’s not enough to simply offer an app and a website. To be successful, your digital banking offering must address or at least avoid the pain points of digital banking software that many users experience with their current institutions.
Credit Unions Are Uniquely Vulnerable
The shift from in-branch to digital banking hits credit unions especially hard. Credit unions have always emphasized personal service and solid relationships with their members, and the shift away from in-branch banking erodes that relationship.
On the other hand, the relatively modest size of even the largest credit unions makes it difficult to compete on technology with national and international megabanks. With non-bank lenders already siphoning away much of the lucrative mortgage trade, the prospect of losing retail clients to deep-pocketed banks with massive IT budgets is daunting.
That being said, the outlook isn’t entirely grim. The new approach to “customer experience banking” relies on technology more than face-to-face contact, but it’s still the same, relationship-driven ethos that has always been a credit union’s stock in trade. If you can roll out a digital banking product that addresses pain points in competitors’ products, it’s possible to poach clients from both megabanks and the smaller, regional banks you compete with directly.
Fintech Doesn’t Always Favor the Biggest Player
It’s important to recognize that technology can be a great equalizer and that a nimble start-up can often cut the ground from under more established players. There were plenty of search engines before Google, and an established aerospace industry before SpaceX, but each of those companies identified and exploited vulnerabilities in the business models of their respective industries.
While the big banks have a strong lead in financial technology, they’re not unassailable. Their early leadership in digital banking means that they have legacy platforms and code to maintain, and that — combined with their massive base of existing users, which complicates updates — means they may be at a disadvantage to smaller, nimbler players.
Surveys repeatedly show that consumers who are dissatisfied with their digital banking will look for a better experience elsewhere. If you can provide that experience by targeting weaknesses in your rivals’ offerings, you’ll be in a strong position to compete. A few pain points in digital banking software that come up frequently in studies and surveys include:
Inconsistency Across Platforms
Many of the larger banks built their digital presence around web access, with mobile apps following well afterward and sometimes lagging behind. Inconsistencies in the features and services offered, along with differences between the mobile and web interfaces, can represent areas of friction for consumers.
Unintuitive Design and Poor “Onboarding”
One unfortunate reality with software is that it often reflects the thinking of the skilled engineers creating it rather than the ordinary consumers who use it. If users struggle to make sense of the software, they may simply decide it’s not worth it. Good “onboarding” materials to help them learn product features can help, but those aren’t always offered.
Incomplete Digital Experience
Not every user will want to have a pure-digital experience, but it should be available for those who do. Younger consumers who are “digital natives” — which is to say the bulk of your future clientele— may resent having to come to the branch to complete some tasks, especially that of opening an account. There are some undeniable challenges involved in verifying ID remotely, but the technology already exists to deal with them smoothly.
Lack of Speed
Even otherwise-robust, full-featured software can become a liability if it doesn’t offer the kind of performance consumers expect. A chronically slow website or mobile app — or one that stumbles when switching between tasks and functions — will be a source of frustration for clients.
Downtime and Outages
The larger and more complicated a bank’s programs become and the more legacy code they contain, the more difficult it becomes to implement updates and changes. The predictable result of this is downtime and outages, which can be maddening for consumers. Ideally they can be carried out within a planned window of time, with minimal disruption for the end users, but that’s not always the case.
Shaky Support
A final pain point comes when users need to contact your technical support. To be effective in maintaining your user’s goodwill, support must be easy to access and always available. Even with a good FAQ page or high-tech chatbots, at some point your reputation will rest on a human in a call center. This is especially true when there are major updates, changes or outages with the product.
Digital Insights and a Friction-Free Banking Experience
There’s already a banking product for credit unions that addresses those pain points and offers you the opportunity to attack the banks on their own digital turf. Lumin Digital’s software was built by engineers and programmers with a solid history in tech start-ups, filtered through the knowledge gained by PCSU in its decades of supporting credit unions.
Behind the sleek, modern interface you’ll find a product — and a company — that addresses all of those pain points:
- Consistency: The mobile and web versions of the software are seamlessly consistent. Your users can switch between laptop, phone and tablet without a second thought.
- A Complete Digital Experience: Your users will never need to come into a branch unless they want to. If you’d like to extend the feature set even further, your own IT team can add features through the product’s application programming interface.
- Intuitive Design: The Lumin app’s interface is fresh and modern, unhampered by concerns of “how we’ve always done it.” Because it’s consistent across platforms and functions, your users will pick it up easily, and well-designed onboarding materials are already available for it. You won’t have to come up with your own.
- Speed: Lumin’s product is a cloud-native app, powered by Amazon Web Services (Lumin is an advanced technology partner) so it’s always fast, whether it’s accessed from mobile devices or the web. Also, there’s no legacy code to slow it down.
- No Downtime: Updates to the software are pushed out incrementally rather than in the form of massive, cumulative actions. Your users never see them nor know they’re happening.
- Bulletproof Support: You won’t need to hire and train support staff or contract it out to a call center. Skilled, well-trained 24/7 support is part of the package.
Addressing those areas of consumer friction can make you competitive against the banks, but there are subtler benefits to using the Lumin platform. The most significant is that it gives you improved access and digital insights into your users’ use of financial services.
Drawing on the data the app generates, you’ll be able to offer highly personalized services, advice and promotions to each consumer in real time as needs change. It’s how you can bring the relationship-driven credit union ethos into the 21st century and make it meaningful to a new generation of users. Contact Lumin Digital today to request a demo, and explore how the app can keep your institution relevant in a mobile-centric world.
References:
- https://www.pwc.com/us/en/industries/financial-services/library/pdf/pwc-consumer-digital-banking-survey-2019.pdf
- https://www.aba.com/about-us/press-room/press-releases/survey-bank-customers-preference-for-digital-channels-continues-to-grow
- https://www.fdic.gov/bank/analytical/quarterly/2019-vol13-4/fdic-v13n4-3q2019-article3.pdf
- https://www.jdpower.com/business/press-releases/2019-us-retail-banking-satisfaction-study
- https://www.globenewswire.com/news-release/2019/11/19/1949400/0/en/Report-Consumers-Want-it-All-Demand-Security-With-Minimal-Friction-in-their-Digital-Experiences.html
- https://www.accenture.com/_acnmedia/pdf-95/accenture-2019-global-financial-services-consumer-study.pdf
- https://www.paymentsjournal.com/digital-account-opening-enabling-greater-trust-between-financial-institutions-and-customers/
