digital lending customizationProviding exceptional member service is at the heart of every credit union’s values. However, with increasing competition in the banking world, good service alone will not be enough to keep members truly satisfied. So what is it that members are seeking now? Surprisingly enough, it’s not always lower rates. Savvy members are still interested in competitive pricing, but a member’s loyalty doesn’t lie with bargain banks either. What members want is customization. Taking an example from another industry, one of the first organizations to provide a unique and customized experience is a fast-casual restaurant many know and love: Chipotle.

Some might argue that any restaurant offers customization. For example, if you don’t like pickles, then you can ask for them to be excluded from your McDonalds burger. Although this is customization, it does not provide that same level of experience the consumer demands. Chipotle offers more than minor adaptations to their product. Burrito lovers are able to choose each ingredient that goes into their meal and through their online ordering platform, customization goes down to a micro level where they can mark how much of each ingredient they want. The “build your own” concept was not a revolutionary idea created by Chipotle but they were able to build their cult following through customization in combination with the overall experience, even recovering from food poisoning outbreaks that would have been certain demise for other restaurant chains. As you consider this success story, other similar brands probably come to mind... everyone knows a Starbucks addict. Most likely, it's not the coffee itself that drives the massive loyalty that Starbucks enjoys, not to mention the percentage of income people are willing to spend. The level of detail their ordering system allows makes "Emma" feel special when her name is displayed on her recyclable cup at pickup of her grande non-fat, no-whip, double shot, half decaf caramel mochaccino with 2 ice cubes.

All this taco and java talk may seem distant from credit union-land, leaders in our industry can learn valuable lessons from the likes of these brands. Members expect customization in more than their lunch or caffeine injections these days and credit unions who are not able to provide custom solutions will likely fall behind. For example, credit unions have been talking about paperless lending for years and even though this is still a relevant feature, CUs can take the experience to the next level through customization. Here are 3 elements credit unions can add to their digital lending process to customize the member experience.

Smart Funnel
Sometimes the “if it’s not broken, don’t fix it attitude” does not apply, and will actually cause a credit union to become outdated in the eyes of younger generations. CUs can streamline the digital lending experience by creating smart funnels. These operate in the background and prompt members with relevant questions based upon their previous answers as they progress through a loan application. With connections from available data sources, credit unions can also customize the requirements for digital loan applications, thus saving time for the member by reducing keystrokes. A recent study by Signacat revealed that 39% of respondents abandoned financial applications due to the length of time taken to complete the process. Smart funnels help to create an overall efficient and effective experience that is less stressful for all parties involved. 

digital communication at financial institutions

Personalized Support
Digital loan applications are convenient but they can create headaches when members are unable to get the immediate support they need. However, there are solutions CUs can provide that allow members to get the personalized help they need form their home. Digital support, like help articles, is an entry-level tool to help answer members questions. Taking it a step further, with secure chat messaging, Member Service Representatives (MSRs) are able to provide quick and scalable support. According to a recent study by PwC, omni-channel (both human and digital interaction) is no longer the preferred experience for members. Omni-digital, which encompasses online, mobile, and digital hybrid experiences, is the new norm. Just a year ago, 46% of financial institutions identified onmi-digital as their dominant mode of communication over omni-channel (45%) and human interaction (10%).  

Supplementary Services
Beyond the loan itself, credit unions are beginning to offer supplementary services to create an end-to-end experience. No matter how good the current digital lending experience is, there is always room to provide increased support that meets other needs the member may have. From helping home buyers find a moving company to recommending a trusted dealership, be creative with additional ways to add value. These complimentary services strengthen relationships with members and continue to build trust. This also allows CUs to build more relationships with other business and organizations in their community, which is something members often like to see from their credit union. Some other examples of supplementary services include:

- Financial Education Services: 70% of members would give their financial institution more business if they were provided with better financial guidance. An investment in improving your members' financial literacy demonstrates a commitment to building a lifelong relationship.

- Integrating Savings Tools: According to a December 2018 CNBC report, over half of Americans, 52 percent, don't have enough put away to handle a $1,000 emergency expense, meaning they would have to raise the funds by borrowing them, putting them on a credit card, or by selling something. The number is even worse for Millennials: 6 out of 10 Millennials say they have less than $1000 in savings. Offering creative lending solutions or options which carry a savings component can change your member's financial lives. Consider debit cards that round up purchases to the nearest dollar and deposit the change into a high yield savings account. Or, you can pool the change from each rounded transaction in a separate account until there is enough to make an extra payment on one of the member's loans. 

- Identity Theft Services: A 2018 analysis of phishing attack emails found that the banking industry fielded the largest share of malware attacks. The study revealed that 42% of all malware attacks via email were “banking attacks” - malware that targets the credentials of victims interacting with online banking sites. When members feel their credit union is looking out for their personal cybersecurity, they further build loyalty. Be sure the digital banking login procedures employ industry best practices such as two factor or multi-factor authentication with proper measures to validate the member's device and ensure account owner identity. 

In the realm of digital lending, customization can go a long way with members. Although many members prefer a  digital experience, it does not mean they want to lose the personal relationships and value that credit unions traditionally provide. Customization in credit union digital lending helps members complete the application process faster without losing the sense of human interaction that they would receive in-branch. Members today expect customization in all areas of their life, credit unions included.

Digital Lending eBook

Topics: digital lending, customization

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