Credit unions have long held a reputation for excellent member retention rates. Members are genuinely loyal to their credit unions. Yet, while they maintain their loyalty in the form of a car loan or mortgage, members are increasingly seeking out different FI's for their primary provider. While historically credit unions have been heavily focused on consumer lending by providing the lowest rates to members, it's time to step out of the past, and look beyond the present. Look beyond the lending department and consider the payments opportunity. In the top 3 US banks, for example, credit cards represent roughly 26 percent of loan volume, whereas for credit unions, cards represent just a little over 6 percent! It's time for CU's to look at how their members' lifestyles and spending habits have evolved, and evolve along with them.
Think about, in a typical week, how many times you use your credit card, versus how many times you think about your car loan. Being on top-of-wallet places your credit union on top-of-mind. The opportunity that credit unions miss out on when not being their member's choice for their payment is not just in lost revenue from all those transactions... it's in lost data! The best place for a credit union to gain insight into its members' spending patterns is having the insight from a card they use daily.
The insights gleaned from your CU's card program data can shape not only WHAT products and services you are offering to members, but HOW you are offering them. Knowing your members' spending habits will drive the conversations on other opportunities - car loans, HELOC's and more. It can also provide insight into what marketing tactics and channels your members respond to.
When building out a card program, be sure to design one that works for your members, not just for your credit union. Members want to move and manage money easily between accounts, other FI's, and betweem people. They want transparency into their accounts and any associated fees. They want to be rewarded for their activity. And they want customized marketing so they are not being bombarded with offers that don't relate to their current situational needs. Anticipate the future needs of your members by analyzing what they are spending in the present.
Members have evolved in how they spend their money, and what methods they use to spend their money. It's time your credit card joins the evolution!