The fact that in the midst of the pandemic, credit unions were able to increase their membership by 2% may seem like an anomaly.
Even a 2% growth, given all the economic hardships of the past year and a half, is still growth.
The conversation took place in a context where the May Credit Union Tracker, made in collaboration between PSCU and PYMNTS, found that only 34% of credit unions (CUs) have invested in contactless credit and debit cards, as CUs, in general, have instead focused on QR codes and digital wallets.
The 2% growth figure, he said, has both positive and negative sides. Yes, the positive numbers indicate that the trends are heading in the right direction, he said. But this same statistic lags behind the growth observed in the largest banks. Digital-only banks, he said, are experiencing particularly high growth.
To grow faster, he said, CUs must meet the needs of existing and potential members, through chains. Word of mouth is also helpful, he said – where members could help bring their extended family into the orbit of a UC, thus increasing income without the additional marketing expense.
“If you help and significantly improve someone’s financial journey in their life, they will tell other people, and that will lead to more dramatic growth than what we see at 2%,” he said. he declares.
At a high level, he said, “prioritizing innovation in payments is extremely important for credit unions.” But which payments to prioritize can be a bit of a challenge for CUs, he said. After all, he said, checking the options; including checks, credit, debit, and online bill payment (to name a few).
This is because it can be difficult for CUs to successfully prioritize payments.
The “and” conversation
“It’s still a ‘and’ conversation,” he remarked. “For CUs, it’s’ we have to do this and we need to.
He noted, however, that contactless payments are table stakes for credit unions – issuing contactless cards remains a priority just to be a competitor in financial services. The fact that only a third of CUs have made the necessary investments to issue these cards means there’s a lot of work to be done, according to Scott.
“When you look at the competition in the market, mostly the big banks are already here with contactless – and they’ve been there for months,” he added.
Contactless payments and mobile banking can lead CUs to create new experiences for members, especially through the development of virtual branches.
Scott told PYMNTS that it is important to clarify that a virtual branch is different from an online bank.
“They are two very different things,” he said, adding that “a virtual branch is there to simulate the experience you would have in a physical branch, while an online bank or a financial institution in line is something completely different “.
With virtual branches, he said, members want to interact with financial institutions in a familiar but not very tactile way, with virtual ATMs, for example, replacing those in person. Virtual tools, online education and outreach efforts can all be combined by UC to cement relationships with members and stimulate an ongoing dialogue about what they need, immediately and over time, in the process. aim to improve their financial well-being.
The opportunity is there, according to Scott, who said 60 percent of CU members (and, separately, 60 percent of CU employees) report having financial difficulties – a number that “hits you in the face. “Scott said,” and he says we have to do something here.