Remember the time that was catastrophic for financial organisations? It was almost like doomsday for banks and other financial institutions. Of course, we are talking about the global financial crisis in 2008. After bearing the consequences of this crisis, the first recovery measure was to give birth to the credit unions.
Since then, credit unions, globally, have contributed to financial sustenance and growth, assisting millions in their entrepreneurial journey. Here are 5 trends that we think shall take credit unions a few steps ahead in their progressive journey:
1.Design thinking for enriched customer experience
The concept of design thinking has become a sure shot strategy in most areas however, discussions on financial institutions, especially credit unions is still in its infant stage. When we talk about design thinking, most tech experts in the finance area think of just the front-end. But in hindsight, they need to realise that design thinking goes way beyond just the UI.
Occasionally, we have observed that customers back out from their financial application midway due to reasons like high loading time, frequent app crashes, irrelevant offerings, unwanted app notifications, etc. Think about it, is it just the UI that is affecting customer interests?
Design thinking is a means to ensure that a website or an application is created with the target customer’s pain points in mind and offers the right solution. One of the most influential factors for credit unions is empathy banking, which is catering to your customer needs comprehensively. Credit unions can attract customers when they have end-to-end seamless app/web functionality along with easy-to-enunciate UI. Credit union’s focal point needs to be customer-centric and not business-centric.
2.Building a Digital Dynasty
Ever since the pandemic gave us a new perspective on social distances and online transactions, we have realised the importance of digital transformation, especially for the financial institutions. In the future, digital sophistication is going to be the deciding factor of customer satisfaction for credit unions.
For starters, take the enormous gift of digitisation for financial institutions – Artificial Intelligence, as an example. From accessing customer insights to instant credit report analysis, AI can be the one-stop shop for credit unions! Acting as additional limbs to this AI are Machine Learning, RPA, DevOps, etc., and they are reinforcing the digital kingdom for credit unions.
Here is a real-time situation that can explain the need for digital finance. During the recess period between the pandemic lockdown, many SMEs and MSMEs approached credit unions for financial assistance and the frequency was unexpectedly high. The manual onboarding and loan processing was not only tiresome, but also created discrepancy leading to dissatisfied customers.
Thus, customers realised that digital is the new normal, and it is imperative for credit unions to understand and align with the same thought. Also, digital processing provides well-defined financial process with minimal error, hence, easing out the job for credit unions.
3.Analytics: The Aladdin’s lamp of the digital dynasty
We can consider analytics as the Aladdin’s lamp of credit unions, as it helps create a customer-focussed journey and reach the targeted ROI. Some types of analytics are customer analytics, fraud analytics, business analytics, etc.
Analytics is like the brain for AI, as it nurtures root information for AI to process further. It gathers both structured and unstructured data and converts them into useful insights. These insights are used to target audience, run marketing campaigns, achieve business benchmarks, etc.
With the customers expecting digital finance, credit unions need to explore out-of-the-box ideas to attract the right customers and the best way is through customer analytics. The most impressive aspect of analytics is the real-time insights, as it helps define holistic customer pain points for further analysis.
4.Thinking the Zoomer way
Coming to the most interesting and important trend – The Zoomer perspective. We could have told millennial perspective, but thinking ahead of time, zoomers are crystal clear of their financial requirements and expectations from financial organisations.
The thought process of zoomers and millennials varies from boomers, and credit unions need to re-define their offerings to suit the new perspective. From PFM to payment lifestyle, zoomers expect financial institutions to act as financial advisors rather than just a place to save and invest money.
Credit unions need to re-think their strategies to suit the young customer mindset and invest in their creative ideas to ensure enriched customer satisfaction.
5.Financial Inclusion: Paving way for Empathy banking
Post the 2008 financial crisis, the reason for introducing credit unions was to support SMEs and MSMEs to sustain their businesses, contributing to the global economy. This differential factor between banks and credit unions is what we can term as Financial Inclusion.
Small and mid-sized enterprises are currently the rising contributors of the world’s economy. In order to ensure financial sustenance, credit unions need to consider financial inclusion and actively serve the underserved. It can be individuals or group; enterprises need this assistance more than ever due to the pandemic.
While the need for credit unions is still prevalent in the current times, by embracing the technical advancements, banks are proving to be a tough competition for credit unions. The only thing that can skip two steps for credit unions in this journey of enhancements is the tech innovation and the lack of legacy systems. However, everything finally boils down to the customer experience and satisfaction. Credit unions that concentrate on customer pain points and offer relevant offerings shall ultimately rule the financial world.
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