Will credit unions lead the way in the banking revolution?
Like much of our activity now, the future of banking is very much digitally focused. 71% of consumers are looking for a multi-channel experience from their banking, with only 25% of those requiring the option of human assistance.
With this in mind, we take a look at how credit unions and building societies can lead the digital banking revolution over traditional high street banks.
Credit unions vs traditional banks
Credit unions and building societies are in a unique position within the industry, finding the perfect balance between digitising processes and procedures to benefit their customers while maintaining a level of face-to-face service which provides a personal touch.
Credit unions’ personal approach to serving communities and their unique need has seen rapid sector growth. This can mainly be attributed to the pandemic, and the current economic crisis facing households.
Legacy banks are finding it increasingly difficult to meet customer demand. Their traditional business model cannot sustain the fast, digital approach that many fintechs are offering.
Banks’ business models can’t adopt a digital-first infrastructure, so while they understand the importance of embracing digital banking to retain their customers, implementation can be costly and lengthy for big name brands with hundreds of physical branches and a large workforce.
Credit unions tend to have fewer staff and branches than big name high street banks, which offers an opportunity to embrace digital transformation rather than focus on their physical presence in the community.
By implementing digital transformation, credit unions and their members will see growth, allowing streamlined loan approval lead times and affordable lending.
Due to traditionally servicing the majority, banks’ products and services are usually targeted at the masses with limited personalisation. A staggering 90% of customers are looking for a personalised service and recommendations from their banks, with younger consumers looking for the kind of personalisation they have grown up with and found on the platforms including Facebook, Instagram and Netflix.
Credit unions have strong and unique relationships with their members due to the high frequency with which they interact with them. By utilising valuable member information, credit unions are able to better understand the needs of members, and get an idea of what they need even before they get in touch – this proactive and personalised service is exactly what customers are seeking.
The future of the digital revolution
Credit unions and building societies have a fantastic opportunity to transform their processes, procedures and services to engage and reach more members with a unique offering through digitalisation.
While credit unions and building societies may face challenges embracing a digital transformation due to limited budgets, there are cost-effective strategies that will ensure they lead the financial banking revolution if they choose to embrace it.
Optimus Cards empowers credit unions and building societies with integrated and bespoke solutions.