Four Principles of Digital Transformation Help Credit Unions Position for Future Growth

TIBCO Credit Unions
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The internet continues to revolutionize modern business. Organizations continue to move critical functions online to meet consumer expectations and demand, a trend the pandemic accelerated. To stay relevant to consumers and competitive with peers, organizations are adapting to this new digital paradigm, and credit unions are no exception. 

Many organizations guide their data-driven digital transformation journey via the principles of flexibility, agility, consumer focus, and evolution.

With many younger generation members hesitant to follow their parents in banking at credit unions, that principled approach is a helpful outline for developing an optimized digital strategy to appeal to this audience. Consider incorporating these principles to position credit unions for growth.

Principle 1: Flexibility

Flexibility is a key component of the response required to meet the demand for change. Achieving it requires constant monitoring and evaluating market trends and being willing to respond with new products and services or update existing ones.

Although credit unions have achieved notable success with older generations, younger, tech-savvy consumers may be a harder sell—mainly because the personalized, digital experience they prefer is often lacking. Millennials and Generation Z members have grown up expecting a higher degree of technology integration in the services and products they use and buy. 

These consumers favor seamless online experiences and, like all cohorts, are put off by lengthy onboarding procedures with extraneous or unnecessary steps. They are likely to seek the simpler alternatives that competitors increasingly offer.

In digitally transforming your business, it’s essential to avoid lock-in to technologies that can’t adapt to changing business needs. In particular, this applies to your core system frameworks. If they can’t integrate with newer technologies, you risk missing opportunities to deliver the experiences that attract and retain younger members.

Digital transformation requires the flexibility to evolve your processes over time to meet emerging business challenges and take advantage of new opportunities.

Principle 2: Agility

Your credit union must also be agile when designing and implementing change. Maintaining business agility is key to staying competitive, and that means rapidly rolling out new products and services a changing business environment demands. 

Surmounting the agility challenge calls for effective digital tools, whether your credit union provisions these functions or outsources them. Leveraging data is essential to keeping your credit union agile. Modern data analytics tools can pinpoint and explore changing business trends while providing the clues necessary for an effective response to keep your offerings relevant to new, potential, and existing members. 

Principle 3: Consumer focus

Given the ubiquity of online information, consumers are more educated than ever about financial services options. Your credit union must remain consumer-focused to recognize, understand, and appropriately prioritize these expectations, placing them at the heart of your member retention and acquisition strategies.

Data analytics solutions can provide an accurate understanding of what members expect from your credit union through data capture, measurement, trending, and analysis to help you identify evolving member requirements. You can use these insights to guide your credit union’s digital transformation strategy.

For example, all cohorts expect the option to open accounts, apply for loans, track progress, ask questions, monitor savings achievements, and manage their finances online. Consumers expect these digital experiences to be easy to navigate and personalized. Younger, tech-reliant members particularly expect these experiences to be conducted seamlessly across online and offline channels; if they initiate an account origination on one device, they expect to resume where they left off on another.  

To remain competitive, banking functions should be readily available online, seamlessly integrating interactions across all channels as much as possible.

Principle 4: Evolution

Data and analytics technologies are essential for delivering the flexibility, agility, and consumer focus required to respond to change. Credit unions must then integrate the insights these tools provide into their business strategies, processes, and decisions. Examples include applying an increasingly clear understanding of member behavior in designing new products to meet selected member segments’ needs and augmenting their associated online and mobile banking services. 

Modern data analytics solutions can provide this information. And when it’s coupled with advanced member relationship management and marketing tools, it enables you to build and implement a roadmap to enhance your competitiveness and grow your credit union.

When seeking a data analytics solution, look for machine learning (ML) and artificial intelligence (AI) capabilities. These tools provide you with highly actionable business intelligence without requiring an army of data analysts and software engineers to oversee the process.

Although credit unions have achieved notable success with older generations, younger, tech-savvy consumers may be a harder sell—mainly because the personalized, digital experience they prefer is often lacking. Click To Tweet

Enlisting the capabilities these solutions offer can help your credit union appeal both to its traditional audience and to the tech-savvy generations who expect digital products and services.

Read the ebook, Understanding the value of analytics: a guide for credit unions, to learn more about how data-driven digital transformation can help you capitalize on these trends and position your credit union for future growth.