Where Is Your Credit Union in Its Digital Transformation Journey?

TIBCO Credit Union Solutions
Reading Time: 4 minutes

Credit unions have been nibbling on the digital transformation cake for some time, but as a consequence of the COVID-19 pandemic, increasing demands for digital banking experiences, and competition from fintech and neobanks, transformation is now accelerating. Credit unions are actively trying to navigate the digital landscape and make better use of data to unlock cost-saving, marketing, and customer retention opportunities, and remain competitive in a digital market.

If your credit union is yet to kickstart digital transformation, time is running out. Credit Union Times estimates that more than 5.6 million union members moved to online banking in 2020, compared to four million the previous year. Furthermore, because of pandemic-induced effects, the finance sector is expected to make a decade’s worth of digital progress over the next five years.

Prerequisites for Digital Transformation Success

At its core, digital transformation entails a combination of innovative ideas, processes, data, and digital technologies to offer new forms of consumer value and efficiency. It cuts across all aspects of a credit union, from IT and transactional processes to the staff and public outlook, delivering long-standing improvements across the board.

Admittedly, the digital transformation journey is easier narrated than traveled. In many organizations, digital transformation is met with stiff resistance from staff members who would rather stick with what they know than embrace change or executives who are too focused on short-term profitability to make impactful technology investments.

Nevertheless, as many credit unions have demonstrated, it is entirely possible to implement digital solutions successfully. You need a solid plan aligned with your organization’s strategic objectives, support from your team, the right set of tools, and a concrete approach for tracking your progress.

How Can You Track Digital Transformation Progress?

Many institutions succeed in planning for transformation and investing in the right tools but fail along the implementation journey. This is usually because they overlook the importance of tracking and managing progress and the inevitable challenges that arise along the way.

Do you know how to gauge your progress as you pursue your digital transformation goals? How can you audit the effectiveness and impact of your steps? Here are some valuable tips.

1. How well are you using data?

If you offer digital services through web and mobile apps, you likely already have a hefty amount of member data in your servers. A critical aspect of digital transformation is a data strategy that defines how to leverage relevant data for insights that can improve your operational model, and member experience, benefits, and satisfaction. With credit union data, you can understand members in new ways and give them the solutions they need even before they come asking.

Data plays into every part of a credit union, but sales and marketing are some of the most obviously impacted. So, to gauge digital transformation success, start by looking into how your sales and marketing team uses data to create targeted marketing campaigns and convert leads into sales. Analytics can help predict which members need loans, acceptable payment terms, and their credit worthiness. With this information, your team can create highly personalized solutions and promote member satisfaction.

And they can determine the effectiveness of their efforts by measuring loan portfolio growth by member, and comparing churn levels before, and a few months after, implementing data-driven targeted marketing and personalized service.

2. Are members choosing digital solutions out of preference or necessity?

Credit unions have always prioritized member service as a way of differentiating themselves from conventional banks. More often than not, however, this service relies on in-branch member interaction. Now that members are less likely to set foot in a branch than they were in the past, digital solutions are required to maintain or improve member engagement, optimize operations, and stay competitive.

Digital transformation allows you to create a cohesive and personal member journey. With a proper data integration solution, you can create one, holistic, online system that maintains a seamless flow of information within and between departments, enabling your team to move members from marketing to sales, service, and support. For example, in a digital member experience, a member can click on a targeted ad, originate an account, receive tutorials and onboarding information, get automated feedback on loan information, pay bills, and send funds, all through one convenient app.

The results of a comprehensive, optimized digital experience are apparent by the number of members choosing the app over a call to the contact center or a branch visit. A data management system can give you insights into the number of members using your app relative to the number visiting your branches and highlight the most impacted services. That way, you can accurately gauge the effectiveness of your platform.

3. How well is your organization reacting to change?

Among the numerous aspects of digital transformation, readiness to embrace change stands out as one of the most important. Credit unions bear the burden of regulatory constraints, security, and strict data privacy frameworks, while new digital-native solutions threaten to outpace them in growth and consumer acquisition. Although you cannot disregard security and compliance, you must develop policies that prioritize agility to meet changing member demands and adapt to new expectations and technologies.

While being mindful of the investment needed, or security and compliance concerns, digital transformation requires changing your credit union from the inside out.  You must understand and manage how your organization responds to transformation; Frequent campaigns, questionnaires, and internal audits can be effective ways of gauging their willingness to change. Staff will be more willing to accompany you on your journey if they are actively involved and kept well informed.

How to Stay on Track 

Traditionally, credit unions have taken a relatively restrained approach to digital transformation, but recent trends indicate that the sector’s transformation is well underway. Looking ahead, digital solutions offering high automation levels, accurate insights, and intuitive end-user experiences will be must-haves for credit unions to navigate competitive markets.

At TIBCO, we have extensive experience developing and optimizing data management solutions that resonate with credit unions. Our comprehensive range of credit-union-centric products provides enterprise-class data integration, analytics, and governance, giving you real-time insights into member preferences and behaviors. Furthermore, with advanced reporting and visualization, TIBCO delivers insights and outcomes effectively, enabling you to spot opportunities and improvement areas and make timely decisions.

Contact a TIBCO expert and learn more about how we can reinforce your data strategy and help propel your credit union into the digital era.