MADISON, Wis. (8/17/12)--Investments in high-tech service delivery were once believed to lower per-transaction costs for credit unions. Instead, members are using both technology and in-person channels, and have doubled the number of contacts with their credit unions, according to a new report from the Filene Research Institute.
Rather than benefiting from cost efficiencies of less expensive channels, credit unions are forced to adopt and pay for more ways to serve members, according to the report, "The Future of the Branch."
The paper offered the predicted compound annual growth rate for several member channels, including:
- Branch: 1.14%;
- ATM: 1.32%;
- Contact center: 3.57%;
- Mobile: 91.29%; and
- Online: 8.58%.
The challenge for credit unions is managing their channels in a holistic manner to allow members to move from one channel to another without any thought to physical location.
The report offered eight tips for channel convergence:
Start with priority interactions with members: Focus on make-or-break interactions that are critical in members maintaining their relationship with the credit union. On average, members who connect through online channels are 35% more profitable than those who only have an offline relationship.
Articulate the endpoint vision and key milestones: The report suggests that credit unions avoid the lure of "cool" technology. Instead, start with the end goal and find technology that will help achieve it. For instance, videoconferencing can be a cost-effective way to bring employee resources to multiple branches, but it also can be an expensive flop if members are resistant to anything but a face-to-face interaction on certain transaction types.
Pilot to prove value and get buy-in: Technology and member expectations change so quickly that it's not always possible to spend extensive time on evaluation and execution. The report recommends using the Internet when possible to cut costs and implementation time. The web typically is a faster, more efficient and less expensive way to pilot a project.
Have a truly multichannel, cross-disciplinary team: Adding breadth to the team helps to ensure that the concerns of every channel are addressed and leads to a better final result.
Use a multichannel member-decision engine: It's critical to create a place where data from every channel can be gathered and mobilized, but it's also important not to get bogged down in the process. Instead of worrying about how to manage every piece of data, start with priority member interactions and determine which data are needed and how to run analytics to determine what's going right or wrong.
Get digital right: It's typically faster and easier to pilot programs in the digital channel.
Rethink value creation and align incentives: Provide incentives that encourage employees to drive members to desired actions.
Win the battle for hearts and minds: It's critical for in-branch staff to feel part of the team. They should be aware of and know how to use the tools being offered through every channel so that they can support and promote the credit union vision.
To access the complete report, use the link.