There’s no escaping digital this and transformation that. Definitely not for credit unions (CUs), which traded in a behind-the-times image to one of digital-first diligence in all things.
“The American Bankers Association reported prior to the pandemic that 82 percent of consumers preferred digital banking over banking in a branch. The health crisis has created new imperatives, however, with consumers relying more heavily on digital channels and FIs competing for their business more fiercely than ever in a time of economic uncertainty,” according to the new Tracker. “Digital innovations such as the enhancement of online and mobile banking tools, appointment setting, complete digital account onboarding and identity verification, as well as other features like vehicle buying services and loan closings will likely soon be must-haves. Credit unions that prioritize digital upgrades, combining analytics and automation, are less likely to see their customers drift to larger FIs.”
But which upgrades to prioritize? That’s what the January 2021 Credit Union Tracker® is all about, inspecting the digital innovations on track to make a difference for CUs in 2021.
Contactless Earns Its Rep Among CUs
Unless your credit union is located under a rock then you’re aware that contactless payments is sweeping the Oscars of consumer preference. It’s being verified in one study after the next.
“PSCU’s weekly Transaction Insights analysis has shown that both debit and credit contactless transactions, as a percent of card-present activity, have more than doubled since January 2020. PSCU’s 2020 Eye on Payments study further demonstrated the increase in digital adoption, with a notable year-over-year increase in respondents who reported having a contactless card and an increase in consumers likely to use mobile wallets across all demographics for the second straight year,” said Denise Stevens, senior vice president and chief product officer at PSCU.
Stevens told PYMNTS, “As the pandemic environment continues to evolve, the digital habits credit union members have adopted will become a permanent change in the new reality. To keep pace with member demand and compete with other financial institutions, credit unions must continue innovating in the digital space. This includes focusing on robust digital banking solutions members have come to expect as well as pursuing touchless payment methods like contactless cards and digital wallets to provide a seamless member experience.”
That same study recorded a 72 percent year-over-year increase in users of contactless cards.
Fate Of Branches Still Uncertain
There’s much still to be settled as to when, how and even if there will be a return to the physical experiences of finance, namely, branch banking and the use of such facilities.
Per the January 2021 Credit Union Tracker®, “A recent survey of CU decision-makers revealed that nearly three-quarters of credit unions were forced to temporarily shutter in 2020 due to positive COVID-19 cases among employees or members.” While only 10 percent have closed permanently to date, it argues for greater digital-first resiliency among CUs.
It’s a trend also found in the stats: “Twenty-five percent of respondents reported that online banking transaction volumes were significantly greater in 2020 than they were in 2019, while 70 percent said that their volumes were somewhat higher,” the Tracker states.
“Less than 13 percent reported that they planned to permanently shutter branches over the next three years due to a reduction in customer traffic, but 12 percent said they might cancel plans to build new brick-and-mortar locations.”