Mobile has become key to credit union member relationship

The increasing role of mobile technology was a recurring theme at the World Credit Union Conference in Belfast. In a special breakout session at the conference, delegates looked at how devices can be used to improve member relationship and engagement.

Paul Kennedy, a consultant at Bayberry, highlighted some of the latest trends in the industry. The daily consumer experience has become mobile first, which means that credit unions need to extend their range of services, he said.

Credit unions must embrace digital technology

Contrary to some beliefs, mobile technology is not restricted to mobile phones, but includes any device that consumers can use that connects to the Internet. This are known as the Internet of Things. From checking their emails to downloading boarding passes, using smart technology to clear security or maps to find locations, consumers are becoming increasingly dependent on their smart devices.

As a result, the opportunities to use mobile to engage members are many, said Mr Kennedy. Around 43% of the world’s population now uses a smart phone. Mobile banking in particular is experiencing huge growth in Africa.

“Mobile is by far the fastest growing banking channel in today’s market,” he said, explaining that customers wanted to track savings, check their balance and be notified of spending.

Another challenge for credit unions comes from disruptive players, for whom mobile is a central part of their offering. “How they differentiate themselves is all about consumer experience and being omnipresent. Banking is no longer somewhere you go to but something you do,” he told delegates, warning them about seeing mobile as merely an extension of their website.

Read more: Full coverage from the 2016 World Credit Union Conference in Belfast

According to Mr Kennedy, only 24% of financial institutions in Europe, the Middle East and Africa have an end-to-end strategy to engage consumers and only 21% have a chief digital officer. “Mobile banking isn’t just an app,” he said, adding that credit unions needed to engage on social networks where people hang out.

“People flip between mobile, between channels and experiences. Consumers are omnichannel, mobile needs to be the centre of an omnichannel experience, driving new forms of digital engagement,” he said.

“You need to think about engagement and making yourself relevant and present. Twenty percent of mobile users’ time is spent on social networks, 5% on purchasing. Mobile is not a device, it is a channel into the consumer. Unlike branches or points of sale, which are owned by credit unions, the customers own the mobile channel. Social media is unlocking the mobile so social networks should be central to your plan,” he said.

Technology is not a panacea to problems, it is treated like that sometimes

Focusing on providing an omnichannel experience also means that credit unions need to have an infrastructure they can rely on, a substantial cost for some credit unions, especially if members end up not using the new platforms. To minimise risks they should first make sure they know and understand their members. “Be customer centric. It is not about us but about them.”

As broadband access is becoming easier, the impact of mobile is going to increase as well. “Everything changes to be oriented around convenience, we need to be there,” said Mr Kennedy. He thinks collaboration is critical for individual credit unions that want to develop a mobile platform but do not have the resources to do this on their own. What credit unions should not do, he added, was regard technology as the potential solution to other problems they may have.

Asian Confederation of Credit Unions aims to take the lead in digital payments

“Technology is not a panacea to problems, it is treated like that sometimes. People have an issue and they are looking for technology to sort it out.

“Internet banking is consolidating the mobile channel. If you’re looking for a solution, quite often it happens that you go to the core back office provider. Most likely, the process you have won’t be sufficient to make the experience,” added Mr Kennedy.

Asked what the key components for developing an IT stack for mobiles were, he said: “That’s the ideal for building a mobile strategy that you get your IT stack right but also that you get your business right to see if it’s relevant to today’s mobile”.