Deep Dive: Meeting Credit Union Members’ Mobile Banking Needs

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Consumers’ banking preferences have undergone a sea change over the last few years, and a growing share of Americans prefer to bank digitally rather than visit a branch.

The quality of a financial institution’s (FI’s) mobile app has become even more crucial to customers than the look of its branches, in fact.

Research conducted by California-based card-issuing platform Marqeta in October last year revealed that 62 percent of Americans did most of their banking online and that 69 percent expected to use their mobile banking apps regularly within the next 90 days. It comes as no surprise, therefore, that 67 percent of consumers said they would not be inconvenienced if they could not access banking services at a brick-and-mortar location at all.

Mobile banking apps today have surpassed physical branches as the most critical way customers interact with their credit unions (CUs). The following Deep Dive explores the role of offering mobile banking tools in maintaining customer satisfaction and explains how this role is becoming more important during the pandemic.

Impact On Credit Unions

CUs have long prided themselves on delivering a more personalized and satisfactory banking experience than that of bigger banks. Research indicates that banks are finally catching up, however.

The American Customer Satisfaction Index (ACSI) reported in 2019 that satisfaction with banks, despite a slight dip, topped that of CUs for the first time in 11 years, a sign that banks have upped their game when it comes to offering convenient products and services.

This is also an indicator of how consumers’ negative attitudes toward big banks may finally be a thing of the past. The ACSI, which measures satisfaction on a scale of 0 to 100, found consumers’ satisfaction with banks slipped 1.2 percent to a score of 80, while CUs were down 2.5 percent to a rating of 79.

This shift has come as consumer demand for innovative and digital-first banking services has steadily increased. Having access to financial resources and existing infrastructure has allowed big banks to quickly roll out new mobile banking products and services. CUs, on the other hand, can find themselves working with limited budgets and technology, which can impede their ability to innovate.

CUs are also challenged by the reality that fewer younger consumers are choosing to bank with their parents’ CUs. A survey found that 60 percent of consumers do not bank at the same CUs as their parents. More than half of these consumers said it is because they have moved to a different location.

It is thus imperative for CUs to deliver innovative mobile banking experiences that enable their customers to seamlessly access banking services in a way that meets the unique needs of their members.

Providing access to mobile banking that eliminates having to visit physical branches is also vital to ensuring higher satisfaction rates among members, according to PYMNTS’ Credit Union Innovation Index. The index found that being able to access mobile banking capabilities that are easy and convenient to use is essential to satisfaction for 49.7 percent of CU members and 53 percent of CU nonmembers.

The Pandemic’s Impact On CU Members’ Banking Preferences

Consumers had been gravitating toward digital and mobile banking channels for the past several years, but the ongoing pandemic has motivated the public to embrace these methods as never before. A report found that nearly a quarter of consumers are now more likely to use banking apps and nearly as many are less likely to visit a brick-and-mortar branch. CUs must therefore provide access to a variety of banking functionalities entirely from their mobile apps.

Some CUs have made significant progress in improving their digital and mobile banking capabilities over the last seven months. More needs to be done, however, to attract and retain customers in the long term and to be able to better compete with larger FIs that have the financial resources and infrastructure to quickly deploy new products and services.

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