Learning from the Digital Experience at Top 100 Credit Unions

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Credit unions are a popular financial institution for many, yet the digital experience offered to their members can vary greatly. There are lots of insights and ways credit unions can use the digital experience at the top 100 credit unions to augment and transform their own offerings and operations.

Recently, Finalytics.ai released its 2023 Credit Union Digital Experience report, which they call the “annual deep dive into the largest credit unions in America by asset size, to analyze digital experiences across the industry.”

This report evaluates credit unions based on several items, including website, online account origination, analytics, member experience as a whole, cybersecurity, and privacy offerings. We wanted to take a look at these findings and see what trends are emerging.

In the modern-day, digital experiences are becoming a cornerstone of the financial industry. Credit unions have been taking advantage of these advancements to better serve their members. By analyzing the strategies implemented by these successful organizations, we can gain insight into how credit unions can create an effective digital experience for their members and improve overall customer satisfaction.

Let’s examine what we can learn from the digital experience of the top 100 credit unions in terms of user-friendliness, accessibility and services offered.

Overall Digital Experience Winners: Here’s How They Did It

The top 5 credit unions when it came to overall credit union digital experience, were VyStar Credit Union, Alliant Credit Union, CommunityAmerica Credit Union, Wings Financial Credit Union, and Redwood Credit Union. In general, each of these institutions enhanced their members’ digital experience by providing them with the features, aesthetics, and overall experience they preferred.

CU UX (User Experience) Needs to Be Optimized

Finalytics.ai ranks the different categories on a scale from worst to best with scores from 1 to 5. The average user experience (UX) score was 2.31 out of 5, which shows a marked need for improvement across the credit union industry.

In order to improve your own credit union’s UX, product-focused primary navigation is a must. Though this seems like a no-brainer, Finalytics.ai found that slightly more than half of the credit unions studied actually had their products listed in their primary navigation – the website menu.

Members and prospects are often coming to your website for solutions, not philosophies. While your mission and community outreach are hugely important to your brand image, your CU website should cater to those looking for product- and service-based solutions to their current problems and questions.

Think of it this way: if you opened your favorite navigation app or website and had to click through three or four tabs before you could enter in your destination address or name, you’d likely find a new navigation app, right? The same is true for your members: if they need a loan, they want to be able to navigate to your home page and see a tab that will take them to the loan types you offer, or even a digital loan application form.

The member journey should be one that is reflected in the UX of your website. It spans multiple channels, touchpoints, and sessions – this means your online presence needs to help guide them through that journey with as little friction as possible.

Personalization Matters

We’ve talked here and on our sister site’s blog about the importance of including personalization at all steps in the member journey, and the Top 100 credit unions report agrees, naming it a top growth trend.

Only 7 of the top 100 credit unions in the nation are ranking on a deeper level for personalization, and only 21 had some level of personalization included in their online presence.

Along with personalization, segmentation of credit union audiences was also lacking. Those segments (which can include different audience targets and even primary navigation that helps those looking for Business Personal, and Wealth Management insights and products) were considered “well-defined” in just 30% of the website content analyzed by Finalytics.ai.

The Role of Security in the Digital Experience

Part of a credit union’s digital transformation strategy in 2023 and beyond will need to include the way we talk about and protect our members’ data and information. In the Finalytics.ai study, they found that security and privacy content consists of two primary areas: the credit union side (what they’re doing to protect their member information) and the user side (what your members can do to protect their own information).

One way to improve this score, Finalytics.ai found, was to increase the visibility and access to information pertaining to cybersecurity and personal data and banking best practices. If your credit union doesn’t already have a dedicated and highly visible area for users to find tips, tricks, and instructions for safe ways to use your apps, website, and other mobile or online banking offerings, it’s worth the investment to create those resources for your members.

It’s also important to communicate often and stay consistent with your messages to members about the state of your cybersecurity and other digital transformation strategy items. Transparency and honesty can often close the rift for prospects: if you can show your members and potential members that your credit union is committed to offering a similar level of protection that big banks can, it goes a long way in building trust in your brand.

Keeping the Momentum Going

Trust is the key to member satisfaction, and that means being intentional and transparent with your credit union’s offerings and operations this year.

Some exciting and positive findings in the Finalytics 2023 Credit Union Digital Experience Report include growth in all of the following: loans outstanding (16.2% increase year to year), shares and deposits (up 8.1%), and net worth (10.8% growth).

Finalytics.ai also had some insights into the top digital services members value and desire the most, which include:

  • Remote deposit capture
  • Digital cards that can be issued directly to a digital wallet
  • P2P payments
  • Digital wallets
  • Cardless cash withdrawals

With all that emphasis on increasing digital access and solutions, you’ll need powerful data and security solutions, and IMS has you covered.

With our IaaS (Infrastructure-as-a-Service) solutions, you can configure resources to meet your CU needs. You can skip the pricey setup and installation of an in-house data center and trust your members’ data to our self-service, enterprise-grade cloud IaaS that was built to meet your credit union’s dynamic needs.

Banking Trends: Digital Credit Union Services Poised to Dominate in 2023

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Just as 2022 was poised to increase stability and purchasing power after a few years of pandemic-fueled volatility, we saw record highs in inflation rates, as well as ongoing labor and supply shortages.

With this potential for continued turmoil as we move into the new year, we wanted to talk about some of the banking trends we see gearing up for a big year in 2023. From multi-cloud banking to analytics and other technology upgrades, here are some of the most touted digital credit union services poised to dominate in the coming months.

Application Modernization & Repatriation

The last several years have brought about a renaissance for credit unions to suddenly have embraced more modern digital solutions and technology. The use of apps is not a new practice, but the digital credit union services that are being hosted or run through these apps may have changed drastically for your credit union since 2020.

And the theme for 2023 in digital banking trends seems to be “renewal.”

Many credit unions and financial institutions are heading back to those recent digital upgrades and auditing or augmenting them for their current member needs. Many technologies were implemented hastily, in an as-is fashion. “We’ll go back after the pandemic and improve them,” we said.

Now is that time. Are your credit union apps and other digital services optimized for 2023? There are several ways to examine this.

The first is to take a look at how many updates have been pushed through to those technologies and what those updates were for: did you improve usability? Security? Have you fixed any bugs or slow-loading pages in these online or mobile solutions? Now’s the time to take a look at what value your newly implemented technologies still hold for your members.

A 2022 report showed that 99% of financial services organizations are modernizing apps in the next year.

Another app-focused trend in regard to digital credit union services includes app repatriation. App repatriation (and cloud repatriation as a whole) is the practice of reclaiming apps (or other data and software) from a public cloud and putting it back onto local servers.

This is being done partially due to rising costs in cloud computing and software, and also because these apps perform more efficiently when hosted on local networks instead. Though there are several drivers in the move to repatriate apps, it’s continuing to gain momentum as an industry practice as we head into 2023.

Multi-Cloud Banking

As some financial institutions are moving certain data and apps out of the cloud, many others are working through the kinks that come with multi-cloud banking integration.

Data privacy and accessibility are the main drivers for the move to multi-cloud banking. With a multi-cloud approach, your credit union can benefit from vendor diversification, improved performance, and cutting-edge updates and capabilities.

According to Data Science Central, the top benefits of multi-cloud banking include:

  • Operational consistency
  • Regulatory compliance
  • Data security
  • Adaptability

Balancing Security & Performance

The importance of maintaining great cybersecurity solutions for your credit union as well as optimizing member performance can sometimes leave your CU’s leaders feeling like this is one balancing act that you can’t ever get 100% right.

As we move into the new year, digital credit union services are being audited for their security and their user-friendliness, though these two practices are often at odds with each other.

Two-factor authentication is always going to be safer than using a simple username and password, but it also makes the member experience a bit more frustrating. Straddling both worlds is tough, but digital transformation is all about creating forward momentum with the best digital solutions. In fact, one-third of decision-makers in the banking industry say they would trade some of their security for a small (less than 25%) increase in performance for member-facing technology!

Implementing low-friction tools like IMS’s backup, disaster recovery, and compliance solutions can help keep your vulnerabilities low and your members happy with their low-friction experience.

Emphasis on Analytics

If data is the key, then analytics is the house that it unlocks. There are tons of possibilities for insights and growth in each data set, depending on how you choose to arrange and analyze it.

There are tons of digital credit union services that would benefit from your own credit union’s deep dive into what your member and operations data can tell you. Big banks can often follow larger trends with ease, but your CU’s member base may have specific needs that aren’t being met – you may be literally sitting on opportunities that you haven’t discovered yet – and they’re just hidden in your data, waiting.

Advanced analytical tools can assist you with data discovery, compliance, visualization, and more. There are many data opportunities that can be turned into profitable insights, help you streamline your internal reporting, improve lending assessment processes and accuracy, and even identify more risk indicators.

You can improve your credit union’s loan performance by leveraging industry insights with the data from loans you are approving, collecting on, and rejecting.

Up Your Analytics Game for the New Year with Data Discovery from IMS

Simply possessing data doesn’t help your credit union. Your ability to analyze and interpret that data, however, can offer a comprehensive and insightful look into member behaviors, issues, and preferences.

IMS offers data discovery help through the IMS DataArchiver, a data management system delivered as a SaaS solution for your New Year’s goals. It offers on-premise and IMS cloud storage, ransomware protection, data compression and de-duplication, all within a customizable, user-friendly UI.

A new year often means new technology opportunities. What are you waiting for? Reach out to us today!

Cybersecurity Best Practices for Credit Union Lending

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Your credit union members are likely more worried about making sound and safe financial decisions, especially as housing and living costs rise with an unprecedented hike in inflation. In the last several decades, these costs have quadrupled in most areas of the country, while wages have yet to even double. That means your members and prospective members are looking for smart and secure lending options.

July through September is the peak lending season for most financial institutions, and you don’t want to alienate prospects by employing less-than-optimal lending cybersecurity.

There are several ways to incorporate cybersecurity into your credit union lending process and practices.

Start with a Good Foundation – Or Build It

Large, for-profit banks are the only organizations in the financial sector that can afford to create a proprietary system for loan processes. The rest of us, including your credit union, must rely on strategic planning, and smart tools.

Lending cybersecurity, like cybersecurity in other high-risk industries, can’t successfully rely on DIY programs to create a solid digital wall of protection around networks and systems within it.

Your cybersecurity program should have all-encompassing strategies, not just piecemeal solutions. Think of it this way: while you can build a boat with several hundred pieces of wood or metal and create a strong enough hull for the boat to float, you’ve now got hundreds of seams and potential cracks just waiting to be breached. Whereas, if you create the hull using something more akin to one seamless piece, your chances of water seeping in are much lower.

A good foundation includes things like reviewing your current digital landscape and cybersecurity. The first step is looking for potential security gaps. These gaps can be interwoven throughout this landscape: in data collection, storage, and encryption protocols as well as third-party vendor interfaces, mobile apps and platforms, servers, cameras, social media accounts, and more.

These things need to be audited regularly, starting from the first days of your newly integrated systems.

Simplicity is Key – But There’s a Limit

Lending cybersecurity mainly relies on the implementation of practices, education, and technology solutions that minimize the risk of a cyberattack. If you have fewer holes in your systems, that a hacker will find a way through them is going to be much smaller.

That’s why simplicity in your lending practices and tasks is key. The loan process is complicated by nature, but the more seamless you can make it for your members and your staff, the better the outcome will be.

User error is often touted as one of the most common causes of data breaches. The goal of your loan programs and the steps you employ to carry them out should be to create a user-friendly experience without skimping on network security and other precautionary measures.

For example, employing multi-factor authentication in parts of your data and lending information collection process is inherently more complicated than single-factor authentication, but you are trading safety for convenience. Two-factor authentication is still the best choice when it comes to collecting and storing lending data.

Finding the balance between “easy-to-use” and “optimal protection” should be the simple target you aim for in credit union lending cybersecurity.

Here’s a great article from Medium about cybersecurity in the mortgage process. It goes into more detail about how complexity is the “worst enemy of security.”

Automating Compliance Increases Lending Cybersecurity

Lending cybersecurity is not the only way to protect your credit union loan processes. In fact, much like the risks for cyberattacks have increased, lending compliance issues are also on the rise.

Because compliance is crucial to the efficacy of your credit union, maintaining that credibility should always be a top priority regardless of whether your credit union is growing, merging, or simply focused on optimizing current business operations.

There are several benefits to automating your compliance tasks. Automation is primarily used to ensure that there is no impact to normal operations and production. There is also no learning curve – compliance automation means machine learning drives for you – it is constantly improving and identifying potential violations of internal compliance policies by tracking sensitive data nd where it goes.

By automating your compliance processes with tools and software like IMS’s Polaris Sonar, you can quickly reduce sensitive data exposure without having to add to your current infrastructure or allot employee time towards completing these tasks.

Anomaly Detection – Recover Faster

Cyberattacks on financial institutions are inevitable – your credit union holds a wealth of assets and hackers are always looking for ways to exploit your security systems to take some of those assets for themselves.

And with ransomware on the rise, it’s important to implement the most effective strategy for recognizing ransomware attacks early and defending against them.

IMS has anomaly detection solutions with Polaris Radar to track your data changes over time, replace manual recoveries for minimal business disruption, and increase intelligence with machine learning.

Make sure your credit union lending and all financial data is never used against you for ransom. Learn more about partnering with IMS today by requesting a consultation.

CU Tips for Serving the Unbanked & Underbanked

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The Federal Reserve has reported that 22% of US adults are unbanked or underbanked. And one of the top reasons Americans report not wanting to put their financial assets into the hands of banks and credit unions is because they don’t trust them.

But this puts credit unions at an advantage over big banks – many Americans struggle with brand trust, especially with for-profit brands. Credit unions are financial institutions that only exist to serve specific communities, industries, and areas. Here are some tips for using your credit union to better serve the unbanked and underbanked.

Build from Your Foundation

As we mentioned, credit unions are built on brand trust – they are non-profit organizations owned by their members.

The first thing you should be doing is educating your communities (both in-person and online) about these advantages. It’s hard for the unbanked and underbanked to have the same trust issues with your credit unions when they, as members, are the owners and primary beneficiaries of your products and services. As more and more people become distrustful of big business, it’s important to remind your members and non-members alike that you are here for them.

Regain Market Share from Payday Lenders

According to a recent article from the Credit Union Times, unsecured consumer loans account for less than 10% of credit union’s loan portfolios, but make up 100% of the portfolios for payday lenders. The article posits, “one could argue that payday lenders are already making more money serving the underbanked than credit unions serving the banked in the same product category.”

By using your recently-implemented online products and services at your credit union, you could take back this market share and still make a good profit, even by offering loans that cap at 18% APR. Compared to the 400-500% being charged by payday lenders, this not only can help you generate more business for your credit union, but it also offers unbanked and underbanked individuals a great opportunity to start building brand trust. This could even lead to more of these people choosing to become members of your credit union.

Focus on the Needs of Low-Income Communities

Most unbanked and underbanked individuals are found in lower-income communities. While that community may only be a part of the areas you serve, it’s still important to create connections within it.

A great way to foster those connections is to partner with local non-profits. These organizations operate as food banks, community centers, minority-led professional associations, and other businesses.

Focus on creating business relationships with non-profits that can help you grow your membership while you help them get their products and services more attention.

You can offer financial literacy and education classes at local community centers or set up a booth at a community event to offer quick budgeting consultations to underbanked and unbanked individuals. And then you can put out donation jars or other marketing materials from your non-profit partner. You can also feature them at your next community event or become a sponsor for their next program.

Part of expanding your services to the unbanked and underbanked is meeting them where they are.

Re-Examine Your Minimums and Other Fees

According to a detailed paper from The Clearing House, thee of the top four cited reasons people do not have a bank account include:

  • Not having enough money to meet the minimum balance requirements
  • Don’t trust banks
  • Bank fees are too high

These issues have the potential to be solved through a re-examination of your credit union’s current fees, minimum requirements, and other potential barriers to entry.

The unpredictability of these fees also drives away the unbanked and underbanked. In a study cited by the paper, one of the main reasons people choose payday lenders (whose services virtually always cost more to use than a bank or credit union) is because many check-cashing customers “preferred to pay predictable flat fees they understand, rather than incur unexpected charges.”

Simplicity and transparency are worth more than stability in their finances. These brand trust issues run deeply through the unbanked and underbanked, and that distrust has to be addressed by your credit union if you hope to grow your membership.

Use Your Expertise & Assets to Educate

Part of what keeps people unbanked and underbanked is the distrust in the motives of financial institutions. Historically, those with fewer or less reliable assets are preyed upon by banks who look to hike interest rates as well as other penalties and fees. This creates a cycle that keeps unbanked and underbanked individuals in their current situation. And partnering with a bank that doesn’t have their best interests in mind only perpetuates and exacerbates the debt cycle for these people.

To help bridge the gaps between your credit union and the unbanked and underbanked populations, you can use your expertise, educational resources, and online assets to create connections with these individuals.

Even just running a few marketing campaigns online and via social media could pull in new prospects that have unique needs your credit union is already able to assist with.

Next-Level Credit Union Solutions

Unbanked and underbanked individuals may not bring record-breaking cash amounts into your business, but it’s important to serve this subset of your community to create more diversity in your membership. It’s also a great way to show your members that serving them, in any capacity, is your credit union’s top priority.

When serving your members is your main concern, it’s easy to push other things aside, like data management, backups, and disaster recovery, or IaaS. At IMS, we are created to provide you with the private cloud services you need to keep your operations running smoothly. IMS uses the premier backup solution for credit unions, which can give you peace of mind as you work to improve your credit union for your staff and your members.

How to Embrace the Future of Digital Banking

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When we talk about the future of banking, a lot of that future is rooted in the digital transformation that will take place in the next several years. Online loan applications, cryptocurrency – these services and more will be the differentiators for success as we move through 2022 and beyond. Here’s how your credit union can embrace the future of digital banking.

What Is Digital Banking?

Digital banking used to mean your members could log into an online account to see their balances and perform funds transfers from one financial account to another. But today, digital banking has expanded so much that your members rarely – if ever – have to visit one of your physical locations to perform any financial activity that will be run through your systems.

It’s not just about convenience, digital banking is about ultra-convenience for your members. Netflix, Amazon, and social media sites use data and other digital tools to make every user’s experience highly personalized – this is becoming a standard to which all B2C businesses are expected to reach in order to maintain member satisfaction.

Embracing Embedded Banking

You don’t have to leave your house to get groceries, prescriptions, Christmas presents, dog food, or to pay your mortgage or car payments anymore – and members like it this way. That one-stop-shop website model is becoming the expectation for your members. Embedded banking may seem like a complex phrase, but it just means that your members are doing their banking without having to visit a bank or credit union website, app, or physical location.

An example of embedded banking is the presence of mortgage applications and services being promoted on real estate sites where your members are browsing available homes in their desired area. Rather than creating financial services that must be accessed separately from the need they are born from, we’ll see more and more companies partnering to allow for end-to-end transactions. You can go to a car dealership and get a loan right then and there through partnerships between the dealership and their chosen financial institution, and savvy consumers will gravitate towards that all-inclusive model because it’s more convenient.

Facial Recognition

One of the fastest-growing authorization tools for financial accounts is biometric access. This includes fingerprints and, most recently, facial recognition. 15% to 20% of US financial institutions are already using facial recognition, coupled with other best practices when it comes to multi-factor authentication, to give members access to their financial information online.

Virtual Branches

The need to “speak to a representative” will never go away. People still like talking to and connecting with real people when they give a business their patronage. Since the start of the pandemic, virtual branches have become increasingly popular as a way to bridge the gap between in-person interaction and the convenience of digital banking solutions.

Virtual branches are digital platforms that simulate the conversation that occurs in a regular branch and rely on diverse communication tools like web, mobile chat, video, co-browsing, and document or screen sharing, according to American Banker.

Infrastructure-as-a-Service: Serve Members While We Cover Your Servers

Your data, servers, and digital banking operations shouldn’t need babysitting. That’s why IMS offers configured resources that meet your unique needs through Infrastructure-as-a-Service. We tailor our program to your specification to ensure our solutions are straightforward, flexible, and pay-as-you-go so you can take advantage of premier cloud services at affordable prices.

Browse these and other offerings here on our website or contact us today!