Todd Clark, president/CEO of CO-OP Financial Services, discusses how credit unions can keep up in today’s digital world.LAS VEGAS – Credit unions must retire the phrase “digital strategy.” In a world where apps like Uber and Airbnb are setting the bar for consumer expectations, credit unions should focus on simply having a “strategy” that involves thinking about things from a digital mindset.
To succeed at this, executives must first employ people at their credit unions who have a digital mindset; second, adopt a “mobile-first” philosophy when it comes to developing products and services; and third, look at what they’ve traditionally done and figure out if there’s a way to do it digitally and faster.
Those were the key points driven home by Todd Clark, president/CEO of CO-OP Financial Services, in a breakout session called “Preparing for Digital Transformation” and follow-up interview with CU Times at CUNA’s America’s Credit Union Conference Monday.
“Do you think Amazon has a digital strategy group?” he asked. “Everything they do is digital. Digital is the new reality.”
The shift to digital has raised the bar for consumer expectations – for example, Clark noted 76% of consumers expect organizations to understand their individual needs, 68% anticipate organizations will harmonize their experiences, and 82% stopped doing business with a business after a bad experience versus 76% in 2014 (according to data from the IBM Institute for Business Value, Kleiner Perkins and Walker/Financial Brand).
In delivering digital services, credit unions must realize that offering members a speedy, agile and frictionless digital experience will enhance their status as a primary financial institution for their members, Clark said. To support that point, he explained that JPMorgan Chase saw an 18 percentage point increase in the percentage of households who are digitally engaged in the past four years. What’s more, digitally-engaged households are easier to retain than other households by 11 percentage points, and credit and debit card spending for the digitally engaged is 91% higher than for others.
Unfortunately, not enough organizations are acting on the urgent need to adopt a digital mindset, Clark warned. Citing MIT, he pointed out that while 90% of CEOs believe the digital economy will impact their industry, only 15% are executing on digital strategy.
“I would say more than half of the credit union attendees who were in this room don’t offer the ability to open an account online,” he told CU Times after the session ended. “To them, I say it’s time to move.”
In an effort to give these attendees a wake-up call, Clark outlined impressive growth stats from digital finance company SOFI, which advertises a philosophy similar to that of credit unions, after just seven years in business: $19 billion in loans funded, $1.45 billion in member savings and 300,000 members.
“[SOFI] doesn’t have a single brick and mortar branch, they don’t want one and they will never have one, and they are taking our members by leveraging digital,” Clark said.
Clark also emphasized the ways CO-OP is working to help credit unions gain traction in today’s digital world. These include:
- Helping make credit unions top-of-wallet and capture every transaction;
- Using data to better understand member behavior and anticipating their next moves;
- Expanding fraud protection capabilities by allowing credit unions to write their own rules and do it in real-time, and offering better enrollment and authentication solutions; and
- Releasing shared branching reports that give credit unions insight into all the places their members are completing transactions.
“We are working to design products and services for credit unions of all sizes,” he added.
