Give Members a Home Experience Not a Mortgage

Anne Legg, Director of Client/Market Strategies, AdvantEdge Analytics

As technology continues to transform the lives and expectations of members, they increasingly turn to businesses that can provide them an end-to-end solution combined with a customized experience, before they may even know they need it. To achieve this, the credit union needs to provide a Platform, Personalization, and Prediction.

Platform

A platform is a group of technologies that are used as a base upon which other applications, processes or technologies are developed. Think of an iPhone. It is a platform for many processes, such as email, phone, movies, games etc. To carry the concept of a platform to a credit union, the products are the deposits, loans and services and the member is the base. So, the member experience is the platform.

A member requires shelter with adequate proximity to work, family, “play” and space for family and their belongings. The member fills this need with a home. Not a home loan. A loan does not exist in the target neighborhood. Their loved ones do not live in a loan. The loan does not contain their prized collections.

Traditionally, credit union members have compartmentalized their home experience. They go to one source to find a neighborhood, another to find the home, yet another to find the loan and then even another to furnish/improve the home. And it can be a lot of work and include a lot of uncertainty. In the platform, the credit union brings all these sources together in an app ecosystem (see graph below )and creates the “home experience.” The credit union can guide the member through the entire home experience, providing an exceptional experience that would be real value for them.

The platform as a business model is powerful because it uses technology to connect people, organizations, and resources in an interactive ecosystem where amazing amounts of value can be created and exchanged.  This experience involves the features and benefits of the home itself, ownership properties, maintenance, as well as the community of homeowners who share their experiences on solving home problems.  And, of course, there is the financing of the home.

Prediction

Notice the first step in the home process (pictured): find a home.  Traditionally, credit unions have not been deeply involved in this process.  Obviously, there is business value in getting out ahead of the competition.  Courtesy of our connected world, members reward those businesses that do…those that can give them what they need before they need it.

With big data, specifically leveraging predictive analytics, credit unions are in a position to identify when moving might be an important consideration for a member.

  • Life trigger events: Has your member recently had a baby? Switched jobs? Retired?  All of these life events frequently associated with moving can be uncovered.
  • Purchase behavior: Is your member regularly shopping and playing far from their current home?  This might be an indication that their current location is no longer ideal for them.
  • Relative financial situation: Is your member’s income or net worth significantly higher than those in their neighborhood?  This might be an indication the member would be open to a move.

Personalization

This same big data can also be used to personalize the experience.  Having a baby? Let’s include recommendations for baby-proofing your new home.  Moving closer to your new job?  Let’s connect to title companies conveniently located in that area. Retiring? Maybe the right loan for you is less than you qualify for, given your current income bracket.

But there’s more.  As users interact with your new technology, they reveal more and more of themselves.

  • Are they looking at small houses even though they could afford more? Perhaps a “jewel box” house is for them.  Let’s connect them with others who have downsized in style.
  • Do they shy away from older homes that meet all their needs? Let’s connect them to contractors, those well-regarded by others in the ecosystem community.
  • Are they looking for builder contractors? Perhaps it’s time to engage them with a home equity loan discussion.

For endless scenarios, these member insights gained from connected data will allow credit unions to shift from being a provider of commoditized products to that of a member engagement ecosystem host.  More importantly, you are providing value to their lives while they are returning value to the credit union.

What’s Next

The examples above are just for the home experience.  It could just have easily have been based on one of the other five member needs: the auto experience, the vacation experience, the learning experience, the savings/senior living experience.

But credit unions should start small and create a member experience for just one, learn, and refine.  Credit unions will be amazed at how this shift from product to platform allows them to collaborate in ways they just can’t imagine now.

Learn more from Anne during her recent podcast “Quantifiable Self and Zero User Interface.” Anne addresses why these concepts are becoming increasingly important to credit unions. Members rely on technology to help them make healthier, smarter, and more successful decisions. With your credit union’s vast access to data, you are in a unique position to deliver this experience to members.

 

Top Auto & Home Insurance Trends to Watch in 2018

By: Corrin Maier, Vice President TruStage Partner Management, CUNA Mutual Group.

The 2017 insurance marketplace assessment by CUNA Mutual Group revealed six major consumer auto and home insurance trends you’ll want to keep an eye on in 2018 that impact everything from consumer experience and pricing to how credit union members may buy insurance in the future.

Here’s a high-level outline of what we discovered:

  1. The shift to direct purchasing is real: more and more, people are using direct channels over face-to-face.
  2. The online channel is still largely used for research, but buying is behind projection – most shoppers move from online to offline.
  3. More often, consumers get the best carrier through a single experience and are increasingly open to shopping in non-traditional spaces such as auto dealers and other retailers.
  4. The decision to shop is more frequent and driven primarily by rising prices.
  5. The Internet of Things (IoT) is supporting a move toward personalized pricing, based on driving behavior, home data, and more.
  6. Increasing use of ridesharing services puts negative pressure on premiums.

In our recent webinar titled “Top Auto & Home Insurance Trends to Watch in 2018,” we dived deeper into the causes and effects of these trends, and you can view it on our Preferred Partner Page of the NAFCU website.

Among other learnings presented in the webinar: insurance carrier profitability and growth rate are highest among those focused on direct channels. At the same time, online bind rates are generally low, as the consumer experience is still under-optimized. Source: SNL

CMG logoCUNA Mutual Group is the NAFCU Services Preferred Partner for Analytics, TruStage® Auto & Home and Life Insurance Products. More information and educational materials are available at nafcu.org/CUNAMutualGroup 

©2018 CUNA Mutual Group, All Rights Reserved.

Insights from the Non-Member and Driving Credit Union Engagement

By: Brian Werger, Director, TruStage Insurance Program, CUNA Mutual Group.

At the annual Discovery conference in August, CUNA Mutual Group Chief Economist Steve Rick predicted ongoing economic growth into 2018. Even with new car sales slowing from an 18 million-per-year peak and increasing interest rates, credit unions will continue to benefit from the second largest economic expansion in U.S. history. But, it won’t last forever. Rick stated that credit union membership growth will slow to 3 – 3.5 percent through 2018, due to slower job growth and slower lending trends.

This potential decline points to increasing focus on expanding membership. Recent research from TruStage® CUNA Mutual Group’s consumer insurance brand, examines an often-untapped opportunity for credit unions to grow. “What Matters Now®: Insights from the Non-Member,” is a deep-dive into non-member and under-engaged member mindsets, lifestyles, attitudes, and habits. These crucial insights can be invaluable tools for your credit union to reach this audience. Watch the recent webinar for a breakdown of the research here. 

Who are non-members?
Only 22 percent of hardworking families surveyed were fully engaged credit union members, meaning they consider their credit union their primary banking institution.* The other 78 percent of hardworking Americans fall into three areas of opportunity for membership growth: partially engaged members, disengaged members, and true non-members.*

Partially engaged members acknowledge that they are a credit union member, but say that their primary banking is done elsewhere. Disengaged members have credit union products, but don’t consider themselves to be credit union members (and note that only a small percent of this group were members via indirect loans). True non-members have no credit union affiliation at all.

Diversity impacting behavior
Among its key findings, the research revealed prominent levels of diversity among the three opportunity segments, which were more likely to be a Millennial or from a race other than white (vs. the “engaged member” population). These segments put a high value on brands that reflect their cultural identity, and that they were more likely to choose a financial institution based on a personal recommendation. This will be significant to credit unions aiming to grow membership in an economy where over the last 5 years, multicultural consumers accounted for 92% of US consumer growth, and whereby 2020, multicultural consumers will account for 98% of growth.

Recommendation: Add engagement level to your segmenting
Most credit unions already segment their targeting efforts based on demographic factors; an engagement filter can be a valuable addition. Take a closer look at the disengaged members. The What Matters Now research showed that this was the population with the highest propensity to make the credit union their primary financial institution in the future.

For more insights gathered by the What Matters Now research program, watch the recent webinar here. 

CMG logoCUNA Mutual Group is the NAFCU Services Preferred Partner for Analytics and TruStage® Auto & Home and Life insurance products. More information and educational materials are available at nafcu.org/CUNAMutualGroup 

Delivering Convenience Is Anything But Easy

By: Mark T. Nelson, CUNA Mutual Group.

Meeting your members’ demand for convenience is changing the dynamic of the credit union/member relationship. Members want to do business when, where and how it best suits their lives, and that may not be around your office hours or locations.

You may believe you know your members better than anyone. You may think the loyalty your relationship is based on is stronger than the appeal of competitors. And, you may think you’re already meeting their expectations and delivering a member-friendly customer experience.

But, there are a few problems with those assumptions. Loyalty only gets you so far. At some point, convenience becomes more important. As technology empowers people to manage their busy lives, they’ll inevitably gravitate to the path of least resistance as long as it delivers value and meets their needs.

In fact, a Chief Retail Officer at a large credit union recently said, “Most members are loyal to their credit unions. They want to do business with them, but convenience trumps that.”

Also, don’t confuse your vision of convenience with your members’ vision. According to an IBM study, 62 percent of retail banking executives surveyed said they deliver an excellent customer experience. But, just 35 percent of their customers agreed.

As a credit union, your challenge is how to compete in today’s technology-driven world. You need to adapt quickly and often to satisfy changing consumer demands and deliver a convenient experience. As a result, you may have to divert time and resources from other priorities.

For example, providing a new digital product or channel involves a number of considerations, including:

  • Technology expertise
  • Financial investment
  • Data security
  • Compliance issues
  • Ongoing maintenance

And of course, you must address these issues while meeting the ultimate objective – making it easy for your members to do business with you.

While delivering convenience is vital to meeting your members’ expectations, it’s a never-ending process. With the technology revolution continuing to pick up speed, you can feel caught between a sense of urgency and taking a measured approach.

Overshadowing everything is the need to get it right.Your members trust you to get it right. If you don’t, it’s now easier than ever for them to take their business to a competitor who does.

Click here to watch our recent webinar to learn how your members are driving innovation and changing your world.

CMG logoCUNA Mutual Group is the NAFCU Services Preferred Partner for TruStage® Auto & Home and Life Insurance Products and Mortgage Payment Protection.
More information and educational materials are available at nafcu.org/CUNAMutualGroup 

Succeeding in Today’s Convenience Economy

By: Jenn Burkmier, CUNA Mutual Group.

The Convenience Economy

Consumer demand for convenience is driving unprecedented advances in technology. Innovation is everywhere, from new devices to start-up ventures. And, most of it aims at helping people manage the technology that keeps them always-on and on-the-go.

In this climate of convenience, businesses that simplify the customer experience are succeeding. For example, the explosion of cable TV providers and channels has made watching television overly complicated. Solutions like Netflix simplify the experience, allowing viewers to watch what they want when they want. It stands as an example of adapting in today’s convenience economy.

Meeting this ever-growing demand for simplicity is especially important for credit unions. As one industry executive said, “Our real competition is convenience.”

How to Succeed

Meeting your members’ demand for convenience is changing the entire dynamic of the credit union/member relationship. Face-to-face engagement is on the decline. Members increasingly prefer conducting business when and where it suits them, not around the credit union’s office hours or locations. Staff needs to be equipped to make the most of every interaction, in-person or online to effectively serve members and achieve your strategic goals.

As more transactions move to digital channels, successful credit unions will empower members to manage their finances as easily as possible. Three keys to success will be:

Three keys to success will be:

  • Delivering a streamlined, efficient end-to-end lending process to support credit union growth.
  • Using digital tools to engage employees and arm them to better meet evolving member expectations.
  • Understanding that data is a roadmap to tendencies and behaviors that focus on how you optimize member interaction.

Remember, convenience goes both ways. As easy as you make it for members to join and do business with you, they can just as easily leave.  Click here to watch our recent webinar to learn how your members are driving innovation and changing your world.

CMG logoCUNA Mutual Group is the NAFCU Services Preferred Partner for TruStage® Auto & Home and Life Insurance Products and Mortgage Payment Protection.
More information and educational materials are available at nafcu.org/CUNAMutualGroup