Innovation can be hard to define, but you can think of it as “the successful application of new ideas.” ‘Application’ is the key word there – new ideas are the easy part – figuring out which are the good ones, and then applying them successfully, is more difficult.
So innovation is more than just an academic exercise or a tally of patents. The application of a new idea in the real world leads to new products, services, processes, systems, or attitudes that improve something or add value. With all of the changes that are occurring in financial services generally, and in the credit union business model specifically, being (and staying) innovative is more important than ever.
Every year at the NAFCU Annual Conference we recognize the very best innovations among our Preferred Partners that help credit unions thrive in an increasingly crowded financial services marketplace with the 2012 NAFCU Services Preferred Partner Innovation Awards.
We had another exceptionally competitive field of entries this year, and the difficult task of judging was undertaken by the NAFCU Services Advisory Committee, which is composed exclusively of credit union executives. I didn’t envy them in the challenge of picking the winners, and greatly appreciate their bringing a real-world perspective to the value offered by the innovations. No surprise as to what is top-of-mind – all three winners have solutions that help credit unions with marketing and growth.
The Advisory Committee assessed each application against four criteria:
- Degree of innovation (up to 25 points)
- Impact on credit union bottom line (revenue enhancement, cost reduction, time to payback of any required investment; metrics) (up to 25 points)
- Overall value/contribution to credit union success (up to 25 points)
- Creates a sustainable competitive advantage for credit unions (up to 25 bonus points)
- Affinion – “BankMyRewards” – Affinion has created a custom branded and merchant-funded cash-back program for members, which – unlike other rewards programs – doesn’t sacrifice margin for growth. The program leverages Affinion’s national network of merchants as well as over 800 online merchants, including online gift cards, merchandise and travel rewards. Cash-back opportunities for members range from 4% for online purchases to 5% for offline merchants. The program has the additional positive effect of increasing revenue to the credit union via increased debit/credit activity and volume, as well as enhancing new account acquisition efforts and reducing attrition rates. More information at www.nafcu.org/Affinion.
- Deluxe – SwitchAgent™ – Deluxe has created a new ‘concierge’ service that works with members (new and old) that have opened new share draft accounts to help them migrate all of their automatic checking account transaction relationships to the credit union. Getting someone to open an account is often much easier than transforming it into their primary transactional channel, and represents the biggest hurdle in moving a new member from account activation to full account utilization. The solution is a blend of technology and service – Deluxe gathers information from the member via a live interview, then uses a patent-pending technology to switch automatic transactions from other institutions to the credit union. Credit unions using the solution have seen up to 32% increase in products per member, up to 64% increase in account activation levels, and in some FIs up to 90% increase in transaction levels. More information is available at www.nafcu.org/Deluxe.
- Discover – Marketing Platform – Given the explosion of alternative marketing opportunities presented by new technologies, coordinating the targeting of marketing campaigns across various platforms has become a challenge. Factor in the immediacy of many of these channels (Twitter, mobile, etc) and limitations of traditional analytics capabilities (next day or next week) lose their effectiveness for marketers. Discover has created a real-time marketing campaign management tool that enables credit unions to deliver targeted messages and offers via multiple channels based on real-time transaction data. The analytics are based on demographic data, member preferences, loyalty data and spend behavior. The Marketing Platform can identify spending patterns, determine member needs, and identify geo-locations. Delivery channels include email, text messages, direct mail, web, and mobile applications. The Marketing Platform provides the credit union with a high degree of control to credit unions, and drives revenue through increased credit card usage. More information available at www.nafcu.org/Discover.
Congrats to this year’s winners! Follow all the conference activities this week on Twitter at #NAFCUannual.
Post written by Dave Frankil, President, NAFCU Services Corp.