Those of us who have the privilege of working with credit unions know one consistent truth: Credit union members want to feel a part of the business that they trust with their money. Their financial journey is very different from that of customers of a standard bank, as they want a different level of engagement and sense of ownership in each of their transactions and interactions.
But another truth has emerged over the last few months – COVID-19 has created major, lasting changes in banking habits across America.
Acceptance of mobile banking by consumers and families has been on a slow but steady increase for more than a decade. But with the arrival of the first stimulus checks as part of the CARES Act, mobile banking usage soared to unprecedented levels as sheltered-in-place Americans of every age and social demographic turned to their phones to check if their stimulus payments had arrived.
Perhaps most interesting from our perspective was the spike in new mobile banking registrations that we saw among our clients. On Monday, April 6 – the original target date set by President Trump for stimulus funding disbursement – new mobile banking registrations jumped by approximately 200% over the daily average in March. This dramatic increase represented individuals who had never used mobile banking in the past and who, during lockdown, have gone to the trouble of setting up a mobile banking registration for the first time.
Similarly, millions of Americans found themselves in need of accessing and moving those vital stimulus funds, but social distancing requirements meant that financial institutions including credit unions, which are well established as pillars of their local communities, were required to close their doors.
The combined need to check and transfer money easily, while doing so remotely, has significantly changed consumer behavior. Bank customers will now avoid calling customer service or relying on an ATM or branch to check their account balances. We expect more bank clients to use their mobile phones to send money to friends, and use other online platforms to transfer money between accounts, pay bills, deposit checks or anything else they would previously visit a branch to do, before social distancing and stay-at-home orders affected wide swaths of the country.
What does this mean for credit unions?
For years, digital and mobile banking technologies have been considered a “nice to have” for credit unions. As long as traditional brick and mortar branches were the cornerstone of service, investing in the newest technology for the sake of trying to keep up was not an option.
But in a matter of weeks, these technologies have changed from being a “nice to have” to a “must have.”
After the current crisis abates and lockdown orders are relaxed, familiarity with new ways of managing finances will mean that more U.S. consumers than ever before will be using their mobile devices to handle a much wider range of banking and payments needs than before the pandemic.
This gives credit unions an opportunity to revisit their approach to member service. In the past, enhancing the member experience has traditionally been focused on offering smart, up to date branches and excellent in-person service. But now, enhancing member experience must include user-friendly security features, such as online and mobile debit card controls, that allow consumers to turn their cards on and off. Also, secure document sharing and secure messaging make communications between financial institutions and their customers or members easier and just as personal, but a lot safer.
Similarly, as well as changing the way they do business in the branch, consumers are relying more on mobile wallet capabilities – pairing up Apple Pay, Google Pay and PayPal to make digital payments as well as ATM wallets so they can access cash without the use of a physical card.
These shifts in mindset and behavior are catalyzing tech adoption for credit unions. The way people interact with financial services has changed significantly and suddenly, and the long-term impact will be felt by financial institutions at all levels. The most effective solutions to these challenges will be ones that put consumers first, in a way that enables credit unions to remain distinct and retain their core values. Adjusting to one truth does not mean forgetting another; rather it is finding the solution to making them work together.
Bill Hampton is Division Executive, Credit Union Division for the Jacksonville, Fla.-based FIS.