Credit Unions: Potential to deliver industry-leading digital engagement
Michael Common, CEO and Co-Founder of Nivo, shares his views on how credit unions can best innovate to improve processes.
From working with credit unions across the UK to improve their member experience, he has seen the potential for credit unions to be industry-leading in their digital engagement. Here are his tips to deliver great customer experiences:
During the early stages of Nivo, my focus was on how we can most easily give people access to the best financial services. I started by thinking about what financial services could be like if it actually worked for the people and businesses that consume it – and this is the most important lesson of delivering great customer experiences:
“Think about things not from your perspective, but from the perspective of your customers.”
People want financial services to be easy. They wanted as little friction as possible. They want to feel like the market was competitive, so they weren’t being ripped off. They don’t want to have to understand lots of complex information. They’d want advice to be quick and convenient, from qualified and trustworthy sources.The reality of the market is still the opposite. Getting access to financial products is hard. It requires lots of paperwork and time-consuming activities you have to go out of your way to get. To find a product there are lots of jargon and complex propositions to navigate.To deliver great customer experiences, all of this must be simplified. But how do you begin? A good way to start is:
“Don’t assume you know exactly what your customers want without proving it”
You can’t really know what your customers want – even after decades of working with them. What these decades give you is a good hypothesis to be proven.Whether or not you think your user will adopt a new process, you can find out with simple experiments. Only then you should you move on to testing a solution.Technology projects like Cornerstone and thousands of similar projects run by the government and big business are examples of the issues with huge technology programmes. They are built on unvalidated solution assumptions. They over-run and produce poor quality, if they produce at all.
Where do we see credit unions fail in their technology? Commonly in two assumptions:
Assumption 1: All I need to be digital is a website, online banking and an app at the best possible price
This is wrong because:
1. You probably don’t ‘need’ all these things.
Monzo, Revolut, and Starling are challenger banks that have now had hundreds of millions of pounds of investment. Yet none of them offer a channel other than a mobile app. Why? They’ve never identified that offering other channels has been a barrier to their hyper growth. In the early days, I was in a presentation with Monzo’s CEO and he spoke with pride on how much manual processing was happening in the back end. Monzo’s focus was on delivering great experiences to their customers, not on efficient operations.
2. All technology is not created equal, even when it ticks off all necessary features.
Technology is a highly complex and labour-intensive thing to develop. The best technology is the result of thousands of iterations based on user feedback.Beware of any tech provider who claims they have a solution that can do it all for a very low price. At best it is going to perform poorly at a lot of things. At worst, many capabilities won’t really exist.
There really is no reason in the modern cloud-based world why you can’t source very good technology for specific tasks. Economies of scale of solutions like Nivo mean it is used by many at a very good price.
Assumption 2: The most valuable role that technology can play is to automate rekeying activities
What members care about is their time. They want the way they interact with credit unions to be quick and efficient for them. More often than not, the way to deliver that isn’t through integrated services. There is much more value for them in enhancing their experience at the point of interaction.
By analysing your effort in your credit union today, you’ll likely find that a very small proportion of that effort is in rekeying. Integration doesn’t have value, therefore, to come first. We’d always encourage you to test technology unintegrated initially and get 90% of the value. The remaining 10% can then be covered off with integration.
This way you start small and simple, discover the benefits, then test new ways to improve - without committing to expensive digital transformation.So hopefully now you can see why I believe that credit unions can be industry-leading in the digital sector.