Once upon a time, in 1979 to be exact, there were more than 10,000 million-dollar-asset credit unions dotting communities all over the country and only three that held assets in excess of one billion.
Today, those numbers have flip-flopped in a flurry of merger activity. Drive through any town, and you’ll see 9 out of 10 small credit unions are gone, gobbled up by other credit unions. Mega-sized credit unions have jumped from that lonely three in 1979 to 350 in 2021, with no signs of slowing.
It’s understandable. Technology advances drive members to want and expect more across all industries, including their banking. Members want more personalization, intuitive service, seamless experiences and conveniences across whatever channel they are using at any given time.
Credit union member satisfaction dropped two points in 2021. At the same time, satisfaction with their digital/online bank grew two points.
Smaller institutions are at a natural disadvantage because re-engineering infrastructure for innovation is expensive. Many smaller credit unions simply can’t shoulder the cost of rearchitecting their tech stack. They can go one of three ways - merge with another like-sized credit union to survive, be acquired by a larger institution or fight for independence by building an ecosystem of fintech partners to fast-track new offerings and capabilities faster and at a competitive cost. All three are happening at a rapid-fire pace.
As credit unions scramble to improve member experience with mergers- to soften the cost of innovation investment - the ironic fact is members are now reporting less satisfaction.
According to the February 2022 report, “Credit Union Innovation: Responding to Member Demands for Digital Financial Services,” when members were asked the top reasons they were satisfied with their credit union, a significantly lower number choose “easy to deal with” as their top choice, plummeting to 7.5% in 2021 from 10% the year before.
As Financial Brand notes, it’s difficult to argue against the economics of scaling operations through mergers and acquisitions or through the building of ecosystem third-party partners. So the question becomes how do you insulate members from feeling every bump in the road that comes with trying to integrate different systems, different processes, technology, platforms, teams, cultures, and partners whether in a merger or because of partnerships? Or asked another way, if mergers and acquisitions in the credit union world are as inevitable as they seem to be, how can the institutions ensure the very decisions they are making to improve member journeys aren’t, instead, making service worse?
A new technology, Customer Experience Management or CXM, has emerged on the heels of this rapid innovation to solve for fragmented buying, onboarding and servicing and support journeys, fueled by growing complexities and different parties that each deliver a slice of the member's journey. It’s being rapidly adopted across credit unions as well as other industries that face a growing web of systems and people. These challenges often come to light only when the organization’s KPIs begin to slip and metrics like churn and attrition jump and satisfaction numbers drop.
OvationCXM’s flagship platform, CXMEngine is the first technology to optimize member journeys in the moment, not after the fact. Through modules, like Connections, it brings customer information together in one screen from all of the distributed and siloed platforms in the credit union and across the partner ecosystem.
A holistic shared view allows internal and partner teams to collaborate because they can view a member’s progress in a journey, provide support and ensure they are being serviced well from end-to-end, even when parts of the journey are delivered outside the credit union. With OvationCXM’s pre-built marketplace of connectors, most credit unions can be up and running, out of the box, in less than 90 days, with no re-engineering of the tech stack needed.
Instead of changing the tech stack, CXMEngine allows credit unions to change and optimize how their members experience their tech stack, for the better. One financial institution reported a 50% increase in its NPS scores in under one year and a 10% increase in revenue, 25% decrease in attrition and a 60% boost in employee satisfaction.