Oct 28 2013

Channel Delivery for Tomorrow

Report  
Number  
312

Consumers are interacting with financial institutions in new ways, with mobile channels the fastest growing. Yet sometimes people want the personal touch. Credit unions can only offer so many delivery channels, and this report helps prioritize.

Ben Rogers
Managing Director, Research
Report Number 312

Executive Summary

When most of us first opened a credit union account, mobile phones didn’t exist, much less apps, remote deposit capture, home banking of any kind, or, for that matter, the Internet. Now we can manage finances online without leaving the house. Or on the road, using a smartphone or tablet or watch. Today’s banking world is anywhere, anytime, with any device. And we love it.

Well, some of us. For every early adopter there’s a member who doesn’t even like call centers, much less the credit union kiosks where you interact with tellers via video screen. These members like to talk to real people in a real branch and get real cash.

Members’ banking-delivery inclinations are all over the map, and credit unions are feeling the pressure to implement myriad channels and please everyone. But you know what they say—you can’t be all things to all people, and that’s what this research addresses. It reviews changing delivery-channel preferences, efficient technologies, and the trade-offs credit unions must make to best serve their members’ current and emerging needs

What is the Research About?

Filene Research Director Ben Rogers looks at channel delivery from four slightly different angles, using proprietary data from McKinsey & Company, Novarica, and Fiserv, along with national data from Gallup. Using those disparate sources and expert interviews, he details preferences and forecasts their likely evolution.

Fiserv finds that members increasingly use digital channels for low-value transactions and finding information but prefer to get financial advice in branches. And while mobile activity accounts for only a small share of transactions today, this activity grew more than 90% in 2012 and may account for the majority of balance inquiries within three years—and eventually the majority of balance transfers and check deposits.

What Are the Credit Union Implications?

The trajectory for mobile channels alone has huge implications for credit unions. Since, as Rogers observes, it can take years to launch a new channel, it behooves credit unions that do not already offer mobile to at least examine its potential for their membership.

It’s important for credit unions to understand national trends and to consider them in light of their own member demographics, institutional profile, and strategies. Especially if your resources are limited, you can’t—and shouldn’t—offer all channels. It’s better to have 5 A+ channels than 20 mediocre ones, so you have to select those with the best fit now and several years down the road.

If that means phasing out some channels, consider offering incentives to members for using preferred channels, setting defaults to encourage their use, and offering live demonstrations for first-time user.

This report is sponsored by Pennsylvania Credit Union Association.