How COVID-19 and technology are changing the role of marketing for credit unions

Dhiraj Nallapaneni

7 min read Last Updated Oct 22, 2020

The following post is from a guest contributor.

As member-owned financial institutions, credit unions have long been touted for their competitive interest rates, low fees, and their local branches’ ability to offer high quality and personalized service.

Then along came COVID-19. Credit unions, even more so than their larger banking chain counterparts, were faced with a myriad of new challenges. They had to find entirely new ways to function and connect with their members (as if tackling digital marketing as a small or midsize financial institution wasn’t already hard enough).

If the pandemic has taught credit unions anything, it’s that marketing isn’t just about brand stewardship anymore. It’s shifted from selling to all-encompassing customer communications. Credit unions today are living and breathing this change. And at the heart of it all? Technology (surprise, surprise).

Pivot or perish

With human-to-human interactions hampered, credit unions had to quickly shift to incorporate multiple touchpoints across different channels to retain and serve members. The path of least resistance was in adapting the resources institutions already had (such as drive-thru and call centers), or to accelerate projects that became critical to the operation of the credit union (which inevitably involved digitalization, remote, and virtual operations) powered up by technology.

We’ve seen marketers drop initiatives that no longer made sense. They quickly learned to speak “operational-ese” and adapt and start projects to address new needs. They solved critical problems—like how to have meaningful conversations with members that deepen relationships and aren’t purely transactional. 

Because no one has a year to solve these challenges anymore, we’re seeing credit unions across North America find innovative ways to reduce time-to-market. In many ways, financial institutions have been forced into a crash-course in agility (i.e. planning less, experimenting more, executing fast, and learning on-the-fly). 

One cool perk is that, faced with no alternative, members have needed to be both open and patient with digital improvements. Where they were previously resistant, we’re seeing that individuals are taking the time to learn and adopt new technologies and modify their financial habits in ways we never expected. It’s hard to think of a better motivation to improve operations with the use of technology than this moment.

A few key areas where the industry is seeing notable progress for both credit union execution and member adoption? In-branch appointment scheduling, customer service queue management, digital signature, digital account opening, chatbots, and video banking.

New approaches to retention & acquisition

Retention strategies for credit unions used to weigh heavily on traditional marketing campaigns, re-brands, print materials, and the personal touch of in-branch interactions. It worked for institutions and it worked for members. Until it didn’t. Today, we’re seeing that credit unions are more open than ever to tapping their wealth of first-party data to better understand what their members need in order to evolve products and keep members happy. The way forward is undoubtedly digital.

Many credit unions discovered through the pandemic that not being able to identify which of their members was going through a tough time was a big problem. They either had to offer financial support to everyone (which is not good for business), or to no one (which hurts the brand and member relationships). Credit unions that had data were able to concentrate their resources on those members who really needed help, while continuing to support those less affected in the achievement of their financial goals. For example, many people didn’t want, and didn’t have, to postpone the dream of getting their own house.

As for acquisition, right now, traditional outreach is either less effective due to new behaviors, like buying ads on billboards and busses, or plain impossible, like incentivizing walk-ins with lobby donuts. And beyond that, member populations are aging. The barrier to entry for new financial players is lower than ever. Today credit unions are tasked with attracting a younger, more digitally-savvy, population who want and expect a seamless omnichannel experience that they’re getting cross-industry (think Amazon and Netflix). Add COVID to the mix, and digital acquisition strategies have now become a necessity.

Updating the tech stack

In order to solve operational issues in an agile way, many credit unions have had to adapt their technological stack. The channels themselves needed to be programmed to handle scenarios that were historically solved by brick-and-mortar branches (either because clients preferred it that way, or because there was seemingly no digital alternative).

In-house IT teams and third-party providers of tech solutions for financial institution marketers have stepped up to occupy a very important role, as an enabler of highly segmented and complex communications and transactions (a key capability for not only marketing, but also for operations and business intelligence).

Vendors are tasked with improving customer relations and engagement, document workflows, and providing key integrations with current technologies to better serve and communicate with members. A few such examples include omnichannel automation platforms, analytics and insights tools, AI-backed chatbots, phone and video banking solutions. 

Five years of digital transformation progress in 6 months

Pre-COVID, it wasn’t uncommon for a credit union to have little-to-no budget allocated for digital marketing. One credit union, who had previously placed a lot of emphasis on event sponsorship, had to think creatively about ways to stay top-of-mind in their community once the pandemic came. For the first time ever, they shifted 50% of their budget to digital and tried promoting and sponsoring online events like virtual versions of bike rides, museum exhibitions, and local theater productions.

Perhaps the most notable technological feat that many credit unions have achieved since the arrival of COVID-19 has been fully digitizing the account opening process. Historically, most financial institutions haven’t been able to support this without some form of in-person appointment or a clunky web experience that led to high abandonment rates for applicants. Jim Marous from The Financial Brand calls this “faking digital”—where a process seems to be digital but cannot in actuality be completed without a last visit to the branch for signatures, ID verification, or proof of residence. 

But where there’s a will, there’s a way.

We heard from one credit union in Texas that, for the first time in 42 years, was experiencing negative member growth due to lobby closure in the spring. The pandemic showed them that they were lagging behind in digital and they needed to find new ways to boost acquisition or risk extinction. Their in-house IT team successfully digitized their account opening process end-to-end. There wasn’t time to plan things meticulously and launch with a bang—iterating was the only way to go. Today, their numbers are back up.

Another great example of financial and digital inclusion was with Banco Agrario, a bank in Colombia that serves small farmers. When their branches closed, the institution was tasked with opening a remarkable number of accounts during the early weeks of COVID-19 for their membership demographic. The majority of their members have access to a smartphone, but no computer. Instead of opting for top-of-the-line facial recognition and biometrics (which would have created friction for its members), they rolled out “challenger questions” to assist with ID verification and ensure the highest account opening rates.

A new way forward

Even with branches reopening by appointment across much of North America, it’s safe to say that the pandemic has redefined the customer experience. 

We’re seeing that technological challenges that seemed near impossible for CUs to achieve in 2019 are in full execution-mode in 2020. And these new systems and solutions aren’t band-aid solutions—they’re likely to help financial institutions stay competitive and omnirelevant in the long term.

About the author


Clara Hori is Head of Growth at Prisma Campaigns, the all-in-one marketing automation software for banks and credit unions.

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