Why Brand Alone 'No Longer Cuts It'

By Ray Birch

SCOTTSDALE, Ariz.—Credit unions must go “digital first” now or prepare to merge later, according to one expert, who says brand alone no longer cuts it and that CUs must be careful of partnering with fintechs “without the fin.”

Feature Cornerstone Digital

Cornerstone Advisors Director Tim Daley said the data are clear about how critical it is for credit unions to not only excel at digital delivery but also use the e-channel to effectively target and market to members.

“You are either leaning into a digital first strategy or you will merge with someone soon enough. The stakes right now could not be higher,” Daley said.

Daley stressed, as have other analysts, that consumers’ preferences for product and service delivery is being influenced by major retailers such as Amazon and Starbucks, and they are expecting the same from their credit union.

“Your brand, alone, is no longer good enough to sway your members,” insisted Daley. “While your brand is still very important, it will no longer be the key driver for interaction with consumers. We are seeing that very clearly.”

A Common Mistake

What credit unions need to do, said Daley, is understand the delivery channels their particular membership uses most and make sure they have the capabilities to effectively work with members in those avenues.

But, he added, a common mistake made by many credit unions is an over-confidence in the current digital offerings at a cost of not improving with these channels.

“They have not had the branch footprint of the big banks and even larger community banks, so credit unions have become good at e-delivery,” said Daley, noting that comes with a big caveat–CUs must now excel at cross-selling, marketing and targeting members via digital.

Those are the new skills many credit unions must develop, said Daley, adding that services such as account transfer, bill pay and remote deposit capture have become commoditized and are largely seen as table stakes by consumers.

“We are moving away from a digital banking as a service-oriented platform to a sales-oriented platform,” he said, saying that vendor selection is critical.

Where to Look First


Tim Daley

Daley said credit unions must not be complacent with their current core provider and look outside, if necessary, for vendors that can deliver the digital solutions that will integrate the credit union’s ancillary services.

“So, LOS, digital account opening, for example,” said Daley, who added that to determine what tools they need to compete comes from comparing the credit union to the leading digital retailers in their markets. “You can’t just look at yourself and what you don’t have. Don’t start with a functional capabilities list of what your core system provides. Start with a list of what your members can get from those who are the best at digital.”

Behind successful efforts to digitally market to members is strong data analytics, said Daley.

“The credit union has to rely on its data so it can understand its members’ needs and essentially market to a group of one,” he said. “Reporting and analytics are huge today. Credit unions have to create accurate member profiles.”

A Word of Caution

In choosing vendors, Daley cautioned CUs to beware of partnering with fintechs “without the fin.” Daley advised CUs to pay attention to providers that are not prepared to deliver an effective digital solution that performs inside a highly regulated environment.

Daley stressed that with the shift to digital, credit unions could lose one of the key aspects of their business that sets them apart from banks—in-branch personal service.

“We need to extend the personal, face-to-face experience to the digital space,” said Daley. “We can still take very good care of our members and provide them good advice and offer them the white glove treatment remotely. But that requires the analytics, the marketing capabilities and the fulfillment capabilities so I can talk to members as a group of one. That is where credit unions need to spend their time and efforts.”

Section: Standard
Word Count: 844
Copyright Holder: CUToday.info
Copyright Year: 2019
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URL: https://www.cutoday.info/THE-feature/Why-Brand-Alone-No-Longer-Cuts-It