Why Experience (Usually) Matters More Than Technology
By Paul Timm, Vice President - Marketing and Strategic Development, NAFCU Services
It sounds obvious, but sometimes we have to remember that the best experience we can offer to members is truly to be there when they need us. In his closing keynote at our 2021 Innovation Spotlight, Rahm McDaniel, Vice President of Strategic Solutions at Q2 explained how technology isn’t what separates the leaders from the followers in the competitive financial services landscape. It’s still experience, and how we apply those technologies to experience, that matters.
Consumer experience is one of my favorite topics, so I want to highlight a few key takeaways:
- The disruption from the last 18 months won’t change our course, even if it changes our velocity. The last major economic crisis sent a wave of institutional failures rippling through the system and shook confidence at all levels, from individual members to multinationals. Even institutions who played by the rules and observed good practices had to pull back even further in ways that hurt consumers. Rahm pointed out that in “2008-2009, everybody went from a sales mentality to a risk management mentality. [Today] people are just doing more of what they were doing before COVID.” This time around, he says, the main focus is on extending and expanding digital services that were already on the radar. That means member experience shouldn’t need to take a back seat to belt-tightening, as it did a dozen years ago. “The quality of their technology does not determine their excellence as a financial institution. It’s experience that differentiates your brands.”
- The push to reduce and eliminate fees is good news for credit unions. As we’ve heard from multiple consumer surveys at this point, fees are one of the worst parts of the banking experience. Some FIs may resist making changes here for revenue reasons, but some neobanks and fintechs have found an obvious gap to fill. Consumers aren’t buying their technology; they’re signing on to get away from what they view as unfair fees. But credit unions have an opportunity to rethink fee structures--to revisit why fees happen and talk about new ways to help members get added services and avoid surprise fees. The new entrants don't have the relationship advantage of credit unions and can't really have that same conversation. “This is a good-news story for the credit union. This is not something you need to make a huge technology investment in,” Rahm said.
- How you apply resources to experiences matters more than how deep your coffers are. Rahm pointed to the small Citizens Bank of Edmond (Oklahoma), which has received media attention and applause for how well it took care of customers. Some tools to manage earlier ACH credits and PPP loan forgiveness required tech interventions, but most of what customers noticed on a day-to-day basis is well within the technological reach of any qualified institution. “All they really did was put picnic tables in the parking lot and made their Wi-Fi coverage a little bigger, they had 24/7 phone support, used their branches for curbside [service] rather than behind-the-counter, and changed some velocity controls. That’s it,” Rahm noted. “Digital can help you extend, but digital doesn’t replace your connection to community.”
We’re an industry that is always looking for a technological edge, and that’s as it should be. But I’m grateful for conversations with people like Rahm who keep us anchored in the real reason technology is valuable: for the ways it can enhance our ability to attract, retain, and delight members.