The recent Pokémon Go app craze exemplifies the power of the mobile experience. In case you’re one of the few that hasn’t read about it or downloaded the app yourself, this augmented reality game is based on the classic Pokémon video game and TV series, and the app accesses your smartphone's GPS and camera as you search for Pokémon characters. According to a recent article by Survey Monkey, Pokémon Go has become the biggest mobile game in U.S. history; just three days after its release, Pokémon Go gained more users than Twitter and shot to the top of the App Store revenue charts, earning millions of dollars a day for its publisher.
Keith Riddle, SVP, Chief Product Management Officer, Corporate One FCU
The massive success/popularity/profitability of Pokémon Go reminds us about the tremendous capacity that digital/mobile experiences have to attract and engage consumers of all ages, millennials in particular. It’s an understatement to say that the Pokémon Go mobile app is probably earning a significant return on investment (ROI). But, since most of us are not developing financial, augmented reality games for our members to use (although that would be interesting), how should we define the ROI for mobile in an ever-changing, always-evolving technological eco-system?
In an online article titled “The Real ROI of Mobility: Defining Return on Investment in the Mobile World,” the Survey Monkey author outlines three ways to define ROI for mobile:
Making more money/increasing revenue
Although these points may not sound revolutionary, they’re good to keep in mind as we discuss how the mobile experience can benefit our credit unions and create a positive ROI.
Making More Money/Increasing Revenue
The latest financial research reports that the mobile experience increases/generates revenue because, simply put, mobile consumers consume more. For example, recent research by Fiserv revealed the following statistics about products, transactions, and adoption rates:
Product holdings are higher for mobile banking customers:
Mobile banking customers: 2.3 product holdings
Branch-only customers: 1.3 product holdings
Debit and credit card POS transactions for mobile consumers are significantly higher:
19% increase in the number of average monthly POS transactions for credit union members.
46% increase in the number of POS card transactions for bank customers, average transaction value also increased 46% — from $550 to $801 per month.
Based upon a 30% adoption rate:
On average, a credit union could pick up an extra $1.6 million a year in incremental revenue, along with interchange fees up to $8 million more a year from incremental point-of-sales purchases.
At the same time, the credit union could cut member attrition by up to 20%.
Speaking of attrition, you’ve probably heard that it’s more profitable to keep a current member than it is to acquire a new one. The Fiserv research also demonstrates the positive ROI for mobility in this area. For example, for members who used mobile banking from large credit unions, there was a 4.9% attrition rate compared to 13.4% for members who weren’t enrolled in mobile or online channels. Among medium and small credit unions in the study, attrition rates were even lower at 2.8% for mobile bankers. Bank branch-only customers are more than two times more likely to attrite than mobile banking users.
As credit union staff, we often think of “risk” as the potential bad or unpleasant things that could happen to our financial institution caused by unscrupulous members and businesses we serve or investments we have that may lose value. However, managing risk isn’t always about mitigating the losses caused by others or outside circumstances. Managing risk is also about the hazards we pose to ourselves if we don’t listen to what our members, and consumers in general, want, and take proactive steps to give them that experience.
For example, recent research by TimeTrade on consumer interaction by channel reports that 67% of consumers prefer to interact with their financial institution online (desktop or tablet).
Basically, digital convenience is essential if credit unions want to compete for new members. And we’re putting our credit unions at risk if we aren’t providing optimal mobile experiences. A recent article by The Financial Brand titled “Top 3 Banks Get Majority of New Customers” reported the following:
“Digital convenience’ helps the top three banks acquire more new checking accounts than the next 17 largest banks combined. To win the battle for a smaller number of checking accounts ‘in play’ requires a better understanding of consumer profiles, attitudes, behaviors and trends.
"The good news for banks outside the top three is that millennials with a checking account at a national bank are more open to moving. Sixty-three percent of millennials who have their primary checking at a national bank also said they were open to switching that relationship, compared with only 51% of millennials at large regionals.”
If credit unions delay getting on board with the emerging trends in digital engagement and mobile experiences, I believe we run the risk of not being competitive enough, convenient enough, and relevant enough to both acquire new members and retain current members. It’s time to provide digital financial solutions that meet consumers’ expectations and make it easy to do business with you.
Succeeding In The Mobile/Digital Financial Marketplace
The bottom line is that there’s plenty of research reporting a definite, positive ROI for mobility, and fortunately, Corporate One is ready to help credit unions of all sizes succeed in the digital age. Our mobile/digital product suite optimizes the Member Acquisition Experience (MAX) so credit unions can grow membership, boost revenue, and increase member retention. MAX is designed specifically to address current challenges in the ever-evolving technological ecosystem, and we’re ready to answer your questions and/or help you get started.
Keith Riddle is Corporate One’s SVP, Chief Product Management Officer. Riddle has more than 30 years of financial services experience in direct sales, product and partnership development, and marketing and strategic planning. He also has experience in payment processing technologies, cloud computing and managed solutions offerings, online banking platforms and personal financial management software, EFT/debit/credit/prepaid processing platforms, and check and ACH processing.
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