Beat the Competition by Embracing Web 2.0
How can your credit union compete with your big bank neighbors despite their ubiquitous presence, and seemingly limitless marketing budgets?
While you might not be able to match your competitors’ branch count or quantity of TV commercials, you know your members and your community better than anyone else. How can you effectively share that knowledge and expand your reach?
Enter Web 2.0 – possibly the greatest thing for credit unions since expanded charters.
Web 2.0 is part philosophy and part technology. It offers a new way of communicating and doing business. Some examples of Web 2.0 sites include Google, Wikipedia, and Amazon.com. It’s been around for a while, but is just now making its way into online financial services. To be successful, you need to apply the Web 2.0 concepts most relevant to your credit union’s current and prospective membership by focusing on areas that differentiate you. Here are some Web 2.0 concepts that can be applied by credit unions to beat the competition:
• Create a Community
• Be a Financial Partner
• Make Things Easy
Create a Community
Unlike many of your large competitors, who don’t truly understand your community, you have in-depth knowledge of local businesses, schools, community events and activities.
At first glance, this local knowledge might seem tangential to financial services, but consider the context in which members make most major financial decisions. For instance, mortgages are made in the context of finding a home and require evaluating neighborhoods, finding the best home search tools, reviewing school options, determining local services, selecting a real estate agent, getting advice and options, and ultimately securing a mortgage.
Since you know your community, you can provide members with valuable online resource centers around major life events to save them time. This transforms your site into a useful destination enabling you to play an important role throughout the process as members make critical decisions. Once members are ready to secure a loan, you can make it easy by pre-populating online loan applications, providing instant decisioning, and following up to ensure they’re satisfied with the experience. The net result is improved member satisfaction, a viral marketing effect that encourages non-members to visit your site, and a higher close rate.
Many of the most successful Web 2.0 companies recognized the tremendous power of creating communities and the vital marketing benefits that can be achieved. Another step to supporting communities is to focus on the smallest communities – families. Offering families a service for sharing and controlling access to financial accounts positions your credit union to serve a vital role throughout multiple life stages. For instance, families may manage accounts for children or parents that need financial assistance, easily move funds between family members, keep tabs on spending, and gradually provide more control to family members as their financial responsibility increases.
Be a Financial Partner
Being a financial partner requires evolving from a transaction processor to becoming a trusted financial destination for members. A first step is to give members endless financial archives. With 75% of people either never backing up their data, or doing so infrequently, you have the opportunity to provide a highly valuable service that increases retention and builds member confidence in your institution, encouraging them to do more with you.
Taking this example one step further, you can make financial information actionable by providing members with financial views that categorize their spending, alert them to potential overdrafts, and simplify tax preparation. This helps improve member financial literacy while increasing activities like debit card usage and the purchase of complementary products such as overdraft protection or additional credit.
Make Things Easy
If you’re looking for a Web 2.0 example of making things easy, look no further than Google search. One simple box has resulted in a company that has grown to the size of a top five bank. While you might not achieve Google-sized greatness, applying the same principle of simplicity to your web resources can help you encourage behaviors important to you and your membership.
For instance, if you want to encourage members to take advantage of your great savings rates and grow your deposits, why not provide members with a quick transfer module right on your online banking landing page? This would enable members to easily transfer funds into your institution with a few quick clicks. A successful example of an institution offering a quick transfer module is e*Trade, who has rapidly grown deposits without a significant physical presence.
Web 2.0 is forcing us to rethink how we do business, and you have a tremendous opportunity to apply these concepts to beat competitors who are fearful of open customer communication and slow to innovate. The nature of your credit union’s membership encourages open dialogue between and amongst you and your members. Your local knowledge and expertise is a tremendous competitive asset, and the online channel is the great equalizer for you to effectively deliver your unique differentiators to beat much larger competitors.
Max Janasik is Director of Community Banking Solutions for Corillian Corporation, a premier provider of enterprise software and services for the financial services industry. For more information about applying Web 2.0 concepts in online financial services strategy, check out this webcast