In 1979, the British pop duo the Buggles warned about the demise of radio in their hit song, "Video Killed The Radio Star." Radio isn't quite dead, but the song's theme of technology having adverse effects is alive and well today. (ATMs will eliminate the branch, right?)
What history has taught us is that no one channel supplants another, and the same is true for banking. Consumers just interact with their financial institution more often both online and off, hence the need for an "omni-channel strategy," the theme of this year's NetFinance conference in Miami.
The personal computer, the darling of the 1990s and 2000s, is losing ground to the mobile phone. The average time spent using the Internet on a computer has dropped while Internet access via smartphone grew 26% in 2013.
Mobile applications are also on the rise. Apple's famous tagline, "There's an app for that," which first appeared in commercial use in January 2009, foreshadowed today's world where we have apps for everything from identifying a rare species of bird to ordering a sandwich. Mobile app use skyrocketed in 2013, up eight hours a month from the 2012 averages. That's an extra full workday every month, or if you'd rather not think about work, it's the time it would take to run two marathons.
The changing nature of technology is why credit unions need a strategy to cope with the dozens of ways consumer can access their financial information. Fortunately, the NetFinance conference offered plenty of ideas that credit unions can put into practice.
Every Medium Has Its Own Personality
One important message from the conference was that the type of medium matters. Marshall McLuhan, a leading thinker on all things media, is famous for saying that the medium is the message. Each channel is different and therefore messages should be tailored to fit the medium.
At the conference, Edwin Wong, senior director of B2B Insights at Yahoo, had an interesting way of portraying the demographics of online consumers. He assigned a personality to each device by family members:
The television is your grandparents. It has been around since the late 1920s and tells the richest, best stories. When you can sit still long enough to watch television (or talk to your grandparents), you can learn a lot. The problem is we don't always sit still long enough. According to Wong, we start to tune TV out after a while. Beyond advertising, credit unions have a great opportunity to garner earned media coverage with compelling narratives about the impact they have on the local community.
The laptop is your parents, authoritative and effective. This is where business gets done. For credit unions, it's where in-depth forms are filled out, loans are applied for, and new accounts are opened. Online banking should be available, easy to use, and comprehensive. Members should be able to control most of their relationship with the credit union remotely if they'd like.
The tablet is your cool older brother. In the 1980s, Apple co-founder Steve Jobs said he wanted to invent a personal computer the size of a book. He did. The tablet is constantly evolving, and the potential of this device is exciting for credit unions. The tablet is a perfect place to try new ways of reaching and engaging members; it is your place to experiment. The only caveat is you need a membership that likes whatever is new and exciting and is willing to experiment with you.
The smartphone is your little brother and like a loyal little brother, it is always there to play with. It sits in your pocket begging for attention. Although smartphone use is increasing rapidly, it's hard to learn much using a smartphone. Interactions here are quick, constantly interrupted, and often more of a distraction from something else than a focused activity. That said, smartphones and mobile applications have important uses. They're good for checking balances, transferring money, and doing quick transactions conveniently on the go. They are not the best platform, however, for more complicated transactions.
Although a key theme of the conference was that mobile and online functions need to be designed for different behaviors, both channels need to reflect the same information in real time. The holy grail of consumer satisfaction is having this omni-channel strategy, where a consumer can start an activity in one place (filling out a loan application in your native mobile app) and then finish the process in another (going home and finding those missing documents to scan and upload on the home computer).
The Ways Technology Makes Life Better
When the iPod first came out in 2001, Apple didn't market the many groundbreaking advances in technology and design that the device embodied. Instead the company marketed its use — 1,000 songs in your pocket. Apple knew that although tech geeks might care about how the iPod was made, most consumers wouldn't. They just wanted to know how a device, service, or product would make their life better.
Brett King, the founder of the mobile banking application Moven, articulated this point in his talk at NetFinance. When introducing new technology—whether it is an application, a video teller, or a website redesign—it's important to emphasize how that new change will improve a member's life. And be specific. So instead of explaining how mobile banking works, show how it will change members' lives for the better.
Don't explain how easy it is to take a picture of a check. Talk about the soccer game that a member can leave work early to attend because he won't be spending his lunch hour waiting in line to deposit that check. It's not about the ease of paying a bill online; it's how a member helps his occasionally irresponsible college kid avoid a late fee by expediting the payment.
The nuts and bolts of the tech don't matter, but what you can do with it does.
The Mobile Hierarchy Of Needs
Farmer's Insurance gave a presentation about the mobile hierarchy of needs and what satisfying each need can do for your relationships with members. Needs are categorized as tasks, experiences, and moments of truth.
A task is the grade you get for completion. It's the bare minimum necessary for a mobile application to function. If members can't use your app to make a quick transaction or check their balance before making a purchase at the mall, the app has failed and the members will ditch it. You have to get tasks right before you can move on to making the app look pretty and wowing members with its revolutionary functionality.
Experiences today are really brands. Taglines and logos might illustrate your brand, but it's your members' experiences with the brand that matter. To meet this level of the mobile hierarchy of needs, the experiences your members have with your brand online and offline should match if you want to create a brand worth talking about.
Take Uber, for example. On paper Uber delivers the same thing as a taxi – a ride to your next destination – but as anyone who has used Uber can attest, the experience is entirely different. A slick application with an intuitive interface locates the nearest driver and lets you know how long it will take to arrive (no more standing on the street corner in the rain trying to hail a cab alongside a dozen other commuters!). Uber then carries this brand experience into the offline channel, delivering an exceptional service in "real" life. A sleek car, always with bottled water at the ready, arrives to whisk you to your destination, often for less than that taxi ride would have cost.
Do your member service reps in the branch deliver the same exceptional experience as your mobile device? Or vice versa? Because they can't operate independently to create a brand.
Moments of truth are where you gain a member for life and a vocal advocate for the credit union. Moments of truth are times when your credit union saves the day. Members may buy a house every seven to 10 years, but the chance to buy their dream home comes along once in a liftetime. So you've got one opportunity to be there for them when it really matters. Can your members learn where their application is in process, submit the missing paperwork to expedite the loan before closing, and instantly arrange a call back from an originator to answer any outstanding questions? Deliver both online and off, and members will spread the word of how great your credit union is. Moments of truth don't come around often, but when they do, you need to be ready.
Four Steps For Introducing Technology
Taking the above into account, introducing new technology to your members is a four-step process.
Step one, build awareness. The importance of this step is so often overlooked, both for technology services and for products. Often we are too close to the credit union to realize that members don't know everything we can do for them, and saying it just once or twice won't be enough. Introduce and re-introduce your members to new applications, products, and websites. If they don't know you have it, they will never use it. One speaker cited a study showing that 30% of Gen Y didn't know if their financial institution offered mobile banking. And how many credit unions have heard a member say, "I didn't know you offered home loans!" Over-communicate.
Step two, teach members to appreciate the value of what you offer. That's when you show members how your mobile application will improve their lives. One speaker at NetFinance likened a member using a responsive mobile website to dating, and downloading a native smartphone app to taking that date to meet his parents. You need to earn that trust, not expect it to happen overnight.
Step three, encourage and reward use. Once members start using your new application, reward them with special deals and a flawless interface if you want that behavior to continue. Brett King wants his customers using their mobile app three or four times a day to pay for items, check for balances, or transfer money. To do this, you must offer incentives. Although some incentives may be explicit (25 basis points off a loan rate for all digital accounts), others may be intrinsic (the member accomplishes tasks faster than he would offline).
And finally, step four, deliver on your promise. There is a lot of competition for your members' time and money. Don't let them down. If you deliver a good product, they're all yours.