Revitalizing the Credit Union Payments Experience

By Fran Duggan02.12.2018

2018 holds the potential to be the year of new digital experiences in the credit union industry, and payment experiences will be critical to adding and retaining member relationships. Many financial institutions have already embraced faster payments through ACH throughout 2017, and the industry is poised for new innovations that will improve payment speed and reinvent the member experience as we know it.

For much of the last several years, credit unions have approached the payment experience with a check-the-box mentality. Up until recently, it had been acceptable to just keep pace with other financial institutions’ payment solutions, instead of keeping a wary eye on the competition outside the financial services industry. However, in 2018 more than ever, credit unions are looking to address the threat of alternative payments providers, such as Venmo and Paypal, and looking to deliver a payment experience to members that is better, faster and smarter than what is currently available today.    

Credit unions leaders have identified that artificial intelligence is the next important development that will transform the industry; however, very few have adopted practical solutions that leverage this technology. Many have the view that the role of artificial intelligence is a way to internally reduce costs rather than thinking outwardly as a way to add value for their members.

The most significant developments in artificial intelligence in 2018 need to be focused on predictive modeling and its varying uses. When it comes to payments, many members pay the same bills each month and have very predictable behavior in their spending. By leveraging their access to this rich source of data, credit unions have the ability to anticipate those payments, predict how much money will be in a select account, queue up the payment and notify the member though a push notification that the payment is scheduled and ready for approval.

Taking this a step further, through predictive modeling, a credit union will be able to proactively offer to transfer funds from one account to another to fund a payment or if there are excess balances, offer to transfer money to a savings account. This “do it for me” approach adds true value to members. Providing a better payment experience goes beyond a pretty user interface, and with artificial intelligence tools, credit unions will have the opportunity to deliver these types of value added services to their members.

There is a famous quote by the hockey legend, Wayne Gretzky: “To be successful, I skate to where the puck is going to be, not to where it has been.”

In 2018, credit unions need to rethink the payments experience and go where the member is going to be. Credit unions should look to develop voice recognition, chatbot interactions, and interactive push notifications to deliver services and support for members. Many members have similar needs and concerns and expect answers in real-time but they differ in where and how they want to get their answers.  For example, many younger members will prefer to use chatbot support and, although it cannot replace human technical support completely, it can offer significant cost savings and improve response times for common inquiries while delivering a great user experience. Chatbot support can even integrate well with human technical support, by collecting basic information about a request to determine the problem or request’s general nature before connecting the member to the best tech support department.

A focus on mobile integrations is no longer enough to provide a great user experience. There are new member touchpoints that credit unions will need to address. The industry has seen a few large financial institutions offer voice recognition software integrations, but this year will see more community banks and credit unions offering theses services. As Amazon Echo, Google Home, other smart speakers and wearables are becoming more prevalent, there is more incentive than ever for credit unions to integrate with these devices to conduct simple tasks, such as checking account balances, making transfers between accounts and checking the due dates and making payments towards recognized bills. As a result, voice recognition integrations with banking apps will become more prevalent.

2018 is likely to be the year that the credit union industry observes the most change and innovation in the payment experience. The industry has access to significant technology developments from outside industries and has a golden opportunity to find ways to deploy this technology to improve members’ experiences and add value to members across all touchpoints. This opportunity is especially relevant in FI-centric payments, which is experiencing increased competition from fintech players that offer a better experience for consumers. In order to remain competitive, credit unions need to take action in the coming year to re-energize their payment experience and deliver greater value to their members.

Fran Duggan is CEO of Payrailz, a digital payments company offering advanced bill payment and money transfer solutions to banks and credit unions.