Credit Union Geek

Marketing, Strategy, and The Force by Joe Winn

Tag: offerings

A Little Intelligence On Artificial Intelligence

A few months back, I shared my first audio post.  It was incredibly well received.  In that I enjoyed it and other people (probably) listened to it.  With such a successful start, how could I go wrong returning to the medium?

I read a lot of industry publications.  Probably too many.  But that means a win for you, my reader, since you glean the best of that time spent!  If trending articles don’t mention Millennials or how to maximize your social media presence, they’re discussing the brave new world of AI, Artificial Intelligence.  Even on my blog, the 2nd most popular post is about AI.  Here’s the degree of impact it stands to make for the industry: Everything you research or decide with a person will be done, faster, more reliably, with a computer system.  So, a big deal.

We’re not talking T-1000s in your branches (though they would be formidable security guards).  Nor does it have anything to do with the AI advances you hear Elon Musk warning us against.  For financial institutions, AI is simply a software system that can dive into a ton of data (that you already have) and make accurate risk and other determinations.  It’s nothing new for your credit union, only doing the same thing better and faster.  While serving your members anywhere, on their terms.

Of course, since this is an audio post, stop reading and just push play!

If, after listening, you have more questions about AI (which you should), feel free to leave them in the comments below or contact me directly.  I can provide a number of references to companies doing all of these things today within the financial world.  Are they a fit for your institution?  That’s for you to decide.  But I will say one thing with certainty: AI technologies will become the de-facto determination platforms for most company decisions in the near future.

PS – AI isn’t just for financial institutions.  It’s going beyond and helping serve the unbanked around the world.  Here’s an example of a company seeking to provide credit for the developing world.  Their system uses 10,000 data points on each person, collected by their phone app only (texts, contacts, and much more) to determine if they are credit worthy in 10 minutes or less.  No credit bureau, no credit risk agent, nothing.  Can your credit union do that?  Because if not, there’s an AI tech which might be a fit (Disclosure: I’ve interacted with one of their team members).

Image credit: Giphy (Terminator 2, but you, an honorable geek, already knew that!)

Different Credit Unions For Different Members

“Our members are different” might actually be true.

However, it’s for different reasons than cited. Most people react similarly to good marketing and smooth user interface design. They may not recognize why, but there’s a reason Google looks nearly the same as it did a decade ago.

However, individual credit unions may have a focus which makes them a better choice (pun intended) for certain members. While one member may be looking for the lowest credit card interest rates, another wants the highest rewards. During a recent visit to a number of clients in the Philadelphia area, I encountered this variance. While we were talking about goals and strategy, one credit union waved off anything below “C” paper for auto lending. Though they would work with members on individual exceptions (mainly to “look beyond the number”), it wasn’t their focus. The next day, I visited a credit union who went well into the low 500s for auto loans. “Our D paper is most other CU’s F- paper!” they exclaimed. The risk management was designed to accommodate these loans and they reaped the benefits of higher interest rates. This credit union felt that it was important to serve members who would otherwise be stuck in “Buy Here, Pay Here” financing.

What type of credit union are you? Is adopting a public face with impressive main office architecture, driving CU-branded cars around town, and sponsoring events your “thing”? Or, do you operate with a more low-key approach, relying on your existing members to spread the word and passing on those marketing dollars in the form of lower rates or greater dividends?

I’ve been to a lot of credit unions in the past few months. From a roadside office to a mountain compound to a 1700s governor’s mansion, the variety is incredible. I’d wager the variety of members served was equally so.

Is there a “correct” balance? Yes, one which allows your credit union to serve your current and target members to their highest satisfaction. This may mean offering numerous options for every service (though the Paradox of Choice normally precludes it…for much more on the concept, continue here or my post), focusing on rewards programs (make it a game!), or presenting “credit building” solutions. It’s all about your members. And you’ll get it wrong. So you tweak your strategy, ask your membership (remember the note cards?), and get better in the future.

Isn’t that, in and of itself, a way of being different?

Image credit: https://sorryabouthatbud.files.wordpress.com/2012/09/mm-edited.jpg

A Loan By Any Other Name…

By now, you are likely acquainted with hybrid vehicles. It all began with the Prius, and to this day, it is still the dominant vehicle in the class. For many people, Prius is synonymous with “hybrid car”. Toyota managed to achieve the holy grail of marketing: Proper noun in place of a noun. What does that mean? Let’s take some examples. What do you call the activity of using the copy machine? How about a tissue? Or an adhesive bandage? And then, there’s the king of them all…that gelatin-based wobbly dessert.

Can your idea become the Kleenex of tissues, the Jello of jiggly sweets, the Band-Aid of bandages, or the Xerox of copying?

Probably not.

Hey, I have the utmost faith in your efforts! First, however, consider the odds. How many products/services do you refer to by their brand? A dozen, at most? Your idea can be a great success without becoming a fixture of public consciousness. Sure, you Google your way through an Internet search session, but do you “credit union” your loan application? You know the answer. And that’s just fine.

These brands achieved success beyond their wildest marketer’s dreams, yet it is not an absolute. When you take a picture with your phone, do you call it a Polaroid? Why not? It’s instantly available, able to be shown and shared with others near and far, and might even become clearer if you shake it around. Some brands don’t adapt, and the word goes with them.

So it’s not the fact that people say the brand name, it’s that the product offers such a great benefit. Band-aids still cover cuts and bruises, with the confidence its removal will be pain-free. Jello still jiggles as if it were alive. Xerox machines still represent the boundary between screen and paper in an office.

At the end of the day, the (arguably) horrible pickup line still applies: “Hi, my name is Joe, but you can call me anytime.” As long as your members are aware of and getting great service through your credit union, does it really matter what they call it?

All brand names copyright their respective owners and are referenced in fair use, but, I’m no lawyer, so who knows?

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