Credit Union Geek

Marketing, Strategy, and The Force by Joe Winn

Tag: simple

Clarity. It’s Pretty Obvious.

Originally published on CUInsight.com

The topic for this post emerged while I was at a vendor expo prior to a major run. Ok, you got me. It was at Disney. Readers, “every mile is magic”!

One of the vendors was a title sponsor you may have seen mentioned on this blog: Misfit. They are an activity tracker/watch/smart device company owned by Fossil. I’ve used their original device since release: basic but functional. Since then, they have released a number of more advanced wearables. The evolution of the device I have now interacts with your phone as a camera remote, a “get me out of this awkward situation by calling me” feature, ability to control music, and even turn on/off smart lighting. And I thought mine was cool when it knew I was sleeping!

Their other devices range from a full-fledged smartwatch (like an Apple Watch) to one called the Phase. It’s marketed as a “hybrid smartwatch”. If you’re being honest (and isn’t that why we’re all here?), you don’t know what that means. It’s ok, I didn’t, either. Does it run on two power sources? Can I make it a normal watch, then flip a switch and have a screen turn on? Is it a tiny Autobot? I even picked up a brochure, and the only guidance it gives is that “it’s more than time”. Luckily, the company had representatives at the event to explain. Us charlatans were all off the mark. A “hybrid smartwatch”, as you obviously should know, is a device with a normal watch face, physical moving hands and all, yet inside, it has all the computers you’d expect out of something much more impressive. Instead of using a power-hungry screen, the watch moves the hands around in different patterns, which you have to remember their meaning. It’s like morse code for the tech world. (Was 10 o’clock Mom or Steve texting? Oh, it’s actually just 10:00.)

Now we are all on the same page when it comes to hybrid smartwatches. They’re normal watches that can do some “smart” things. Couldn’t you figure it out from the name? No? Psh, what are you, a normal person or something?

Misfit did that little thing we all fall victim to sometimes; they assumed. If you make up a new term, it needs to be repeatedly explained until it becomes common knowledge within your target audience. Otherwise, all you’re doing is confusing your readers and maybe even scaring them out of making a decision. “I don’t know what they’re talking about, but since it’s not explained, I bet everyone else does. If I ask, I’m the dumb one, so I’m not saying anything.” I’m sure within the industry, “hybrid smartwatch” is a common term with broad understanding. But did anyone check the real world?

There’s a possibility your own credit union is making this same mistake. As with most industries, we do love our proprietary terms and acronyms. VSC, GAP, CPI, PPI, AD&D, and more. You’re right, some have general understanding in the public, but not all. And aren’t you about educating your members to make better financial decisions (which may involve you making more money)?

All of your member-facing services should be presented in a simple, easy-to-grasp way. If a member wants the full details, that’s fine, but initial encounters must be instantly understandable. Take, for example, PPI (Payment Protection Insurance): “Get hurt or sick and can’t work for 30 days or longer? This pays your loan.” Everyone will get what it offers. GAP: “Totaled your car and insurance didn’t pay the whole loan? This pays the rest.” VSC (or Warranty for some CUs): “Car breaks? This pays to get it fixed.” In the latter example, you need to be offering a top-tier warranty service to say something so simple.

And that brings up a good point. Besides missing member purchase opportunities due to a lack of clarity, you could also be making things difficult for everyone by partnering with a challenging provider. Remember, my business works with CUs. No matter what we offer, we aim for it to be easily digested by staff and members, without lots of exclusions, loopholes, or other places where relationships break down. Your MSRs want solutions which can be quickly presented to members. Once you have to start clarifying where it does and does not apply, the sale opportunity is gone.

Ok, there was a lot in this piece. Let’s bring it all home.

  1. Hybrid smartwatches are normal-looking watches which do cool stuff. They show you by spinning their physical hands.
  2. Assuming always gets you in trouble.
  3. Every member service should be instantly understandable (if only at a, “that sounds useful, tell me more” level).
  4. All offered products, in-house and partnered, must be top-quality to ensure you don’t need to start presenting where they don’t apply (ie. A warranty which doesn’t cover sales tax).

Credit unions exist to help members make smart financial decisions. If we’re stuck with industry jargon, assuming everyone understands, while presenting complicated solutions, are we really fulfilling our mission?

This leads me to a future post which will discuss the idea of selling. Yes, you should be selling to your members. Why? And how? You’ll just have to wait and see!

Want Tomorrow’s Tech? Team up! (Part 2)

Due to the importance of this topic, I’ve gone past my normal length limits in this post. Estimated reading time is 5-6 minutes.

Are You a Dumb Pipe? If this comes across as an insult, instead of fighting, let’s go back to the post which shared the same title. It’ll take two minutes, three, tops. Done? Welcome back. Much appreciated. I know it’s distracting out there.

What did you think? Is your institution on the path to becoming a “dumb bank”? Turn that frown upside-down, because there’s a way to avoid such a bleak future. Partnerships! You know my history of encouraging interrelationships amongst financial institutions and other service providers. Whether they be fellow cooperatives or complementary offerings, bringing them together under your brand increases the value of your membership. There are other groups doing a wonderful job presenting the data on these activities, from CU Social Good to Filene Research and even CUNA itself.

It’s not my goal to rehash their findings. Rather, I aim to focus this strategy into the consumer technology field, which is one where the credit union industry struggles. It’s a matter of resources. If you’re large, with enormous budgets and negotiating power, you can design and implement a cutting-edge platform for your members. If they ask for it, you can provide it. But, I can count the number of credit unions able to do this on a single hand. And even then, their resources pale in comparison to national and international banks. Take Bank of America’s board compensation, for example. In FY 2015, just serving on their Board of Directors nets you at least $80,000 in cash and $160,000 in restricted stock units, with additional incentives available for chairing committees (source). Imagine how much is available for their mobile app.

Look at your own member experience. Where are you weak? More than likely, there is a technology solution which can overcome that pitfall. “Oh, we don’t have the budget for improvements this year.” Someone does. Take Simple, for example. They are aiming to become the PFI of their customers. Using a mobile-first platform, you can do anything from your phone, all with few of the traditional fees. Get a Visa debit card, configure auto-payments, and you’re done. The “riffraff” of a financial institution is eliminated. All the money is held by an insured entity, which happens to be their parent company, The Bancorp, the largest provider of pre-paid debit cards. For my Canadian friends, Koho is a similar platform still in beta testing. Both of these companies eliminate or convert the traditional FI to a place to hold your funds. Koho explains their money is made on interchange fees. In the case of Koho, discussions with their team led me to believe they might engage in credit union partnerships, but I don’t know anything for certain at this time. Barring that, I don’t suppose you expect to continue receiving interchange revenues…

The previous examples were complete financial institution replacements. Let’s talk about one which may become a threat over time. If you’ve shopped at a farmer’s market, art fair, or food truck event recently, you likely bought an item using Square. It’s that little white box attached to the vendor’s phone or tablet enabling a swipe transaction. Once again, their money is made through transaction fees. Square’s growth is due to the ease of use on all sides; what’s simpler than attaching a tiny device to your phone…bam! Your cash-only business now accepts plastic. While funds are drawn from and deposited to traditional checking accounts, I’d wager they are building a system to become the home to all your funds, in the vein of another provider, the king of alternative banking: PayPal.

The best choices for partnerships are what I call “over-the-top” providers. These are services which add valuable capabilities to your members, without minimizing your brand. This is the place you want to be. A small credit union can stand on the shoulders of technology giants and offer a suite of modern services on par with the “big banks”. One I’m seeing in many credit unions is PopMoney, not surprising as it is powered by Fiserv. It’s possible you’ve heard of it, or even use it at your own. Their service enables easy transfer of money from one person to another, regardless of financial institutions. As long as both are members of the PopMoney network, the funds will arrive immediately. And here I am writing a check. You can use text messaging, e-mail, or even the mobile app (if the CU supports mobile Bill Pay, this is often integrated), while the branding remains your own.

Want your over-the-top service to do more than just provide an additional member service? It’ll take more work, but credit unions around the country (Disclosure: Including one of our clients) have integrated innovative technologies into their core systems.

Take Kasasa, for example. No, I didn’t just cast a spell from Hogwarts (you silly Muggles!). Kasasa is a platform enabling free checking with high interest rewards, as well as ATM fee reimbursements, all within a policy of only partnering with local banks and credit unions (they share the community nature of the credit union industry).

Are fraud concerns raising your costs and scaring your members? Educators CU teamed up with a tech firm called OnDot to solve these challenges. How? Imagine you forgot your debit or credit card somewhere. With their Ctrl phone app, you can easily turn off your card. Find your card safely? Switch it back on. An additional layer of security, if a member agrees, is a location-based trigger. When your phone is more than 10 miles away from a place your card was just used, you get a notification. “So I did leave it on the counter!” This member convenience also makes money. An institution demoing the service reduced their fraud expenses by 60% while their member spend rose nearly 50%. Talk about a win-win!

Couple programs like these with support for Apple Pay (which more credit unions launch each day), and you are offering “big bank” functionality no matter your asset size. A recent post from Co-Op Financial Services, a leading credit union industry tech provider, discussed this very concept; that credit unions have the power of shared resources to meet or exceed capabilities of much larger entities.

One caveat: Not every solution fits your credit union. As an example, my own credit union added Money Desktop, a self-contained account management system, supporting accounts in any institution (not unlike Mint, discussed in the last post). However, it exists on its own, as a separate site, with no integration. Can I get to it from their mobile app? Nope. Does it even load on my phone or iPad? Poorly. I’m sure my credit union put a lot of effort into adding this program, but it just doesn’t meet my expectations. Like any other initiative, plan ahead, talk to your staff, members, and other credit unions to see what makes sense for you!

Hope you enjoyed the second of a three-part series on credit unions and technology. I appreciate you sticking with me during this longer post. See you in two weeks for the final article, covering the generation challenge; how do you create a future-ready platform while not confusing or alienating your older members?

Image credit: http://www.lifehacker.com.au/2013/01/common-tech-myths-that-cost-you-money/

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