Credit Union Geek

Marketing, Strategy, and The Force by Joe Winn

Category: CUbit (page 1 of 8)

Plaid Among Fintechs You’ve Never Heard Of But Changing Banking

No, I’m not talking about the clothing pattern. Plaid is a Fintech startup which just announced a Series C funding round of $250 million. That gives them a valuation of $2.65B. Yes, billion. Chances are, 25% of your credit union members are using their service without even knowing. And Plaid isn’t alone, either in ubiquity or in valuation.

Powering The New Banking

Plaid powers the backend technologies which connect cool financial apps to your bank (or credit union) account. Little players like Venmo. Which is owned by PayPal (they bought them in 2013). I’m sure these aren’t worth your attention.

It’s not like Plaid does anything which may make your credit union into a “Dumb Bank”, simply a place where your funds sit and nothing else. No, they have no plans to take on other traditional bank services. Like mortgages. Oh, it appears they do. But it’s ok, they want your help.

This appears to be a common theme. PayPal’s new debit card “checking program” links with banks across the country to provide needed services, like deposits, check scanning, and lending. ApplePay partners with Discover and GreenDot Bank, itself a Fintech providing reloadable debit cards.

You’re Still Necessary, But Only For the Boring Bits

Fintechs look to partner with banking institutions because the bank part is hard. There’s lots of regulations, safeguards, and steps you know lots about. Basically, it’s easier to buy space in the safe than to build one yourself. Except they don’t pay you. Your resources get used, your members find great value, and might forget you’re the one holding their money.

“So if Fintechs need us banking institutions, why worry?” It’s a good question. And I’ve answered it before, in reference to lending services. How do you best serve your members? Is it with zero interaction, contact, or even awareness from them that you exist?

Of course not! You’re a part of their lives and they know it.

Well, what if your members never knew who you were? What if you were as recognizable as the brand of tires on your car? (I think I have Dunlop, but I’m not sure, and don’t really care, so long as they do their job) Could you still accomplish your mission?

At Least There Aren’t A Lot Of New Fintechs…

If only. Here’s a short list:

  • GoodMoney – Taking a piece of the credit union playbook, they give shares to all users, making them part owners, then use funds to support charitable works. Mission-focused and mobile-centric.
  • Netspend – Prepaid debit products in lieu of using traditional banking
  • Gotransverse – Backend software to allow complex billing solutions for companies
  • Simple – Banking with an app and debit card
  • Koho – Canadian firm with similar product to Simple. Site makes it clear “We are not a bank”, yet with their card, you don’t really need one.
  • PayPal – Besides powering online payments, making business loans, offering the underbanked a checking solution, they can also replace your banking needs. At least they did for this financial sector journalist.
  • Amazon – Business lending, potential checking, and pretty much anything…they’re Amazon

This list is by no means exhaustive. And, more importantly, the larger firms listed (and many more not included, like big banks and other tech companies) acquire start-ups for millions once they offer a competitive advantage. That’s a competitive advantage over you, to be clear.

What Can Credit Unions Do?

It’s unlikely your team will develop the next billion dollar valuation financial services solution. They’re too busy serving your members and countering the efforts of emerging Fintechs!

For me, the only answer is in partnerships. Some Fintechs seek to replace you. Others, like Kasasa or Econocheck (Disclosure: My company represents this service) focus on adding value to your services, while keeping your name front and center.

Your members will look to make their financial lives easier. Services like Plaid might be part of that answer. However, to remain relevant, you must deliver clarity on your value proposition to members as well. Take a look at some of these Fintechs, understand what they are doing and why they are so popular, and then decide how you can adopt these principles to grow into the future!

My Ultimate Guide To Helping Members In Distress (Audio Post)

Update: The Resolution, and Some Great Lessons

Our hosting provider provided the damaged files (thus, that development site is back) and admitted fault in the issue. Below is a 2nd audio post where I show the other side of customer service and explain what in the world happened (even if you’re not a techie, it’s still pretty wild). Super short summary: It was the polar opposite of that first, critical interaction. And they managed to not blame me the whole time!

Listen while I share the rest of the tale. With some great customer service examples! Note, it goes for 5 minutes.

Original post: Listen First

When things go wrong with computers, they always seem to go big. I bet you have some repressed memories of digital challenges. Given I have had a computer on my desk since I was 5, there are many I definitely blocked out by now.

But this post isn’t about the computer portion. It’s about the service portion. Namely, how to do it right, by experiencing it done wrong. Really, really, wrong.

The audio is about 4:30, and I get that’s a bit long, but it’s worth the listen. If you’re in a crunch, the advice comes in at around 3:30. You’re missing lots of great content, but I want to respect your time!

I would tell the story here, but since it’s sharing advice on how to deal with customers over the phone, hearing for yourself is the best path.

This ICU Day, Let’s Aim for Engagement!

I’m a huge fan of the credit union mission and all it contributes to our communities. You’d know that if you’ve read more than a few lines of any previous post. Of course, you’d also know that I’m not afraid to call out things when they could be improved.

On that note, I have just a few suggestions for this year’s International Credit Union Day campaign. In case you weren’t aware, the theme is, “Find Your Platinum Lining” (at a credit union). Because it’s the 70th anniversary of the event. And 70 means platinum. You knew that, right? I didn’t. Honestly, I thought it was for 75. Turns out that’s diamond (jewelry, to be precise). In fact, all I could find about the 70th anniversary linked it to UK tradition. Thus, Americans will have limited exposure to this “platinum year”. I’d be curious how many people under the age of 70 even make the connection. I asked some people of a variety of ages; none knew that Platinum and 70 went together.

Which raises another point: If our goal is to attract younger members, why use a terminology which they are unlikely to understand or relate? Of course, we’re not only looking to attract younger people, but, let’s be honest, they’re who you want. More Boomers are great, but a member with 50 years of major purchases and life changes ahead of them is substantially more valuable.

Slogan aside, let’s take a look at the unified messaging of the credit union movement (at least here in America). Their newest endeavor is “Open Your Eyes” (to a credit union). It’s a major investment with substantial marketing targeting, ahem, eyesnationwide, from TV to streaming services and even subway banners. Yet it isn’t connected to this ICU Day effort at all. Perhaps it’s not quite ready, because this seems like a missed opportunity.

Another point relating to the Open Your Eyes campaign; a major part was to study what people’s actual reasons for not joining a credit union really were. Turns out, it was two main points:

  1. Thinking you had to be part of a certain company or group.
  2. Concern that you had to leave if you moved, or risk not being able to access your money.

Those are valid concerns which we need to address as an industry. So does the ICU Day campaign do that? Not quite. It reiterates the tired, “we’re different and unique” platform. Great, you give back to your members. You have low rates. Some of the larger banks are already playing the same game. And, frankly, they’re better at it. Capital One just launched a new effort featuring their friendlier branches (“Cafés”), free checking, and other customer-centric offerings, while separating themselves from the “Big Banks”. Never mind they are one; their marketing presents them otherwise. And it is reallygood. Ally takes a similar approach, setting themselves apart from the “Big Bankers” who don’t care about you while making billions off your money.

More than a third of Americans are members of credit unions. Yet they have only 7% market share. That’s an enormous gap. And it won’t be solved by saying how low your rates are or that you give back. It’s providing reassurance that people can join, money can be accessed anywhere, and then empowering each CU to go deep on mission.

The big banks are better at differentiating themselves from “The Big Banks” than credit unions. This ICU Day, let’s open peoples’ eyes to credit unions by showing how they make each community better. And how, if you join (because you can!), you can both reap the benefits and help inspire growth as well.

That’s a platinum lining everyone can enjoy!

Happy International Credit Union Day!

Older posts

© 2018 Credit Union Geek

Theme by Anders NorenUp ↑