Credit Union Geek

Marketing, Strategy, and The Force by Joe Winn

Tag: challenges

Apple Reinvents (Improves?) the Credit Card

Today, Apple held their seasonal keynote event, to highlight new services in a range of categories. You may get a kick out of their Apple TV+ lineup. Maybe you’re stoked about reading all your magazines on your iPhone with Apple News+.

But you’re here for Apple Pay improvements. We are talking about the banking world, right?

What is Apple Card?

In the most simple terms, Apple introduced a credit card. They’re calling it Apple Card. (PS – They partnered with Goldman Sachs. Remember talking about that?)

It’s a “mobile-first” card, in that you do most of your spending, tracking, and reward redemptions all within the app.

The entire platform lives within the native Wallet app in your iPhone. No more downloading a banking app just to pay the credit card bill.

Apple Card - Physical
Titanium. Seriously. (And no numbers to get stolen!)

You can track spending by category, merchant, and even view trends. Payments are simplified, with realtime interest calculations based on what you choose to pay. And rewards deposit daily (they’re calling it Daily Cash) into your Apple Cash account (we’ve spoken about this before).

And the physical card is shiny! (It’s made out of titanium!)

Fabulous metal aside, you care about what the card offers. And is it a threat to your institution?

Spoiler: Yes. Probably.

The Apple Strategy

With more than a billion active devices, any time Apple does something, it matters. Few companies have the ability to affect the behaviors of so many so quickly. I’m not even suggesting you try.

What they did with Apple Card is look at all the pain points within the credit card realm:

  • Applying
  • Tracking spending
  • Paying
  • Redeeming (and understanding) rewards
  • Understanding interest costs (and how to minimize)
  • Getting questions answered

Then they added a bit of Apple touch to align the offering with their mission:

  • Privacy
  • Security
  • Beauty (it’s subjective, sure, but the card is so pretty!)

The result is a mobile-first, simplified, and streamlined vision of a credit card.

Here’s how they addressed those pain points:

  • Application: Tap to apply. Done. It automatically issues the digital version, adds it to your Wallet, and that’s it. The physical copy gets mailed.
  • Tracking spending: The app color-codes spending categories, gives merchants their real logos, and uses machine learning (AI) to decrypt those obscure “IC SPEND A-MERCH 14312” charges (it was the Greek food truck, by the way). It will even show it on a map and link to it on Yelp!
  • Paying/Interest: Graphical wheel that you slide your finger around to see your payments change, along with the interest accrued. Financial education with a swipe.
  • Rewards: 3% at Apple, 2% using the digital version, 1% with physical card. Redeems automatically as cash every day (with notation) into your Apple Pay Cash card. Which you can spend at merchants, online, send to friends/family, and more.
  • Privacy: No merchant gets any details about you on any purchase.
  • Security: Every payment uses a one-time code (just like any other ApplePay transaction). Suspicious transactions appear as notifications (and can be approved or denied with a tap). A new card is sent out and no changes needed.
  • Support: Using Business Chat for iMessage, customers can simply text their question to the service. A person answers and helps them out. Through their normal messaging app.
  • Fees: They don’t have them. Any. At all.

Can Your Credit Union Compete?

That’s a great question. On the surface, no. You cannot create such a streamlined system with the tight integration between bank and provider.

However, all is not lost!

I’ve made a point to talk about partnering in many previous posts. It’s just as valuable (if not more so) today!

Your institution is good at the money part. You might also be great in the relationship area.

But, let’s be honest. You’re not awesome with the technology. It’s a constant effort to keep up with evolving expectations as it is, right?

Two People Talking Over Coffee

That’s why you need to partner with companies who specialize in these things. My last post talked about making member communication simple. That’s one of their pain points!

Another post addressed the issues with boring transaction sheets. Am I spending too much on hummus? (The answer to this is, of course, never!)

And the most cynical/sarcastic/actually realistic answer to this question:

Sure, because it only works for members with an iPhone. Look at all those Android users you can still attract!

Mobile First = Simple First

White iPhone in Hand

You’ll hear a lot of talk about how “mobile first” design is essential. That making services for a computer is immediately alienating your target audience. I’m betting the firms which sell you these platforms will be climbing over each other to talk about how their stuff is so mobile first ready.

It’s not wrong. There’s a lot of value to making sure your offering is accessible from where people are.

However, I want to be clear:

Mobile First doesn’t just mean you need to make sure it works on phones.

Mobile First means that your driving strategy is:

How can we make something so simple, so intuitive, so obvious that members can do what they want in a few seconds?

Apple stepped back and saw many of the traditional challenges in credit cards. Then, they built a system (with appropriate partners) to overcome these “yucky spots”.

Filament Bulb Hanging

It’s about looking at what the real problems are, and how you can address them.

If Edison had only tried to make a brighter candle, he would never have invented the light bulb.

To help illuminate (pun actually not intended, but enjoyed) your best path forward, I encourage you to Subscribe to my blog.

Image credit: Apple

Thinking Outside The Grid

Originally published on CUInsight.com

A lot happened at the most recent CUNA GAC. Though I couldn’t attend, it was apparent even to this distant observer that an attendee couldn’t possibly experience it all. Unless you had two years to do so! Between the sessions, round tables, keynotes, and Hill Hikes, interviews took place for a variety of industry publications. I wouldn’t fault you for missing, oh, 90% of them!

One of these segments was shared by LSCU (the League of Southeastern Credit Unions, no affiliation). In it, they discussed disaster plans with Ted Koppel, namely, power grid failure strategies. As you know, a branch going down is an inconvenience. Imagine if an entire city was dark for days. What services fail first? How do you manage member funds? Do we fall back to a cash (or seashell)-based economy?

You would be correct to say the primary concerns center around medical care, providing clean water, and distributing food to the community. But what about after that infrastructure has emerged? How long can you operate on battery backups and satellite phones if only overloaded mobile cell towers (usually on trucks) are available?

The discussion raises interesting questions and requires, wait for it, outside the “grid” thinking. Being an environmentalist, my first thought is focusing on adoption of solar and other self-sustained energy sources. These can substantially increase your capabilities during a utility outage, while fostering a community-based energy economy (think local farming, except your product is electricity). Plus, reducing emissions from energy production benefits everyone.

Your goal in building disaster resilience is to ask the right questions, ahead of time. But what if the “disaster” isn’t in a loss of power or something your crisis team cooked up? The other side of thinking “outside the grid” is to look at problems from a new perspective. Instead of considering how you can deal with a situation, imagine what you can do to avoid falling in to it entirely. How can you be, “off-grid”, as it were, to the issue?

Think of any challenges that arise throughout your member experience. Yes, coming up with simple ways to address them is important, but is it possible to eliminate the problem from ever occurring? I’ve seen a lot of credit unions using a graduated rewards program. However, none of them offer easy access to a chart showing what I need to do to be considered “Bronze”, “Platinum Plus”, or “VIP Gold”. I know these loyalty systems are tempting, but maybe you’re approaching them in a way which creates complexity no matter how well it’s planned. When the original iPod was released, a famous parody video emerged showing the packaging had Microsoft’s marketing team designed it. Sure, their final product told the customer a lot more, but, in reality, did it? Was the simplicity a crutch to be overcome or a victory in messaging on its own?

You’ve heard consultants suggest “outside the box” thinking. That’s so cliche. Who’s thinking “outside the grid”?

Image credit: http://energy.gov/sites/prod/files/styles/article_hero/public/Hero_Grid_0.jpg

Lobby In The Lobby For Your Lobby

Grammar nerds will notice the title used each version of the word: verb, noun, noun, respectively.

With the Big Event in our midst, it’s top of mind to consider how discussions outside your institution can have wide-ranging effects. From proposed regulations to promulgating existing ones, there’s a lot to your credit union which is decided by those whom you never meet.

Remember being told that every vote counts? This advice applies to your institution as well. What you don’t say cannot be discussed or considered. Every credit union thinks their members are unique; what specifically distinguishes them and does that make you more or less affected by possible legislation?

There are plenty of advocacy groups and lobbyists for the credit union industry, from CUNA to NAFCU and more. I’m not getting involved in it. However, you should. They are working in the best interests of the majority of institutions, but perhaps something they propose will create more issues than solutions for you! Think back to Rumsfeld’s “unknown unknowns”; whether you know or not, it will still create an impact. No one wants to be on the ignorant side of a situation.

What happens in DC doesn’t stay in DC. Same can be said for your own state governments. Be a voice. Create political influence. When you’re building strategic plans, do they take into account possible changes? Are you ready for “better” regulation or “worse” policies? How are you helping find a solution which works best for your institution and members?

While I wish you all an amazing time of creating Powerful Cause and Positive Effect at this year’s GAC, remember the risks of living in a silo. Think of the Buffalo Springfield song, “For What It’s Worth”…there are some powerful lyrics which resonate here as well: “A thousand people in the street, Singing songs and carrying signs, Mostly saying, ‘hooray for our side.'” You all know how much good credit unions can do for their communities. I’d bet those legislators consider it an “unknown unknown”. Make your Positive Effect known!

© 2019 Credit Union Geek

Theme by Anders NorenUp ↑