How Do Credit Unions Attain and Maintain Top of Wallet?

February 14, 2017

Consumer preferences aren’t a mystery. If your credit unions hope to be top of wallet – and stay there – they need a seamless + secure member experience. Here are seven facts that help explain what we mean:

  1. Payments – and, in fact, nearly all member experiences – are increasingly digital and mobile. We’ve all seen the statistics: There was a 200+ percent increase in mobile transactions in 2016. Half of all card issuers believe that mobile will represent 25 percent of their debit transactions in the next five years. This trend isn’t limited to payments, though. Online/mobile banking, in-branch transactions, member rewards programs – everything is increasingly digital.
  2. Meanwhile, the stakes are high for digital transactions. Members expect a seamless, secure experience. That is, they want simple elegant interfaces, effortless movement between channels, and the best security to protect their money and data. It’s not an either or: Members expect both seamless and secure.
  3. Credit unions need a new kind of partnership. It’s not just technology they need, but also partnership that demonstrates a deep understanding of the marketplace – and a deep understanding of what credit unions want and need in order to provide members with loyalty-inspiring products and services.
  4. Interchange revenue is more important than ever for credit unions – now accounting for 27 percent of non-interest income. If credit unions hope to grow in the years to come, payments are a critical area of focus.
  5. Fraud is a more difficult challenge than ever. Migration to EMV cards is causing a spike in card-not-present fraud, causing a 215 percent rise in the rate of fraud attempts against online merchants. Fraud volume is up 11 percent since October 2015. And about 2.5 times more dollars are at risk with every transaction.
  6. Fraud cannot be fought in a vacuum. While shutting down every transaction will prevent fraud, it will also cut off revenue and wreck your member experience. Maintaining a low false positive rate is a priority at CO-OP for precisely this reason. Security needs to be seamless – and to achieve this, credit unions must think of security in the context of member service.
  7. Growth in the digital era takes a new set of skills and insights. Case in point: Being top of phone is not the same as being top of wallet. Once members load a card into a mobile wallet or online store – especially as a default payment – it’s likely to stay top of phone indefinitely. The payoff is high. But motivating members to do this can require multiple efforts, from making it possible for cards to work in wallets like Apple Pay to incentivizing usage based on cardholder behavior.

CO-OP recognizes the importance of seamless, secure member experiences to the growth of all credit unions – and, in turn, to our own growth as we move into a digital future. We’re working to provide credit unions with products and solutions that keep them competitive in an increasingly digital world. And we’re evolving to make our clients’ experiences streamlined, responsive and dynamic. Together, we have the opportunity to make great strides. 

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