13 minutes
Put a smooth mobile experience ahead of flashy new features—but don’t forget the basics.
If you’re like most credit union executives, you probably spend a lot of time thinking about your mobile app. That only makes sense because mobile is becoming a top way members interact with your credit union.
But what’s the key mobile functionality you should be worried about? Security? Payment features? Personal finance management? Loan applications and payments? Card controls?
Several credit unions and consultants say it’s actually not a single feature or functionality you should be most worried about. Instead, worry about making your members’ experience easy—as easy as ordering from Amazon or calling an Uber. Said a little differently, the best credit union mobile app isn’t the one offering the most features but the one delivering the least frustration.
Megan Cummins, strategic consultant at CUES Supplier member Engage fi, Tampa, Florida, spends a lot of time examining credit union mobile offerings—and she sees a lot of problems. “There’s a big difference between the experience you get when you sign on to Bank of America or Chime and what you get when you go to many credit unions,” she says. “A lot of credit unions offer a very clunky experience.”
The problem for many credit unions lies in their back office and the challenges they face there when trying to improve the user experience, she explains. Some of those challenges are IT issues, such as compatibility problems or limited resources and capacity for upgrades, while others may be staff concerns. For example, Cummins says credit unions can run into staffing issues when they want to add live video chat to their mobile apps. “You can say, ‘We’re going to add a chat,’ and then you’ve got back-office people who have been answering phones for the last 30 years who may be reluctant to go on camera. There’s a cultural aspect that they have to deal with as well.
“I think a lot of credit unions are now getting to a point where it’s like: ‘OK, I don’t care what happens in the back office. We will have to fix that, but we really need to focus on the user experience and then fix everything that’s broken on the back end.’”
Cummins says in many cases credit unions have lagged in providing a better user experience because their digital vendor has been slow with third-party integration, but that is improving as vendors realize the importance of mobile integration and upgrade their service.
Credit unions also face some special challenges that banks often don’t, she says. For example, members want to be able to open an account online, something they can’t do in many credit union apps at this point. That’s because there is the challenge of opening a membership, which is typically complicated by restrictions related to residency or occupation.
She finds that credit unions often want to talk about adding artificial intelligence and bots to their mobile apps. That’s a great goal for the future, but Cummins’ advice is to first make sure it is easy to open an account before looking at other high-tech features.
Keep It Simple
Kate Rogers, chief innovation officer at $590 million University of Illinois Community Credit Union, based in Champaign and serving 57,000 members, says about 85% of the CU’s logins are on a mobile device. So, her team’s goal is to make it as easy as possible to sign in.
“Ultimately, we are not talking about comparing ourselves to the credit union down the street, or the small community bank that might have some legacy technology,” notes Rogers. The comparison, in members’ minds, is to their everyday mobile experiences with e-commerce and retail giants. “Our members are saying, ‘How does my Starbucks app work? How does Amazon work?’ That’s the experience our members have come to expect [from mobile], and that’s the experience we need to deliver.”
Rogers says her credit union doesn’t want mobile banking to be a chore. “We don’t want to be another errand on their list. We want it to be so simple and easy that they don’t even think about it.”
University of Illinois Community CU has experienced strong growth in its checking products and debit cards just by making it easy to open an account with a few clicks, she reports. This approach, with a focus on ease, helps build a relationship with the member that can increase the level of trust and boost the CU’s share of members’ financial activities.
Chris Miller, senior director at CUESolutions provider Cornerstone Advisors, Scottsdale, Arizona, agrees that CUs should focus on providing a better user experience, not on providing more functionality. He suggests they pay attention to digital providers who are tracking eye movements as a member navigates their app. “You want it to be seamless for your eyes. Having that capability for your mobile app is really going to set you apart.”
Unify, But Don’t Overwhelm
But having a top-notch mobile app is not just about a well-designed experience. There definitely are features that members expect and demand: card controls, personal financial management tools, AI-driven chatbots, easy money movement and access to credit scores. Some of these features are table stakes today. And Miller says it’s essential that credit unions offer the same services in both their mobile and online banking platforms.
CUES member Frank Macrina, SVP/products & channels at $5 billion Virginia Credit Union, based in Richmond and serving 320,000 members, says the CU currently has different vendors for its desktop and mobile applications. The credit union is working to bring them under one provider.
He notes that PFM tools are part of the ante just to play for most credit unions, and they are a vital offering if a credit union provides wealth management services.
CUES member Joe Lovasz, VP/products and payments at Virginia CU, says that providing chatbot capability requires sensitivity; people will get frustrated if it becomes clear they are getting responses from a bot that is just recycling canned answers, so your platform needs to be able to easily escalate to live chat if necessary.
He also says it is important to offer members the ability to seamlessly make payments—to the credit union in particular. “They look at it and say, ‘I’m trying to give you money. Don’t make it hard.’”
Macrina notes that agility—being able to adapt quite quickly—is also a big focus of the credit union’s mobile efforts. “We work really hard to deliver value more iteratively and frequently, but not too fast that we overwhelm members,” he says.
Rogers also thinks it’s better to have frequent, smaller mobile updates rather than a major upgrade once a year that creates enough difference in member experience that it results in frustration. “Consumers are used to small changes, but they don’t like big changes, so whenever you can minimize that and just enhance their experience, that’s what we like to do.”
Credit Scoring and Control
“Credit scoring used to be a nice-to-have feature that people found in their credit card applications, but now it is part of a credit union’s mobile app,” says Jason Schwabline, chief strategy officer at CUES Supplier member Alogent, Peachtree Corners, Georgia. “It’s become a feature that teaches members financial wellness.”
During the pandemic, credit unions saw some mobile users checking their balances up to 10 times a day. Now, many are also checking their credit scores whenever they get an alert that it has changed. “It’s become one of those things they hit and refresh,” Schwabline says, noting that many members, especially younger ones, realize the importance of monitoring their finances for unusual activity or data breaches.
This vigilance corresponds with the importance members place on effective card controls—features that let them freeze their cards or issue new ones should a problem arise. While older members might panic when something unusual happens in their account, Schwabline observes that younger members say, “I can stop all my activity till I figure out what’s going on. I know I can get my funds back; I know I can access things and move forward.”
Schwabline also notes that many credit unions now are looking to upgrade their apps and replace existing elements that have become tired. That need for a refresh is driving feature change and speeding up the process of enhancement. But those changes must be made with member priorities—and concerns—in mind.
For example, from a credit union’s internal perspective, a key feature of modern mobile apps is improved marketing capability that allows the CU to target members without overwhelming them.
Schwabline says marketing has always been part of mobile app solutions, and related functionality provides important information to members about new products and services—but it has to be done in a “noninvasive way.” He says members have become more concerned and more knowledgeable about privacy protection, especially since Apple raised the bar with its recent iOS changes. But app usage can still provide a wealth of data that gives credit unions a better sense of what a member is doing and why, “and you want to provide helpful tools and services for their specific needs, rather than come across as someone watching their every move.”
Credit unions need to find ways to allow members to view and control all their investments and assets within their app, Schwabline advises. “Credit unions have become very aware of people spending time in the app, and they want them to stay there for all of their banking needs. But consumers frequently leave the app because they need to go and manage assets elsewhere.”
Another member-empowering feature that should be in a mobile app is a way to resolve any disputes or problems without going elsewhere, he adds.
Schwabline also urges credit unions to simplify their apps to make it easier for members to find what they’re looking for. “We used to force people on a journey and say, ‘Listen, I know what you’re looking to check, but you’re going to have to go three pages deep inside our application to find it.’ Now, the goal is to make the user journey simple and intuitive; we don’t want to see a high abandonment rate. We also don’t want to see frustration, because frustration means a phone call.”
Make It a Game
$7.3 billion, 338,000-member Michigan State University Federal Credit Union, E. Lansing, Michigan, has been working on ways to use its payment products to increase member engagement with its mobile app. Last fall, the CU partnered with Flow Networks to test a gamification approach tied to the university’s football games. The credit union invited 30,000 members to sign up to play Game Day Experience, and about 5,000 joined in.
“As more people move into the digital channel, we need to find ways to build a digital relationship with them,” says CUES member Benjamin Maxim, chief digital strategy and innovation officer at MSUFCU. “Now, we’re trying to figure out ways to get people to log in to have a digital experience with us.
“In the past, people might have come into the branch to build that relationship, but now we need to figure (out) how to do it digitally, so the Game Day Experience was born out of this idea of boosting digital engagement through gamification.”
Ami Iceman-Haueter, chief research and digital experience officer at MSUFCU, says the credit union is striving for a deeper digital relationship. “We don’t want to just be the place they’re coming to check their balances,” she explains. “We have that traffic already. We want to start creating more opportunity for them to feel like we are a resource—that we’re a place that they can come to, whether it’s in a game sense, or it’s understanding their financial education tools, or it’s starting to save for the future. We want to offer those opportunities so that we become a hub for their financial wellness.”
Maxim said the goal of Game Day was to encourage members to use MSUFCU’s credit card and to study a way to increase engagement when they do.
“You swiped our card, so what can we do to engage with you at that moment?” he says.
After making a purchase, members got a chance in their mobile app to kick field goals for 45 seconds and move up a leaderboard, getting a prize at the end. Top Game Day Experience players received $200 gift cards. The Game Day Experience test was a victim of its success and maxed out the server. Now, with more capacity in place, the credit union is looking at offering Game Day contests with other sports. It’s also thinking about how to enhance that payment experience by offering products or discounts on a member’s next purchase.
“It really is the start of how we build that engagement,” Maxim says.
A panel of more than 600 members helps MSUFCU test new ideas before they are rolled out. Maxim says the credit union has asked critics of past efforts to join the panel so they can provide input and identify potential problems. Iceman-Haueter says she hopes to expand that group to 1,000 people this year.
The credit union invites members to join its innovation center, called The Lab at MSUFCU, so they can help it turn innovative ideas into advanced financial technologies.
A Digital Journey
Maxim says MSFUCU has gone through a journey with digital suppliers. A few years ago, it was relying on external vendors but became unhappy because they weren’t responsive enough. “They were just not keeping up with what we needed to do and not really keeping up with how the internet and the web was evolving, so we built our own apps, our own websites and our own online bank.”
Now, in part because of staffing challenges in recent years, the credit union has gone in a different direction. MSUFCU has partnered with CU NextGen, Wilmington, Delaware, a credit union service organization formed in 2021 to provide technology and automation solutions, to develop a new digital banking platform called Nextly that will launch later this year. Maxim calls it the next generation of digital banking.
Iceman-Haueter says Nextly will provide hyper-personalization that should be more engaging for members. “The industry needs to flex more than we do now to respond more quickly and create a personalized experience for our members,” she adds.
Cummins says despite all the challenges and changes in the mobile space, most credit unions—regardless of size—believe that they can meet members’ mobile needs because they see vendors moving quickly to add more capabilities. One credit union she’s working with only has 12 employees, but it is determined to offer a full range of mobile services.
“[Vendors are] making it easier, so I think even the smallest credit unions are optimistic because they can offer the same services as the large banks,” she says. “There’s nothing that even the smallest of credit unions can’t do, really, which is kind of amazing when you consider the millions of dollars a huge bank has in their tech budget.” cues icon
Art Chamberlain is a writer who focuses on the credit union system in the U.S. and Canada.
