Are You Keeping PACE With Members’ Banking Habits?

September 2018: Vol 41 No 9
New survey data sheds light on consumer behavior and concerns.
businesspeople racing and keeping pace around a track

Sponsored by FIS   

FIS has just released the results of its first-ever “Performance Against Customer Expectations” survey of credit union members, and it finds mobile banking catching on with members of all ages as more institutions roll out mobile apps after years of resistance. 

Currently, 72 percent of all credit union interactions are done digitally—via smartphone, tablet or laptop/desktop PC—with millennial members (ages 19-37) the most active users by far. The smartphone is now on par with online banking usage, with both accounting for 46 percent of digital banking interactions, while tablets account for 8 percent of such interactions. 

In terms of overall performance, PACE finds that 92 percent of members are “extremely satisfied” or “very satisfied” with their credit unions, a much higher satisfaction rate than what customers of other banking providers report. 

Members Leverage a Patchwork of Financial Apps

According to the PACE research, financial mobile apps are finding greater usage and traction among members doing “core” business on their smartphones, such as making financial transactions, planning finances, investing and even applying for loans. Millennials and Gen Zers are more likely than other age cohorts to use mobile apps to budget and manage cash flow. 

Overall, four in 10 (42 percent) credit union members report using mobile apps more than they did a year ago, and 36 percent of members who have mobile devices have made an payment using a mobile wallet, virtual card or person-to-person service in the past year.  
This highlights a needed shift in strategic thinking for credit union leaders, as their mobile interfaces—not their physical locations or even their personnel—are quickly becoming the “face” of the institution. A lacking or poorly performing mobile app may soon be enough to turn off potential new members, something no credit union can afford.

The PACE study also finds that members are not shy about looking beyond their credit unions for help making financial transactions, as 57 percent report using alternative financial services in the past year, P2P payments being the most popular outside service by far. While most members’ financial transactions are still carried out via credit card (37 percent) and debit card (30 percent), data suggests mobile wallets and P2P services are playing an ever-bigger role in members’ lives.  

Hope and Worries As Retirement Approaches

This should not come as a surprise, but credit union members, like most U.S. consumers, believe they are woefully unprepared for retirement. However, 12 percent of members expect to receive an inheritance or wealth transfer in the coming decade, and bolstering retirement savings is the top planned use for those assets, according to the PACE study. Overall, upward of $10 trillion in assets are expected to change hands in the coming decade as the greatest wealth transfer in history gets underway. 

Credit union members are more concerned about paying down their debts than overall U.S. banked customers, who would rather invest a wealth transfer windfall into stocks and bonds: credit union members chose “pay off credit-card/personal debt” as the second most common way to use their inheritance. 

A clear need is emerging for both great financial advisory services, especially around retirement readiness, and personal financial management tools and education that help credit union members alleviate debt pressures.

Recognition Is Still an Issue

As noted, credit unions scored remarkably well in meeting member expectations across the board in the PACE study. The only area where there is notable dissatisfaction is recognition; roughly 45 percent of members say their credit unions fall short in terms of “rewarding me for my business.”  

Improving customer recognition—and by extension, loyalty—should be a strategic priority, as loyalty and rewards programs remain a primary driver of new deposit accounts for both banks and credit unions. Likewise, improving recognition of current members is a great way for credit unions to boost engagement, usher members into new products and services, and build on their already high satisfaction. 

FIS is a global provider of financial technology solutions. Headquartered in Jacksonville, Fla., FIS serves more than 20,000 clients in over 130 countries, powering billions of transactions annually that move over $9 trillion around the globe.FIS logo