BY MEREDITH DEEN
Is your credit union feeling the pressure from the new crop of non-traditional market entrants? The competition might be growing, but CUs still possess the advantage if they can adapt to the changing times. Discover the five obstacles standing in the way of doing things the new way and how to overcome them.
Financial institutions face a growing threat from new market entrants. Silicon Valley lenders, Target and Walmart, Google and PayPal, and even virtual payments and bitcoins are gaining mainstream acceptance.
These market disruptors challenge the traditional financial services business model. For example, online lenders like Kabbage and Lending Clubfocus on operational efficiency as well as speed and convenience of product delivery.And Walmart’s no-frills, no-overdraft GoBank checking account is all about simplicity and low cost.
As banks and credit unions react to this market disruption by streamlining operations and increasing attention to electronic delivery, they have an advantage the new online competitors do not – their branches.
Consumers certainly love the convenience of mobile and online, yet there is only so much that hitting the FAQ button or live chat can offer. When it comes to important financial decisions, consumers like to talk facetoface with a real person. That is even true of branch-phobic Millennials, according to several studies.
Branches are the right setting for consultative services. But the approach of FIs shifting their bricks-and-mortar locations from transaction hubs to sales and advice centers ist he “old way of doing things.” Indeed, many remain tethered to an outdated deposit-centric branch model, despite their customers’ and members’ heavy adoption of mobile and online banking.