The Financial Brand Insights - Spring 2021

Data-Based Personalization is the Key Differentiator in the Digital Arms Race for Credit Unions

With years’ worth of shifts in digital consumer behavior squeezed into months following the global pandemic, the urgency to keep up has reached new heights. A Boston Consulting Group (BCG) survey has determined that one in four customers plans to either use branches less or stop visiting them altogether post-COVID. In response, most large banks and a few small community-based organizations have doubled down on digital. Credit unions, however, are uniquely positioned to augment their tried and true differentiators with personalization: Better customer service, strong local ties, and relationship-driven banking. Historically, this is how they find the win against their much larger competitors. Fundamentally, they have a right to win this battle. After all, impactful personalization isn’t brought on by the most sophisticated marketing stack, or the largest budgets — but by those with the deepest understanding of their customers. BCG states it succinctly: “True personalization is grounded in developing a deep understanding of each customer’s unique needs and orchestrating a set of tailored experiences across digital and human channels. A similar approach might be taken by a skillful sommelier who changes a wine recommendation on the basis of a customer’s tastes, mood, and resources. Personalization potentially creates a win-win scenario for financial institutions, the members they serve”

By Cassandra Stumer Product Manager at

Imagine. A singular financial platform has emerged the winner in the digital arms race. The customer relationship is facilitated through a complete view of their preferences, needs, and risks. Following the lead of Chinese predecessors like Alibaba, Tencent and Baidu; the platform of the near future offers fully-fledged banking services alongside a hyper-personalized marketplace and content hub; all powered by a trove of customer data. Margins dive at credit unions when faced with fierce competition from the Amazon or Google Bank. The threat is only compounded by technologically sophisticated FinTech entrants. Fast following Ant Financial, challengers have elevated from stand-alone payment apps to offering comprehensive financial services such as wealth management, consumer and business loans, credit scoring and more. Their point solutions are differentiated through niche market segments or social purpose value. Of course, most bankers are keenly aware that this is a future we must brace for — a matter of when and not if. Big tech and FinTech entrants, with personalization at the center of their business models, have normalized the exchange of customer data in service of highly customized and convenient experiences.


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