In the landscape of financial services, particularly within credit unions, the initial onboarding experience for new members is becoming increasingly critical. Recent studies indicate that between 25% and 35% of new members may terminate their relationships within the first year, with a significant proportion deciding to leave during the first 90 days. This early phase is crucial, as it shapes new members' perceptions about the value and support they can expect from their credit union.
With the evolving capabilities of artificial intelligence (AI), credit unions are now presented with an opportunity to enhance their onboarding processes significantly. As outlined by CUinsight.com, the move towards more personalised and engaging member interactions can play a pivotal role in reducing churn rates and fostering long-term loyalty.
The importance of this initial period cannot be overstated. During these 90 days, members form fundamental impressions that can determine whether they perceive their credit union as an alternative to traditional banks and increasingly popular fintech solutions. Data from J.D. Power's 2024 research indicates a notable decline in consumer trust towards retail banks, with less than half of respondents confident in sticking with their current bank for the forthcoming year. Notably, 26% of those considering a switch attributed their dissatisfaction to poor service experiences.
To capitalise on this opportunity, credit unions must transition from traditional, generic onboarding practices—characterised by standard welcome kits and emails—to a more nuanced approach that celebrates the unique nature of each member's journey. These outdated methods often fail to address individual needs, neglect proactive support, and miss crucial opportunities to build emotional connections.
AI technology presents three transformative changes to the onboarding process, moving away from transactional interactions to meaningful engagement.
The first transformation centres on personalising the onboarding experience based on how members were acquired. Each channel through which new members join presents different expectations and needs. For instance, individuals who join in-person may appreciate a more personal relationship, while those who come on board through online channels might require more proactive engagement to foster their involvement. AI can facilitate the segmentation of members, allowing credit unions to tailor follow-ups and increase the relevancy of communications, creating a seamless blend of personal and digital interactions.
The second area of AI integration focuses on proactive support. By leveraging AI to analyse first-party data and member behaviours, credit unions can preemptively engage with members at critical moments. For example, should a new member not utilise their checking account as anticipated, a prompt from a branch representative could highlight features and suggest products tailored to their needs. Such proactive engagements not only bolster the credit union’s supportive image but also actively demonstrate their commitment to fostering members' financial health.
The final aspect involves creating meaningful, immediate experiences for new members. The push towards hyper-personalisation, enabled by advanced AI capabilities, allows credit unions to utilise detailed demographic and transactional data to deliver tailored interactions at scale. For instance, a young professional opening their first savings account could swiftly receive personalised budgeting tips, incentivising them to engage with the credit union’s services. Similarly, families financing a home might get a direct mail with discounts on local activities, all while receiving digital guidance on home ownership matters.
Integrating AI into onboarding practices heralds a shift towards more enriching member experiences, transforming the credit union's relationship with its members during those pivotal initial 90 days. The landscape is being redefined, and credit unions that embrace these advancements stand to not only retain members but also deepen their connections, paving the way for enduring loyalty.
Source: Noah Wire Services