Join us at Future Branches 2024 in Austin, TX →. Use discount code for 25% off registration: FBA25SP.

Home>Insights>Core Deposit Growth Strategy: Part 3

Core Deposit Growth Strategy: Part 3

Jul 20, 2023Growth

Back to the Future: Data-Driven Credit Union and Community Bank Strategy in Retail Banking

Thriving Post-COVID core deposit growth strategy in financial institutions

In Part One of our Core Deposit Growth Strategy Series, we explored the financial landscape from 2000 to the present, highlighting the impact of interest rates and the economy on personal and corporate budgets. Part Two delved into key metrics in the credit union and community bank industry since 2013, with a focus on the pandemic’s effects and the position that has left credit unions and community banks in today.

Finally, in this last installment, we’ll provide specific steps for data-driven credit union and community bank strategy to help you attract low-cost deposits in the post-COVID economy.

Embrace Data-Driven Technology for Enhanced Customer Service

In today’s competitive financial services industry, technology is a non-negotiable element for delivering exceptional customer service and fostering engagement and loyalty. Financial institutions must keep pace with the ever-evolving digital landscape to remain relevant. Additionally, credit unions and community banks should invest in cutting-edge technology to meet member or customer needs and prioritize seamless functionality. Adopting a data-driven approach ensures your financial institution can analyze customer behavior, anticipate needs, and provide personalized solutions promptly.

Target Generation Z for Low-Cost Deposits

Likewise, the Gen Z demographic represents a significant market opportunity. These digital natives have grown up in financially turbulent times and are accustomed to budgeting. Credit unions and community banks can offer financial education and enablement to help this generation reach their financial goals. Therefore, by understanding Gen Z’s unique preferences and needs, your institution can attract them as loyal customers and encourage them to utilize low-cost deposit options.

Reinvent Branches for Retail Banking Success

Despite predictions of their demise, branches continue to be essential in credit union and community bank retail delivery strategies. Branches may be smaller and more service-oriented, but they remain a valuable touchpoint for members or customers, acting as an in-person advisory source for customers’ important financial questions. Markedly, financial institutions should focus on strategic branch optimization and placement, emphasizing convenience, responsiveness, local decision-making, and outstanding customer service. Engaging and knowledgeable branch staff can make a significant difference in member or customer satisfaction and retention.

Compete Intelligently Against National Banks

Credit unions and community banks often face competition from large national banks with extensive resources. However, your institution has a unique advantage in their ability to focus locally. Therefore, by concentrating on key markets and leveraging your community connection, availability, and exceptional customer service, credit unions and community banks can carve out a more personal niche that resonates with their local communities.

In challenging economic times, members or customers seek additional support from their primary financial institutions. To build loyalty and retain customers, credit unions and community banks must provide an extra touch in personalized financial advice, problem-solving assistance, and guidance on growing their finances.

Create a Strong Market Presence

To stand out in the financial services crowd, your institution can employ a strategic blend of branches, ATMs/ITMs, and billboards to create the impression of widespread coverage. By carefully positioning these elements, credit unions and community banks can effectively showcase their presence and attract potential members or customers.

Prioritize Accessibility and Consistency

Customers expect easy access to their financial institutions through various channels, including voice, automated response, chat, text, and email. Your financial institution must ensure consistent, correct, and timely responses across all these channels. Investing in staff training is crucial to delivering a seamless experience for members or customers, regardless of the interaction method.

A woman paying with a debit card on a portable card reader

Encourage Debit Card Use for Budget-Conscious Customers

Promoting the use of debit cards as a convenient way for members or customers to access their funds aligns well with Gen Z’s focus on household budgets. Additionally, offering a connection to an online budgeting tool can further appeal to this segment.

Highlight Local Connections and Customer Testimonials

Credit unions and community banks should capitalize on their strong local connections, emphasizing factors such as location, community investment and involvement, decision-making, and ownership. By sharing success stories and customer testimonials, credit unions and community banks can demonstrate the positive impact they have on their customers’ financial lives.

Prioritizing Human Assistance in a Digital World

Despite the growing digital landscape, customers still value human expertise when it comes to financial advice and complex transactions. There’s no replacing the power of a personal advisory connection when it comes to building comfort and assurance. Financial institutions must strike the right balance between self-serve options and access to human assistance to cater to diverse customer preferences.

Build with Confidence

Put LEVEL5’s proven expertise to work for you. De-risk your future growth with the strategy, technology, site selection, design, and build services you need to launch the next phase of your financial institution’s branch network.

A couple smiling a shaking hands with a bank representative

Why Customer Engagement Matters for Credit Unions and Community Banks

Active engagement is fundamental to building trust and fostering quality relationships between credit unions and community banks and their members or customers. Both entities must recognize the distinction between customer experience and customer engagement as they play pivotal roles in driving long-term retention and profitable business growth.

Without meaningful member or customer engagement, levels of trust can wane, relationships may weaken, and loyalty could be at risk. By prioritizing customer engagement efforts and providing a personalized experience, credit unions and community banks can strengthen their position as trusted financial partners, leading to higher customer satisfaction, increased loyalty, and sustained success in a competitive market landscape.

This is a distinction that many credit unions and community banks are still only beginning to fully contend with. In a survey, we asked credit unions and community banks if they currently distinguish a difference between member or customer experience and customer engagement, but only a third of institutions (33%) said they currently make this distinction.

Embrace Data-Driven Strategies for Lasting Customer Loyalty

As financial institutions navigate the post-COVID economy, a data-driven credit union and community bank strategy is vital for attracting low-cost deposits and cementing member or customer loyalty.

By leveraging technology, understanding Gen Z, optimizing branches, and providing exceptional customer support, financial institutions can thrive in a competitive landscape dominated by large banks. Engaging with members or customers and providing valuable guidance will create lasting relationships, ensuring continued success for credit unions and community banks in the financial services industry.

To achieve the full potential of data-driven growth strategies and solidify your financial institution’s position in the market, contact LEVEL5 today. Let us propel you towards a future of unprecedented success.