This blog is a companion to the EDGE Encores webinar series. The series brings the four most popular breakout sessions from EDGE24 to the virtual space, allowing those who missed the conference view some of the quality content they missed and allowing those who did attend to re-watch their favorites. This blog is by Benjamin Maxim, the Chief Innovation Officer at Michigan State University Federal Credit Union, and presenter of the session “Building Digital Relationships Through Partnership.”

Personalization is everywhere! Think about the Netflix prompt, “Did you like this?” where you give a thumbs up or thumbs down to help personalize your profile to your taste and watch more of what you enjoy. What if your financial institution could build each account and offer products and services based on a member’s individual behaviors and specific financial needs? A recent Salesforce survey revealed that 66% of members expect personalized offers at all times. In a world where consumers interact daily with hyper-personalized services from companies like Amazon, Google and Apple, they now expect the same level of personalization from their financial institutions.

Previously, this type of personalized service was delivered from your local teller. Employees spent time learning about their members’ preferences through conversation and offering products specific to that individual. Today, consumers visit branches less frequently, typically only coming in for problem resolution or complex service requests. Despite the significant evolution in the way consumers bank and their preferred service channel, there are ways to create this type of personalized, meaningful service through digital channels.

The Role of Fintechs in Digital Partnerships

Financial institutions have the data and insights necessary to build valuable, personalized digital relationships with their customers – but they cannot do it alone. A tightening bottom line driven by rising rates and the financial strain of increasing regulatory and cybersecurity burdens, makes it challenging for financial institutions to meet their members’ current needs while simultaneously investing in new technology and product offerings. Overcoming this challenge involves shifting an organization’s strategy from viewing fintechs as competitors to embracing them as valuable, trusted partners in delivering an excellent customer experience.

By partnering with fintechs, financial institutions can enhance digital engagement beyond simple transactions and offer tailored member experiences. Moving past a one-size-fits-all approach to products and services helps an organization recognize that offering a diverse array of fintech solutions – many providing niche services – is crucial to fostering engaged members who choose to interact with their financial institution out of preference, not necessity. Curating an ecosystem of fintechs accessible through your digital experience allows members to receive the hyper-personalized service they expect while continuing to engage with your credit union. If members do not find the individualized service they need from you, they will seek relationships elsewhere. A 2022 Plaid and Harris Poll found that eight in 10 Americans used digital banking apps and averaged using three fintech apps with payments, bill pay, tax filing, online banking, investing, budgeting and lending as the top use cases. Members opt for multiple banking relationships because their financial institution does not provide the diverse solutions that are needed to function in their day-to-day lives.  Offering a robust array of fintech services keeps your credit union at the center of their financial needs, strengthening the trust you have worked hard to build.

The Benefits of Creating a Fintech Ecosystem​

Creating a fintech ecosystem around your institution benefits your member, your organization and your partners. Your institution already holds millions of data points that can be leveraged to match members with the exact products and services they need to enhance their financial well-being. By partnering with fintechs that can effectively capture this information and share it back with you and your partners in meaningful ways, you ensure collaboration and alignment across your ecosystem.

In today’s competitive landscape, consumers care deeply about the customer experience and expect personalization at every touchpoint. To meet these expectations, financial institutions must build strong digital relationships and curate tailored experiences that go beyond traditional interactions. By embracing the agility and forward-thinking nature of fintechs, financial institutions can be a one stop shop resulting in satisfied, engaged customers and ultimately improve financial outcomes.

To learn more about digital partnerships and how they can benefit your credit union, join me on August 22 for my EDGE Encore session, Building Digital Relationships Through Partnership, where we’ll explore the concepts I’ve explained here further.

Ben Maxim joined MSU Federal Credit Union in 2007 and currently serves in a dual role as Chief Innovation Officer for MSUFCU and as Chief Operating Officer for MSUFCU’s wholly-owned CUSO Reseda Group. He is responsible for assessing emerging business trends and technologies, providing strategic direction for existing and future digital channels, and facilitating innovation throughout the Credit Union including leading their innovation center The Lab at MSUFCU.