Combat Disruption By Focusing On The Consumer

On-site coverage at BAI’s Payments Connect 2014.

The sessions on consumer insights during day one of BAI’s Payments Connect 2014notably lacked the consumer perspective. Day two, however, tried to right the balance with its theme of how to combat disruption by focusing on the consumer.

Despite the hype about a comprehensive revolution in payment systems, the disruptors who have done the best job of identifying, understanding, and meeting the needs, preferences, and predilections of their target customers haven’t been delivering radical change. They’ve opted to improve a tried-and-true value-add the customer experience. Such a strategy is not about technology; it is about how technology makes lives easier. The disruptors make customers feel safe and secure by making processes simple, familiar, and comfortable.

Before you can innovate, you must first understand. Henry Ford often said his customers wanted better horses, so he their need and focused on the experience to sell his solution. The Model T was not a fancy plaything of the wealthy, nor was it big, complex, unreliable, or hard to operate. It was simple and straightforward. Customers could easily use it to do things they were already doing. It was a better, faster, stronger, easier, cheaper horse.

A more contemporary example, Amazon, survived and prospered while so many of its startup competitors failed because it leveraged technology to meet consumer needs through a simple, safe, intuitive shopping and buying experience. It offered a straightforward payment process, rapid fulfillment and delivery, and minimal problems that it could quickly resolve.

How does this translate to credit unions? It suggests that although size might force you to let things shake out, the industry can look ahead to identify the direction things are moving and wrap that intelligence into your business models. Mobile shopping is coming and, for a number of reasons, it will be safer and more secure than online shopping and POS card-based transactions. So how can you use the tools available now to make members comfortable with those key concepts? Most of them already have smart phones, so think about offering services like remote deposit capture to help them adjust to the idea that this powerful little handheld computer they use to make calls and take pictures can also make their daily financial activities easier, faster, and more secure. Teach members to walk one step at a time, then sign them up for the marathon.

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