The credit union industry is being reshaped by numerous outside forces and challenges. How can we thrive? In order to answer that question, the 2011 Deluxe Collaborative focused their research on understanding what consumers think and feel about their financial institution, regulations, products and process. The researchers discovered that in order to survive- and thrive- organizations need to challenge five things. Learn those five things you should be thinking about and learn to thrive! More info at: www.nafcu.org/deluxe

1. A PRESENTATION FROM DELUXE
PRESENTED BY
Heather Vaughan
March 2012

2. The Deluxe Collaborative
What is a Collaborative? A small group of financial services executives.
Why a Conduct
Collaborative? Research
Shape
Members are smarter, Topic
stronger working
together.
Collaboration
Ideate
generates creativity,
problem solving and
motivation.
Working with industry
peers facilitates larger
change.
Share Design
&Test
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3. Collaborative Topics
 2004: The Rapid Attrition of New Customers in the First
90 Days
 2005: The Ailing Small Business Banking Experience
 2007: Artful Problem Resolution for Building Loyalty
 2009: Selling to Millennials and Boomers when Trust in
Institutions Is Low
How do Banks and Credit Unions Thrive in the
 2011:
Increasingly Regulated Climate of Banking?
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4. Deluxe Collaborative Process
• Secondary • Ethnography • Brainstorming • Focus Groups • KQ
research • Interviews • “And, also…” • Make it your own • KE site
• Excursions • Co-creation • Story boarding • Online research • Expo
• Analogies • Observation • Pitch and vote • Associations
1 2 3 4 5
Shape Conduct Ideate Design Share
Topic Research &Test
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5. Share
DeluxeKnowledgeExchange.com
Knowledge Quarterly
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6. Deluxe Knowledge Expo
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7. 2011 Collaborative Topic
How do banks and credit unions
thrive in the increasingly regulated
climate of banking?
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8. Thrive Model
Things to Challenge
1.How you target customers and members
2.How you define and design products
3.How you charge for products
4.The language you use
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9. How You Target Customers
and Members
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10. Two Consumer Mindsets
Barrier Jobs to
Elimination be Done
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11. Mindset – Barrier Elimination
• Hold my money.
• Don’t innovate on my behalf.
• I want service and access.
• Don’t mess with my spending.
“Give me my money, anywhere, anyhow,
anyway. And, oh, don’t charge me.”
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12. Mindset – Jobs to be Done
• I am open to a deeper relationship.
• Show me offers, discounts and smart
spending ideas.
• Give me controls I can choose from.
• I will pay for value.
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13. Motivation for Jobs to be Done
Time management
“Life is so busy. It’s hard to keep up with the day-to-day
requirements of managing my money well. I will accept valued
help from my CU.”
Increased performance
“I am willing to explore the possibility that by involving my CU, I
will see improved progress toward the job I want to accomplish.”
Shared responsibility
“If I involve my financial institution, I am
more inclined to stay on track. I would
value having a trusted partner in this journey.”
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14. Bridge to Profitability: Targeting
Old Thinking
Based on New Thinking
the size of
the Based on
account attitudes
toward
accomplishing
desired goals
• Understandnew consumer mindsets
• Segment on what “jobs” they want to get done
• Know which members to keep and which to let go
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15. How You Define and
Design Products
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16. The Promise We Made…
“We’ll hold your money for free.”
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17. The New Division
Barrier Elimination Jobs to be Done
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18. What Consumers Hear…
hold
“It’s yours and we are free
borrowing it.”
“There’s no charge.”
All of the industry efforts have been focused
on eliminating free - not on changing the
assumption that the CU holds their money.
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19. So, Now They Hear…
“We’ll hold your money for a fee.”
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20. “I will forgo ‘free’ for something of
Appeals to Neither Segment value.
‘Hold’ is not of value.”
“You can
continue to simply
‘Hold’ my money.
But that should
be ‘free’.”
Barrier Elimination Jobs to be Done
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21. Product Design
What Consumers Care About:
Critically important:
• Clear and honest explanation of the CU’s reasoning behind the
product
• Fairness to members
Extremely important:
• Products and services that are simple to use and
understand
Very important:
• Products and services that anticipate new or
emerging needs
• Timely products and services that allow the
CU to be at the forefront of innovations
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22. Two Products
We showed consumers two different products.
Traditional New
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23. Co-Creation: The New Product
For those who want to manage their day-to-day
finances more effectively, without spending
more time. One low monthly fee.
1. Choose your focus.
• Improve ST finances, manage spending, save, access, future
2. Set your controls to help you with your focus.
• # of accounts, transfers, alerts, payment tools
3. We will pay attention to the way you bank, conduct
“pattern analysis”, and give you suggestions to
improve your money management.
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24. Those Interested in New...
• Felt it was more relevant and wanted to learn more
• Indicated a willingness to adopt
• Felt that it was fair to charge for the new product
• Indicated they would leave before they paid for their
traditional product
Indicated they would be more loyal:
• satisfaction increased
• bring more business
• recommend their bank/CU to others
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25. Consumers Most Interested
• More educated
• Perceived themselves to be busy
• Age 27-40
• Likely to set-up multiple accounts
• Track financial goals
• Less likely to keep extra money in their account as a buffer
Expressed strongest agreement with:
“Innovations should help me accomplish my financial goals.”
“I need tools to manage my money.”
“I appreciate personal interaction.”
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26. Bridge to Profitability: Product
Old Thinking
An account
with New Thinking
features
A set of
that holds
controls that
your money
help the
member
accomplish
desired goals
• Change the role of product
• Re-engineer the way you develop product
• Align products to the jobs to get done
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27. How You Charge for Products
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28. Three Models for Charging
1. Flexible 2. Subscription 3. Free with Ads
• Basics with a set price • One low annual price • No minimum balance required
• Choose additional features you • Unlimited access to key features • Robust set of features
want • No fees for services, e.g., foreign • Relevant ads in online banking
• Add optional services for ATMs
additional fees • No minimum balance required
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29. Pricing Scenario Findings
• All participants preferred “Free with Ads.”
• Those who favored the New Product were more
open to all three pricing models.
• Younger participants rated all three pricing models
higher.
• Older participants rated Flexible and Subscription
pricing higher and almost identically, and Free with
Ads as less appealing.
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30. Bridge to Profitability: Charging
Old Thinking
Fees New Thinking
based on
holding Price based
money on the value
you create for
the member
• Move away from a punitive-based fee model
• Create new value for members
• Teach employees to sell the value you create and think in
terms of new sources of revenue
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31. The Language You Use
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32. Language
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33. Language
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34. Consumer Reactions
• Don’t understand the difference between regulation
and policy
• Believe all the “rules” are designed to punish them and
restrict access to their money
• Don’t think the changes are fair
• Question why and when they receive notices
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35. Language
We say…. They hear…
Free debit card with liability protection. Liability? What is going to happen?
Personalized voice and email alerts. Personalized? What other kind is there?
No fee for four ATM transactions per/mo. Why only four transactions?
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36. Language
Moving away from… Moving to…
An account that holds my money A solution that helps me get jobs done
Mobile banking or online banking Access
Features and benefits Solutions
Free Unlimited
Categories or services Tools
Demographics/psychographics Job-based segmentation
Charge punitive fees Charge for the solution
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37. F.I.T.S. Framework
Fair – Is it fair?
Intentional – Is the intent clear?
Timely – Does the communication occur at the
right time?
Simple – Is it easy to understand?
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38. Bridge to Profitability: Language
Old Thinking
Key word: New Thinking
Free
Key word:
Products
Unlimited
described
Products
as a list of
described as
features
a path
forward
• Communicate the value you provide – effectively
• Develop simple techniques for employees to use
• Incorporate the FITS model to communicate change
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