How Do We Put ‘Community’ Back Into Community Banking?
By Tim Pranger, CEO at Appli
Simple Subscribe
Subscribe Now!
Executive Summary
- Credit unions are prioritizing completed applications over leads, missing opportunities to build lasting relationships
- Technology meant to streamline processes is often creating barriers between members and the credit union’s biggest asset: its people
- Shifting focus from application perfection to faster human follow-up can restore the community-first advantage in community banking
Here’s a question that might make you uncomfortable: Do community financial institutions really want applications, or do they actually want leads?
I know, I know. You’ve spent years and countless dollars building digital application experiences. Your vendors have convinced you that the goal is getting people to complete applications online, just like the big banks. But what if that’s exactly the wrong approach for a credit union?
The Problem with Playing the Big Bank Game
Let’s be honest about something: even the best credit union application experiences fall short of expectations. People start them and don’t finish. The completion rates are disappointing. Meanwhile, you’re banking on your service team – your actual competitive advantage – to get things across the finish line through personal relationships.
So here’s the real question: If someone can’t complete the application or starts it and bails, that’s a complete loss, right? But if you get a lead – someone you can actually follow up with and build a relationship with – that’s not a loss at all.
And here’s the kicker: if that person closes the loan because of the personal relationship you built at the beginning, doesn’t that trigger a long-term relationship that’s actually valuable to your institution? If I work with Jake at the credit union and Jake helps me get my auto loan, I have his direct line that I can call or text. Am I going to call him about a deposit? Maybe. Am I going to call him when I have questions about my kids’ education savings Probably.
But if I just fill out an application and either stop halfway through or finish it without any human interaction, that’s where the relationship ends.
Has Technology Actually Hurt Community Banking?
Here’s the uncomfortable truth: has technology actually hurt the community purpose of credit unions? Has it made you try to play with the big boys rather than playing your own game in a digital way?
Your technology vendors will say, “Oh, technology is helping! It gives you a better chance to connect with people!” But in practice, that’s often not the case. In many cases, technology is doing the opposite – it’s creating barriers between you and your members.
This might sound bold, but I think it needs to be said: the current approach is a complete reverse of what community banking means. All these vendors that think they’re giving credit unions the opportunity to become a fintech – is that really what you want to do? Is that what you should do?
The Real-World Reality
I was looking at a credit union’s website recently (let’s call them a typical example). If you want a home loan from them, first you click “home loan.” Then they show you home loan information. The calculator is buried somewhere else and they give you a warning that you’re leaving their site – already creating friction for the user.
If you click “apply for a loan,” you’d think you’re going to the application, right? Wrong. You get another warning. Hit continue. Now you’re still not at the application – now you hit another button that says “apply online.” And then you have to register and create an account, which doesn’t even look like an application.
Dig Deeper:
The Frictionless Fiction: Why Banking CX Requires Intelligent Pauses
Four Ways Banks Can Turn Fraud Into a Loyalty Play
Reputation Under 4.2 Stars? Your Bank’s Marketing Budget Is Burning in Real Time
You’ve literally got: their site → click apply online → new page → click apply online again → create an account that doesn’t feel like an application.
This experience is so disjointed that I guarantee most people never make it through. The question for this credit union – and every credit union – is: “Do you really want me to apply?” Because honestly, I don’t think they do.
What Really Matters: The Three-Step Reality Check
If you’re a community financial institution, you need to ask yourself three critical questions:
1) What’s the actual goal of my website? Am I trying to get applications or am I trying to get leads?
2) What’s going to give me the most value long-term? A completed application with no relationship, or a lead that turns into a personal connection?
3) Am I setting up my website to get what’s actually most valuable to me? Is my website giving a direct path to the person who’s going to solve their problem, or is it giving a scattered path to an application they might not finish?
Get Your People Involved Faster
Here’s what most credit unions are missing: you need to get your most valuable resource – your people – involved as quickly as possible in the process.
Think about it this way: Should you spend time making your application experience marginally better, or should you focus on how quickly your loan rep calls that person who submitted a lead? Should you perfect your online forms, or should you perfect the process where someone says, “Hey, we got your information. We’re excited to work with you. Can we jump on a call for five minutes and I’ll take care of this application for you?”
That’s where the real magic happens. That’s community banking.
Don’t Keep People Out – Keep Them In
Look at Rocket Mortgage. They’re built to process volume efficiently. They’re essentially built to keep people out unless they’re perfect digital applicants. But credit unions need to do the opposite – you need to build experiences that keep people in and get them connected to your team.
Here’s the thing: technology players built tech-first experiences and you built people-first experiences. Why are you playing their game differently now when technology can actually bring your biggest skillset to the forefront?
It doesn’t have to be either applications or leads. You can do both. But if you’re going to deploy one or both approaches, you better make sure it’s a good experience that actually serves your goals.
The Bottom Line
The community banking industry has been going the wrong way. You’ve been trying to compete with fintechs and big banks at their own game instead of playing to your actual strengths.
Your strength isn’t processing applications faster than Rocket Mortgage. Your strength is the relationship. Your strength is Jake knowing your family situation and being there when you need financial guidance.
So stop building barriers between your people and your members. Start building bridges. Get leads, follow up personally and create the relationships that will keep members for life.
That’s how you put “community” back into community banking.
