How Branchless Alliant Credit Union Hones Its Digital CX
By Steve Cocheo, Senior Executive Editor at The Financial Brand
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Executive Summary
- Alliant Credit Union went all-digital in 2020 and has learned some hard lessons about making branchless banking work.
- Consumers want their digital banking experience to match what they get in ecommerce, not just at other financial providers.
- But maintaining emotional connection remains a challenge, and customers fret about security and privacy.
Even as membership boomed, use of Alliant Credit Union’s branches had been falling since 2014, and when Covid hit, plans to close its last two offices by the end of 2020 were accelerated. In the last five years, the organization, $20 billion in assets, has learned a lot of lessons about delivering strong customer experience without brick and mortar.
The key is to look at the broader digital world we all live in, says Alliant’s David Benavides — because organizations from Amazon to the U.S. Postal Service to your local deli can set standards for digital CX and define consumers’ expectations of what a bank or credit union ought to be doing.
Benavides, head of digital, design and member experience, says Amazon sets the standard for keeping customers in the loop and that’s set the bar.
“When consumers complete something, they want confirmation that it’s been done,” says Benavides. “If it’s not done right away, they want to know the status. They want confirmation that it’s been shipped, and they want confirmation that it’s been delivered.”
Being a digital-only credit union, he continues, means that “we’ve had to up our game. We’ve had to start to think like the tech companies of the world, like the retail giants. We’ve had to shift our strategies to be nimbler.”
He gives some examples of updates that Alliant members receive these days:
- “We’ve received your application.”
- “Hey, your account is ready.”
- “We’ve shipped your card.”
- “Your card is ready — let’s activate it!”
“It comes down to basics, but a couple of years ago none of this was happening,” Benavides says. “When members submitted a loan application, it went into a black hole somewhere. That drove phone calls.” People were understandably not willing to wait for information.
Today, to keep up with what members want to hear about, Benavides says his staff works closely with call center employees.
“We ask them what they are seeing in the way of calls, and can we help to mitigate the number of these calls by being a little bit more proactive in our digital channels?” says Benavides.
Another mystery for consumers — solved at Alliant but still a challenge for some institutions — is transaction history for accounts. Data comes in from Visa, Mastercard and other sources in bankspeak and code.
“It’s up to us to be able to interpret that, and present it in a way that members understand, so they don’t have to ask Google, ‘What the heck is this thing?’,” says Benavides.
Benavides joined Alliant in late 2024, after a stint in digital with KeyBank and more than two decades at USAA, finishing up as director, bank digital roadmap and capabilities, at the nearly branchless pioneer.
“Because we don’t have a branch network, we’ve got a very favorable cost base, because of which we can give much more back to our members,” says Benavides. “The flip side of that is we must use that advantage to reinvest in digital, because that’s the only channel that we have.” (Alliant does give fee-free access to more than 80,000 ATMs nationwide, and also participates in a shared-branch network.)
One such investment that’s underway is a re-platforming of all of Alliant’s digital offerings. He’s hoping it will enable the digital-only credit union to pull ahead of its competition. The credit union has seen member deposits grow by about 25% from 2021 to 2024.
Digital CX Demands Simple, Straightforward Processes
“I’ve been in and around digital and building digital products for over 15 years now, and there’s something I’ve seen over and over again,” says Benavides. “You can make the best digital product in the world, but if it’s too difficult to set up or too difficult to enroll in — too many hoops to jump through — you won’t get adoption and you won’t see the value you wanted to deliver.”
That point is reflected in Alliant’s product development approach. Several groups contribute to formal feedback on ideas in development, including an internal employee panel, board members, and a select group of members Alliant reaches out to when doing any type of testing. The latter element draws on members who use the particular set of products being revised, rather than simply sampling the entire member base.
Member requests also drive some new product development. A case in point is early wage access, which Alliant formally introduced in March as “Early Payday.” It is available to all members who have direct deposit of paychecks and Social Security payments.
Members were asking for Early Payday for more than a year, but Benavides says that Alliant found that development was more of a “slow roll.”
“The concept sounds very simple, but on the backend there’s a lot of nuance,” says Benavides. “It’s not always as easy as it looks on the screen.” Essentially, not all direct deposits come through the same way, and it was critical that making the early access available wouldn’t pose a risk to Alliant.
Once the credit union navigated the twists, the decision was made to eliminate hurdles to signing up by giving all qualifying members early access. “It’s defaulted to ‘on’,” says Benavides, making the process easy.
Read more:
When ‘Easy’ Isn’t the Best Answer
While making it easy to enroll in products digitally is often important, Benavides says there are times that a little bit of friction helps give members some peace of mind — and Alliant a bit of protection.
“It’s important to put the right guardrails in,” he says. “You have to put in the right security measures while making it frictionless while creating confidence.”
A lesson learned, and the solution it produced, came from online account opening, specifically at the point where a new Alliant account was ready to be funded from another institution.
Traditionally the member had to have their account number, routing number, and more readily available.
Some test groups were offered the ability to skip much of that process, including eliminating the upfront funding requirement.
The result? “We saw a huge increase in new accounts opened. But the flip side of that was that they weren’t being utilized,” says Benavides. “And we also had a little uptick in fraudulent products as well.”
Alliant needed a way to maintain a “healthy friction, but still provide a great user experience,” says Benavides.
The upfront funding requirement was reinstated during testing. But Alliant took steps to make it easier to connect bank accounts within its digital services.
“Now, instead of having to go get your wallet and find your checkbook, you can actually log into your other bank through our application,” says Benavides. Funding can be accomplished easily, with just a bit of friction.
Read more: Closing the Digital Divide: Credit Unions Should Prioritize Tech Over Transactions
Creating an Emotional Connection Poses Challenges
Loyalty that used to be based on interaction with live staff is harder to re-establish. Benavides says part of meeting the challenge is to make everything the consumer reads very reader friendly.
“We make it as conversational as possible,” he says, “so they don’t feel they are interacting with a computer.”
A natural question is, in the age of FaceTime and other video services, why not go to a virtual face to face channel?
Benavides says that’s not the slam dunk it might seem.
Earlier in his career, his institution made that type of service available and consumers didn’t use it very much, even though smart phones have become ubiquitous.
“Everybody’s on mobile these days, but it’s very difficult to do a video chat when you’re in a setting where there are other people around,” says Benavides. “People are very sensitive when it comes to financial services.”
No one wants to share their financial affairs with office mates, he adds, nor with the other imbibers at Starbucks.
