Credit Unions Need the Right Digital Banking Framework to Compete

Credit unions need a solid digital banking framework to compete with big banks. Join BeSmartee as we discuss how credit unions can challenge traditional institutions with a superior digital banking experience.

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Credit unions have always outperformed commercial banks when it comes to the customer experience. Having a personalized approach to customer service has also been a strength of credit unions — customer relationships are the foundation of any financial institution. Even so, fintechs and digital banking services are challenging traditional institutions to take a better look at lending technology.

Digital banking services have forever changed how business is done in mortgage lending. For the first time in a long time, banks are leading in customer satisfaction compared to credit unions, according to data from the American Customer Satisfaction Index.

So how can credit unions compete in 2021? It all starts from the ground up. Getting the foundation right is key to success in the digital banking industry.

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The Backbone of Digital Banking for Credit Unions

The traditional approach isn’t cutting it with today’s consumers. They want the whole package — a simple, instantaneous and seamless process. Consumers can switch financial institutions in a heartbeat, so it’s essential that credit unions lay the foundation for success in digital banking.

Let’s discuss how credit unions can stand out from the competition by perfecting the digital banking basics.

1. Omnichannel Lending Platform

Omnichannel lending puts the borrower first. Borrowers want to engage with their financial institutions on their own time and through the channel of their choice — without altering their experience.

According to the 2020 World Retail Banking Report, 57% of consumers prefer online banking post-COVID up from 49%, and 55% preferring banking mobile apps, compared to 47% previously. The report also found that “platform-based banks find it up to two times easier to increase operating profits, unlock new sources of value and improve operational efficiencies.”

These findings suggest that credit unions need to adopt platform-based models to stay competitive in the digital banking space. With the right software, credit unions can allow mortgage loan applicants to go through the mortgage process through a number of connected channels and platforms. Omnichannel lending creates a consistent borrower experience through physical, mobile, digital and online channels.

Here’s why omnichannel platforms matter in digital banking:

  • Saves time that’s better spent towards closing more loans
  • Increase the quality of touchpoints and give the customer a consistent experience
  • A tight connection between channels means better transparency
  • Give your customers a seamless journey
  • Higher engagement and conversion rates
  • Reduced application abandonment from increased customer satisfaction

An omnichannel lending platform is a piece of the digital banking framework that credit unions can’t afford to miss.

2. Consumer-Centric Online Banking

Roughly half of consumers interact with their financial institution through mobile apps or websites at least once a week, compared to 32% two years ago, according to data from Accenture.

Consumers, especially millennials, expect greater functionality from their online banking experience. Consumers want their online experience to be simple and user-friendly with a pleasant website design. They want a variety of financial tools and for their financial institution to provide services or products which help simplify daily life.

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3. Mobile Speed and Usability

High-quality mobile banking apps have surpassed physical branches as the most important touchpoint. Research has shown that the majority of consumers act digital and mobile-first when interacting with their bank. This mobile-first way of thinking needs to be applied to the modern credit union as well.

While design, function and authorization elements of mobile banking are top considerations, getting it right isn’t easy. There tends to be more friction in mobile adoption. Why exactly is mobile so difficult?

1. Mobile users are impatient

2. Mobile users don’t like handing over sensitive information or giving apps access to their smartphones

3. There’s limited data and storage available on mobile devices

If the onboarding process takes longer than two minutes, many people will abandon it altogether and consumers will even delete an app from their home screen because they thought the icon was too unattractive. Mobile is hard but when you get it right, it’s invaluable. People are downloading more apps and using their mobile devices more than they ever have before.

4. Quick and Easy Account Opening

Opening a new account should take a minimal amount of time or you run the risk of application abandonment. Peter Wannemacher, Senior Analyst at Forrester, said that abandonment rates for online banking applications are at an all-time high of 97.5%. Research has found that by reducing the amount of effort required of consumers, banks and credit unions can work towards building satisfaction and loyalty with their customers.

Credit unions can start to fix some of these problems by offering their customers:

  • Quick and simple ways to save and resume the application process. Consumers may need to stop the application and start it again at a later time. If they return and find that nothing was saved and they need to start over, it may leave them feeling dissatisfied.
  • Convenient but secure authentication. This can be difficult. Typically, the more secure the authentication process, the less convenient the process. However, multi-step authentication is becoming standard.
  • Consistency across channels. A consumer may start the process on their phone but may want to stop and resume on their laptop. To allow customers to continue where they left off, the process must be consistent across all devices.
  • Customers want to know the length of the process. Application processes should have a way to show progress to minimize abandonment rates.
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Even smaller credit unions can compete with bigger banks if they can deliver a consistent and strong digital banking experience along with their well-known personalized touch. A survey found that 88% of credit unions plan to invest more in such technologies than they had over the previous year.

BeSmartee provides smarter mortgage technology for credit unions, which allows borrowers to apply for a mortgage in minutes. The BeSmartee mortgage POS platform is helping credit unions win members for life.

Want to learn more about BeSmartee’s digital banking technology for credit unions? Don’t hesitate to call us at (888) 276-1579 or contact our experts at