Create a win-win by reducing members’ anxiety

Leading consulting firms, such as Forrester and Bain & Co., have long maintained emotions are key in shaping customer experience (CX) perceptions. Bain reports reducing anxiety as the key emotional element of customer experience in banking. CUNA Mutual Group surveyed 1,005 consumers online to better understand how reducing anxiety shapes CX and loyalty perceptions.

Consumers anxious about finances
Findings indicate a sizable portion of U.S. consumers are experiencing some financial anxiety:

• 39% agreed with “I am more anxious when spending money today than I was five years ago;”
• 29% agreed with “I feel anxious about my current financial situation;” and
• 20% agreed with “My level of debt is ruining the quality of my life.”

Consumers rated their primary financial institutions (PFI) on three standardized CX questions measuring the degree to which they accomplished what they wanted to, how easy it was to interact with their PFI, and how the interactions made the consumer feel. For all questions, consumers not anxious about their current financial situation gave significantly higher ratings than anxious consumers. In other words, anxious customers/members “ding” their PFIs by giving lower CX ratings.

Most are worried/stressed before and during loan application
We asked consumers who applied for a loan in the past five years what emotions they felt when:

• Deciding to apply for a loan; and
• When completing the loan application.

After pooling responses for both phases of the borrower journey, we found most borrowers (61%) stated they were anxious, stressed, and afraid at some point before or during the loan application process.

Most commonly cited concerns were (in descending order of importance):

• “Worried about not knowing if I would be approved;”
• “Worried my credit score would not be high enough;”
• “Worried if borrowing money was the right choice for my situation;”
• “Concerned I had too much debt already;” and
• “Not certain if I could afford payments.”

Lenders’ actions to reduce worries drive borrower loyalty higher
We examined the relationship between lenders actions to reduce borrowers’ anxiety, stress, and fears and two important customer loyalty metrics: likelihood to consider the lender for the next purchase and likelihood to recommend the lender to a friend/family member. Loyalty ratings given by borrowers whose lenders took actions to reduce borrowers’ stress were more than 30 percentage points higher than loyalty ratings given by borrowers whose lenders did not.

The leading concerns mentioned hint at ways credit unions can reduce borrowers’ anxiety. Some examples include:

• Informing members of the pre-approved credit offers for which they qualify;
• Providing members with free credit scores and simulators to show the impact of financial decisions on their credit score;
• Counseling members on when not to borrow; and
• Providing members with access to debt-to-income and loan affordability calculators.

This research leaves little doubt credit unions taking such actions will be rewarded. While this study focused on anxiety related to lending, it’s easy to see how addressing members’ worries related to saving, spending, and managing money could improve members’ perceptions of their credit union.

Banks and fintech startups are investing large sums on technology to improve functional elements of CX, such as speed, ease, and convenience. Credit unions have a significant opportunity to differentiate themselves from competitors by effectively reducing members’ anxiety digitally. 

About CUNA Mutual Group
CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries, and affiliates. Corporate headquarters are located in Madison, Wisconsin.

About the author
Steve Heusuk is senior manager of customer intelligence for CUNA Mutual Group. Contact him at 608. 665.7854, or at steve.heusuk@cunamutual.com.