Research & Insights

CREDIT UNIONS CAN DISRUPT LIKE UBER

August 14, 2017

Ride sharing services, such as an Uber or Lyft, have disrupted the long-standing taxi industry without even owning a single car.

They did it by simply assessing the needs of the market and creating value in an innovative way.  The ride-sharing business model starts with the producer of value, the drivers, who have the asset, the vehicle, and the consumers of value, the riders. Both producers and consumers have needs; the driver wants to make money and rider wants to save money. There are a few other items at play here.
1.    Network effects:
The ecosystem gains additional value as more people use it.
2.    Shared learning:
The ecosystem continues to improve as the two groups begin to share information; 1) the riders and the drivers 2) drivers to other drivers and 3) riders to other riders.

This applies similarly to the credit union.

In this version of the model, the “value producer” is the credit union. They produce value for the member in a few ways; 1) the products they offer, 2) the price of the products 3) creating innovative solutions to member problems, 4) serving as a conduit for other retailers that want access to the member.
The member, the “value consumer”, has five primary needs; 1) shelter, 2) transportation, 3) travel/play, 4) education and 5) retirement.

Taking the transportation need for example, a member needs to have reliable transportation to get to commute to a job and transport family. The member then thinks about filling this need with an auto. The auto is part of a bigger experience. This experience involves the features and benefits of the car itself, as well as the community of car owners who share their experiences on solving car problems, as well as the ownership aspects of the car experience. This includes the maintenance: oil changes, repairs, finding the cheapest gas, etc. And, of course, there is the financing of the car.

In the product to platform shift, the platform is the auto experience, and the features are the vehicle, ownership, and financing. For the credit union to leverage this shift, they can create an auto experience that incorporates the components. This not only increases the member engagement but also provides additional value to the member. In addition, allowing the credit union to gain valuable insights on its members.

These member insights gained from connected data will allow credit unions to shift from being a provider of commoditized products to that of a member engagement ecosystem host.  This shift from product to platform will allow credit unions to collaborate in ways they just can’t imagine now.

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