The Domino Effect of 'FOMO No More'

8 minutes with Stephen Arnold, Vice President, Customer Delivery & Business Management

What follows is part of our series "8 Minutes with AdvantEdge Analytics," a collection of eight-minute (or less) reads featuring brief interviews with our top thinkers on trending topics in the credit union space.

Why did you choose this topic?

A neighbor, riding what appeared to be a decades-old bike without a helmet, got me to thinking about all the deliberate ways people are re-engaging in activities they enjoy.

As I watched him pedal by, I imagined his lack of protective gear was explained by the fact helmets were not a ubiquitous practice the last time he rode on two wheels. It’s been that way for a lot of us – getting back to the things we once loved doing.

The passions and pursuits of work life tend to overshadow the hobbies and enjoyments of personal time. With the extra downtime created by lockdowns and social distancing, however, we’ve had the freedom to jump back into some of the things we’ve left behind – or to explore entirely new interests.

All this had me wondering how the refocusing of our time and energy (and money) will change consumer expectations of the brands we do business with. With their human-centric, people-first foundation, how will credit unions adapt to the reprioritization of values their members may soon display as a result of “The Great Pause?”

Stephen Arnold

Stephen Arnold, Vice President of Customer Delivery & Business Management, AdvantEdge Analytics

How does this topic hit close to home for you?

My work in financial services and insurance analytics naturally focuses my curiosity on consumer spending and behavioral economics.

When I think through the average individual’s circle of influence and how it’s changed over the past few months, I consider the typical social media feed. Instead of seeing all the extravagant cars and trips their friends are enjoying, they’re seeing the cakes they baked or the window art they created. How much of a domino effect may come from this cultural shift in social content? Without the same pressure to keep up with the Joneses, will people spend as much or in the same ways?

Are we entering a period of "FOMO No More," or the eradication of a fear of missing out? And if so, how are credit unions monitoring the ways this affects their revenue streams, product portfolios and member experience? Data analytics will be a critical competency for credit unions as they work to sustain relevancy with the generations of people whose lives have been fundamentally altered by the global response to COVID-19.

Tell me more. What keeps you up at night?

I'm confident the credit union industry will evolve through the pandemic, coming out stronger on the other side. We've seen the strength of the movement before as leaders weathered natural disasters, the Internet bubble, the Great Recession and any number of hyperlocal economic downturns.

But, it won't be easy.

The price of money is low, interest rates are low, interchange is at risk; it's hard for lenders to make money in an environment like this. Thriving for the long-term will require a strategy that balances survival and member care now with a plan to transform for the future. It will also require empathy, compassion and acknowledgment that some members are really struggling and need the credit union's over-and-above energy to come out of COVID-19 financially secure and hopeful for the future. That calls for an intensely personalized approach, and here again, analytics can be a strong ally for identifying the most vulnerable within a membership.

What's happening right now that makes this topic important?

The reopening of local economies and, very soon, schools has many people on edge. The uncertainty of the past several weeks has only ramped up amid discussions of a potential second wave, not to mention the juggernaut of social unrest over racial inequality and the U.S. presidential election. Credit unions have the opportunity to serve members as a consistent, trusted and stalwart source of financial guidance – a lighthouse in the storm – if they have the wherewithal to see ahead for members.

An exciting increase in digital engagement will help credit unions do exactly that. Members comfortable with online and mobile banking, remote deposit capture, digital wallets and P2P leave an informative data trail that gives credit unions unequalled foresight into their financial futures. Capturing this intelligence and using it to study new behaviors while predicting future ones is how credit unions will live out the people helping people purpose in a post-pandemic world.

How is this going to look a year down the road? What about 5 years?

A year from now I hope we're back to enjoying time together without the fear of another virus outbreak. Wouldn't it be great if we were also celebrating a COVID-19 baby boom? The optimist in me believes some of the return to relaxation, family time and the pursuit of personal interests will still be hanging on, perhaps becoming even more influential in the everyday and major life choices we make.

In five years, we'll have a nice retrospective on what we learned during the pandemic and throughout our recovery. I think we'll see how resilient we are as people, as parents, as leaders. We may even look back fondly on a time we were forced to slow down, be still and think about what's important.

For credit unions, the future will open up entirely new possibilities related to the integration of technology and data-driven strategies. Having experienced the need for agility during unexpected crises, the industry will have a new appreciation for data and technology, specifically in how they enable credit unions to mobilize quickly to help as many members as possible weather the next inevitable storm.